Bitcoin Solved Digital Scarcity. But It Has a Privacy Problem w/ Max Hillebrand

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Bitcoin is an engineered system.
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Like, we came up with it, we can change it, we have to maintain it.
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So these are serious questions and there is a whole bunch of nuance to it.
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For one, it's good for Bitcoin to have a purpose.
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Like, what is the thing that it's supposed to do?
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What do we engineer it to be?
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And I would say that the purpose is money, right?
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Like, broadly speaking, a thing that you can receive and hold and spend.
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And a thing that doesn't decay, that you can't easily destroy.
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like that that would be a useful thing and that includes having a affordable way of using the
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system in a privacy preserving way and and so that's that that is what i would say is the goal
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that we should engineer bitcoin to be and there are obvious things that if we would change in
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the current design that it would get a whole lot worse
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welcome max hillbrand to the podcast welcome to bitcoin hello hello i'm very happy to be here
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thanks for the invite i'm really looking forward to it and yeah always good to have proper
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conversations about even more than just bitcoin that's what i appreciate appreciate about the
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barcelona cypher conference is that it's not just a bitcoin conference but a general freedom tech
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cypherpunk conference and i think that's that's good because bitcoin is exciting but there's a
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whole bunch of other technologies out there that we can use that are almost as interesting but
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Bitcoin is still probably the most interesting out of them all. Yeah actually you know what something
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that I like to do in the podcast if I guess come for the first time is that if you can explain a
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little bit a little bit about your background and your job. I know in the Bitcoin community you're
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very famous you're very cypherpunk but you know El Salvador has has been Bitcoin we have had as
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legal tender for a shorter time but it's kind of new for almost three years now and we always
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embody new bitcoiners so yeah if you can share a little bit about you and then we can jump right
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into different topics yeah i basically started out as an economist that was my first kind of passion
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because i wanted to understand better why we work and and what work actually is and how to
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do it well. And then that kind of was a period of both entrepreneurship and economics,
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because the right type of economics is super applicable to anyone, but especially businessmen.
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And so I found the Austrian School of Economics quite early, and that really shaped my worldview
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and mindset and my appreciation for producing things and building something and having entrepreneurs
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and businesses solve problems for people and provide products and services. That's a super
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valuable and good thing to do. And I also was quite fascinated about monetary economics before
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Bitcoin. And so I was a big fan of gold and silver and not as much a fan of fiat money.
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But the sad state that this put me in that I could diagnose the problem, like the money is broken,
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and then not have a solution because gold and silver just don't work for the digital
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world that we live in. And that's when I finally found Bitcoin. And that really made me appreciate
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the ideas of the cypherpunks, that we can build systems in cyberspace that are incredibly useful
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to us, that can help us on a social level, on a relationship level, on an economic level, and
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really have amazing use cases where we can make sure that people don't get stolen from and that
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we can use without asking for permission these types of technologies. And out of this, we can
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build resilient systems that govern certain aspects of our lives in a fair manner. And money
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is one of those applications that the cypherpunks have built. And that's what Bitcoin is, right? It's
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a system of money in cyberspace and in the digital world that you can run on a computer. And with that,
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you can manifest an incredible amount of freedom in your life. Because if you save your money
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in a good money, then you will reduce the amount of theft that you have, that you're suffering under
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to a minimum. And I guess that's maybe to tie this a little bit into El Salvador, because what I
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really came to understand throughout my economics studies is that the way for wealthy nations and
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wealthy people and wealthy societies is actually quite simple. There's basically one rule that you
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have to follow, and you'll all be quite wealthy on all these different aspects. And that one rule is
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do not steal and if if you steal and that has many different facets on how you could steal from
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others then that's a bad thing and and it makes everyone worse and it it turns the the country
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into well and i think that's to some extent what was the case in in el salvador right like theft
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criminality murder violence was was very prevalent and then if if you put a drastic end to that
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then you will have drastic consequences and as an outside observer unfortunately i've never been
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to Salvador but it seems to me that the country is on numerous levels more wealthy and the people there as well simply because theft was made unprofitable and that includes gang violence but that also includes the monetary violence like
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inflation is theft and that's a bad thing and with bitcoin you you simply turn that off and
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and sure not everyone in the country has fully adopted bitcoin to the extent that it could have
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been but still those that did they have very successfully protected themselves and and their
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loved ones and their money with from from people who steal and and that's that's really really
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powerful and i'd love to see more places go radical on this experiment of simply making
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theft unprofitable yeah you know that after the imf deal that probably you just saw in the news and
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x that we pivot and then in the end we were not legal tender anymore but yeah we continue using
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Bitcoin. There's a lot of debate about if it is a success or not. And I think, and I'm giving just
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my opinion, guys, it has been a success because we have used Bitcoins from the grassroots, but also
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from top to bottom. So it means that the government put their own efforts, but also the independent
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institutions or educational project in El Salvador has been supporting a lot. The knowledge about
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Bitcoin right in the end. I think what us as a plebs with individual projects, but also what
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Bukele wants to do is to provide or give back the power to the people. And in this sense,
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the only way that we can do it in this type of economy, in the Austrian economics is with Bitcoin
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right because there's nobody to control it. There's nobody. There's no CEOs. It's completely
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decentralized so i think that that is the only way that we can fight against the the korean system
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that we have the broken system but what do you think about this yeah exactly and that that approach
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of both bottom up and top down is is important if you have both together you can achieve quite
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a lot of good things which i think was there in the early days of the called salvador experience
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or experiment. But the problem with top-down, like with politics, is that ultimately politics
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is always based on coercion and violence, ultimately. And there are people who simply
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don't want to use Bitcoin. And that's okay. And forcing people to do anything usually comes along
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with those people not liking that they're forced to do something or not do something. And so that's
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ultimately why a lot of politics fails is because people have righteous grievances that they simply
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don't want to do something that the regulation prescribes. And so that's why I'm ultimately a
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fan of the bottom-up solution where, hey, this tech is available. Here are the features of it.
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Here's how you can use it. This might be the consequences for you after you use this. Go ahead.
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It's yours. It's free to use if you want to do it. And this way you get people on board who,
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for one want to do it on and are excited and enthusiastic about it like nobody's forcing you
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to make the podcast right you're doing it because you're you're doing it and and and that's the type
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of creative spirit that that will in the long run be much more productive but ultimately again if
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your government doesn't like try to kidnap you if you use bitcoin then that's already a win so
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what salado did on a political legal level was absolutely favorable and they could have done a
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whole bunch worse and they could also have done a bit better and and you know do things differently
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but ultimately these are extremely complex systems of human interaction and interrelationship and so
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that's always messy and and uncertain and we just don't know exactly what's the best so it's it's
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expected that there's ups and downs and and that some things works and others don't but what's
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important is to keep improving and and seeing what else can be done to the people of the country yeah
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absolutely you know that when i started to get interested about bitcoin actually was because i
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watched a documentary like almost i don't know how many years ago probably saying then that it
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was about the surveillance capitalism and also how facebook influence and also depression and
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they made like a documentary how through the social media influence on people to vote to
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certain parties, right?
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Right-wing or left-wing.
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And I was like, damn.
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So through Survelling Capitalism,
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it's so...
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How can I say that?
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You cannot notice how
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they can influence you
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with the information that you provide
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voluntarily on the internet.
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So I think with that,
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with all these problems that I have been seeing,
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it's when I started getting interested
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about Bitcoin. And I want
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to go deeper on that, but
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And since I'm talking about this, I also want to ask you, because I have seen in other podcasts and even in the conference, that you have talked about the privacy and that is ended in the very definition of human action, right?
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So you can walk us through how Austrian praxology leads inevitably to privacy not just like you know like as luxury but actually as a necessity a human necessity Yeah this is really fascinating And in part because many Austrian economists have never really considered much about privacy
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I mean, they have, but not too much.
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And so the realization is that it's really a definitional thing.
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And definitions are important.
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We have to understand the meaning of our words.
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And so the meaning of privacy that I found most useful is the ability to selectively reveal yourself to the world.
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It comes from Eric Hughes, an amazing early cypherpunk writer.
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And the idea here is that you can, that whenever you always have a choice on what you say to whom.
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And so this is an ability that you have.
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And you can for yourself decide if you talk to a person at all and what types of words you say.
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And that is fundamentally an action. And this is where we get back to the Austrian economics, which put a lot of emphasis on action. That's what praxeology means. It is the logic of human action. So what are the consequences that we can say based on the fact that humans act?
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And so this is a line from Ludwig van Mises, one of the early Austrian pioneers who really honed down the methodology for how to look at economic problems.
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And he emphasized the role of individual action.
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So that is not random behavior or reflexes, but actual choices where humans have multiple problems to tackle and multiple different ways that we could attempt to solve any one of these problems.
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And with this aspect, you see the privacy and action are very interlinked.
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They're both about choice.
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And the human action axiom is what I'd like to call a like you cannot deny it.
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If you would try to deny that humans act, that humans act purposefully to solve problems, then you would perform a contradiction.
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Like if you try to say that, no, I'm not acting right now, then that's obviously not correct because you're speaking and speaking is an act.
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And the purpose of the act is to convey meaning and to, in an argument, convince the other side from your reasoning and your points.
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So it's action is very foundational to the human existence and it cannot really be denied.
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It is a self-evident claim. And that's why it is such an interesting starting point for a methodology and for an economic analysis, because it's the one thing that we can for sure know is true. It's kind of like the I think, therefore, I am a philosophical statement of like you can't you just can't deny that. And therefore, it's a good place to to build your logic on top.
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And what the economic side of the logic answers ultimately is what is the consequences of our actions?
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And like, what is the consequence if we steal from others or if we trade and if we build things, if we build things that are more complicated or things that are more directly consumable?
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These are all different types of economic aspects that can be studied.
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And then alongside the cypherpunks have really worked hard on the technical deployment of privacy in the sense of given that some people want to reveal themselves selectively so that they say a certain secret only to one person and not to the entire world.
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then how can we build technological reality that makes this possible and unstoppable and available
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for anyone who would want it? And this is where technologies like encryption comes in, where you
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can hide the content of a message or signatures, where you can authenticate that you were the actual
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sender of a message or hashes, meaning that files cannot be changed or you notice if a file was
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changed and tampered with zero knowledge proofs, where you can prove certain facts about a statement
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without actually telling the details of these facts.
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And anonymous communications like Tor for hiding your IP address
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when you visit a website or mixed networks or VPNs
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and ways for sharing files like BitTorrent or Noster.
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And these are all different types of technologies that we can utilize
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to shape that natural human reality of having the ability
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to talk differently to different people.
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How can we make that a reality in the digital world as well?
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And so both of these traditions together, I think, are extremely insightful.
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What the Austrians teach us is that if we respect the privacy of others, we will be rich, ultimately.
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We will produce a lot of stuff and people will be, generally speaking, happy.
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And if we violate privacy, then we will misallocate our resources.
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We will solve problems that don't actually exist and spend way too much money on that.
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And ultimately just get poorer over time, more depressed in an economical sense.
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So these are the economic consequences of privacy.
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And then the technological reality that the cypherpunks give us is that, hey, we all know
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that privacy is important and that it is better than a non-private world.
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So here are the technologies that make privacy an irrefutable reality, technologies that
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cannot be stopped, that are available for anyone, and that will be here to protect you
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and your privacy and your sensitive knowledge and the details of your trades And these are all things that you do not have to share with the entire world or with an adversary anymore You can act privately and you can build things privately and trade things and save things and build an economy in a way that simply not everyone knows
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what you're doing. And also, I want to ask you about like, talking about surveillance,
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like in practice, how does surveillance store prices and also capital allocation,
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like now in the same way like inflation does yeah so with with inflation this economic reasoning goes
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back to like 300 years ago or something where richard kantion put his finger on the what's
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now known as the kantion effect which basically means that if a group of people prints money
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then for one the obvious reason is is that they have a larger percentage of the total supply of
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money now so this is an obvious wealth transfer from from everyone to them but then this this
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trickles down through the economy. So the first people who receive the newly created money,
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they have a whole bunch of benefit, in part because they can adjust their prices sooner.
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They know that there is newly created money, and therefore they will experience that there's higher
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demand on their products. And so they will increase their prices and then pay their suppliers,
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who will again feel higher demand and therefore increase their prices. So the price increases
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throughout the economy are mainly towards those that are newly that received the newly created
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money early. And that is another part of how wealth gets redistributed with a with with inflation.
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And the end result of this is that those who get the newly created money, they now solve problems
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that tend to be less and less valuable to them, like diminishing marginal returns. If you're
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really wealthy, then you will spend stuff on luxury items that you otherwise wouldn't have
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spent if you're if you have less money and so more and more luxury items more and more things
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that the upper class wants basically gets produced and there's less like artificial demand for for
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more basic functions because all of the people who would want to have these basic functions are poorer
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and they can no longer afford them so basic housing real estate and then so on gets gets
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built less in in favor for more luxury luxury residencies as one example and so this reallocates
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resources away from the regular from the regular entrepreneurs who just build normal houses towards
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those entrepreneurs that build really fancy villas. And here you see that we build things that we might
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actually not really need. But the problem is that we over consume. We destroy a lot of resources
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because we think that we're rich since we printed a whole bunch of money. And then simultaneously,
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we malinvest. We build villas instead of, you know, regular housing. And so this means that
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there are more and more resources needed to build things that we don't actually need.
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That's the malinvestment part.
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And so we destroy resources on both sides.
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We consume too much and we don't build the right things.
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And eventually, initially, that feels great.
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Everyone has a job.
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Everyone has luxury stuff, relatively speaking.
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That's the boom period.
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And then the bust comes when we realize that, hey, things are actually not, we don't have
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enough resources to finish the basic houses or any of the villas.
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Like we've started too many projects and we don't have the resources to finish any of them.
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That is an economic bust.
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That's a downturn, a recession.
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And similar aspects are there for privacy.
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If you imagine you have a surveillance apparatus where all of your actions and maybe even your thoughts are monitored and sent to some authority.
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And this authority might punish you for having certain items or selling certain things or even maybe reading certain books or having certain thoughts.
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And now, considering that you might face extreme consequences if you do certain types of actions or if you think certain type of thoughts, then you stop doing the things that you would actually like, the things that are actually your highest priority.
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Maybe out of some curiosity, you want to read a religious book, and that is the thing that you would want to do on your journey. But ultimately, then, because of the surveillance, you do not do it because you know that the state would put you to jail if you found out.
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So a value, a action is not taken to the highest possible value that the individual would perceive.
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And instead, to some other thing, like maybe you buy, I don't know, the communist manifesto instead, because you know that if the party finds that out, then you might get a job next month or whatever other benefit a surveillance actor could give you in order to incentivize certain types of actions that you should rather take.
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And so this, again, steers human action away from maximizing value for individuals toward maximizing the value of the bureaucrats or the surveillance entity and directing that to where they want and benefiting all those people that are in good relations to the surveillance entity and harming and taking away resources from those that are in opposition to that surveillance entity.
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So here again, prices start to get messed with and because prices emerge when two people
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make a voluntary exchange.
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That's when a price emerges.
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And if people do not exchange because they fear the consequences of that, then price
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fall or rise higher or lower than they actually would have, considering that certain actions are
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frowned upon or benefited by a surveillance entity. So with a more privacy-preserving world
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where people can act privately without having to fear that someone will observe and punish their
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actions, they will act on the things that are more natural and more valuable to them. And that leads
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to more honest prices and ultimately less theft and therefore more prosperity. Yeah, because normally
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people always say like when they don't think much about how privacy is important because
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they say like I have nothing to hide so I don't care about privacy.
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Cuando dejas tus activos digitales en un exchange o en custodia de alguien más, te expones
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a riesgos de terceros no deseados. A diferencia del sistema bancario tradicional, Bitcoin te
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permite tomar el control total de tus fondos utilizando tus propias claves privadas.
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This allows you to be sovereign and essentially your own bank.
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You can control your Bitcoin, you can avoid the risks necessary to the third-party.
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You can also use your Bitcoin in custody of third-party exchanges,
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you can attack actors, governments or frauds that only want to be able to get your money.
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You can also use hardware to the hardware.
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Your private keys are stored in a specialized device that is not always connected to the internet.
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As I said before, maintaining your keys in a linear device can be exposed to additional factors of attack,
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so it is recommended to use a hardware wallet to store large amounts of bitcoin during long periods of time.
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Jade is a hardware no custodial for bitcoin and liquid that offers simple firma and multiple firm.
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I personally use it to store my bitcoin
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because I feel much more secure
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keeping my bitcoin in a free billet than in a free phone
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and fast.
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Bold Bitcoin.
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Own your money,
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destroy fiat.
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Because they think that
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Probably it's related because you're doing something wrong or something that is not in the terms of law, right?
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That is not correct.
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But it's not about that.
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You're protecting your information because why would you give the secrets to everyone?
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I mean, this is the most important thing.
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You have the right to have your own privacy.
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So why would you give it for free to the world?
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So I think that's one of the strongest things that right now,
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information is one of the most valuable things that we have.
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So we need to protect.
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So I completely understand this.
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And also, I want to ask you about, you know,
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I was just thinking that the last time I had in the podcast to Larry Leppard,
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and we were talking about how gold was manipulated back then.
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So my question is that do you think that Bitcoin by its own nature,
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that is decentralized and is discretionary do you think that somehow it can be in the future even
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right now i don't know talking about the price that has gone down do you think it can be manipulated
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somehow or not so the short answer is yes but the the long answer it goes deep and i think what's
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worth to understand is the difference between the base money and a a money certificate or money
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substitute on top as and the the idea is that with gold that the physical gold atoms the gold coins
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the gold bars they you cannot fake them right you cannot manipulate them if you want to get a pure
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chunk of gold you have to do a whole bunch of work there is no shortcut right do you dig it out of
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the ground or potentially you consume an enormous amount of electricity to produce it like synthetically
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but ultimately you can't fake the metal and that is an important important baseline and so but in
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And of course, in Bitcoin, the UTXO on the blockchain is the base money equivalent.
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Like you cannot fake a UTXO.
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You can give to me something that you think is a UTXO but I will check against my own full node and see if it actually part of an unspent Bitcoin transaction And if not I tell you that you wrong and you won be able to convince me otherwise
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So it's clear, like metaphysically, both items are base money itself.
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And where, however, a base money alone does not make a money system.
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Money in its all shapes and forms is more of an attribute to things rather than a thing itself.
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And so people use other goods similarly as they use money.
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And, you know, that extends, for example, deposits in a bank.
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If you take your gold bars and you give them to a bank and you get a piece of paper in return, that is no longer base money.
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That is a money substitute.
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That's a money certificate.
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I prefer the term of a money warehouse receipt.
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And it's a warehouse that stores your stuff and you get a receipt that you have your gold stored in this warehouse.
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And, you know, the equivalent of that in Bitcoin is, and most exchanges have a custodial wallet where you can send their Bitcoin and they give you a digital token, so to say, in an account.
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And that is how, you know, how much money you've given.
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There's also more privacy preserving technology like CashQ or Fedimin that do similar with even more cooler tech.
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But ultimately, it's the same thing.
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It's not Bitcoin itself.
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It's the money substitute.
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And here they can control that.
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If like Mt. Gox, for example, they were saying that you had 100 Bitcoin in that exchange.
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But turns out that no, they've lost all the Bitcoin.
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They were hacked.
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And you actually have zero Bitcoin in this exchange because the attacker has it now.
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So that is one issue where there can be a difference between the number of tokens outstanding versus the number of base money that's actually in the vault.
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And that's where a lot of manipulation of the gold happens, where the bank only had 100 kilos of gold, but they claimed that they had 1000. And this leads to artificial money supply increase money in the broad sense, not just the base money, but also the money substitutes on top. And and this leads to similar things as as with inflation, the bank creates new money that trickles down the economy and messes up prices and distorts businesses and steals from people.
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So it's a bad thing.
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But this can absolutely happen in Bitcoin.
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And then in terms of price manipulation, like the prices just were whatever two people agreed upon that they traded.
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And here again, the price finding institutions, which are order book exchanges, they can also be manipulated.
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They might lie what they have in their order books and so on and what type of actual prices happened.
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But here is where simply the size of Bitcoin comes in.
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Bitcoin is a massive international asset that has a huge trading volume.
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And at this scale, it becomes difficult to fake a lot of selling of Bitcoin without that actually being recognized by the whole ecosystem as the global price.
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So the global price for something as liquid as Bitcoin is always quite hard to identify because there's trades happening all over the place.
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And we simply don't know all of the trades that are happening, right?
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The peer-to-peer Bitcoin trades are also, you know, a price of Bitcoin.
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And so general manipulation of price is sure possible.
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And the fiat system has found numerous institutions and legal contracts on how they can do this and get away with it.
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But ultimately, it's a risky game and the market is huge.
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And, you know, like manipulation is just one side of speculation.
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Like you think that the price will go up, but, you know, it might not.
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The future is uncertain.
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And then if you've made a short position somewhere or whatever, it might go against you and you might actually end up losing money.
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So not all manipulation ends up being profitable.
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And in the long run, if the people who manipulate will probably lose out if the system is fair and free and open.
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The problem is just that in the legacy world, you know, ETFs, stock exchanges, etc.
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There's so much shady things going on that like, yeah, it's not optimal.
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But that's just part of human action.
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It's messy.
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Yeah, I completely agree.
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Max, I told you that in the show, I have, well, when I'm in one third, probably in the middle of the pod,
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I have this game that I told you that not just me, but also my previous guests make a question for my next guest.
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So now's the time.
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Yes.
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So, yeah.
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So as you heard in the intro,
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my previous guest was Paco de la India.
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So he had a question for you.
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And then when we finish recording,
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I'll tell you who's my next guest
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so you can make the question.
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And we do, you know,
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this snowball effect or blockchain
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or timestamp.
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Yeah.
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As you want to call it.
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But yeah, it's cool.
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So anyways, this time,
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it's not my question.
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It's a question from Paco.
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and let me try to share it with you.
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I hope you can hear it.
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Let me find it really quick.
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Do you see Paco Yes Okay I hope you can hear it I just going to play it and then pause it So you tell me if you can hear him or not
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Namaste fellow Bitcoiner.
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I do not know if you like...
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Yeah, okay.
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Namaste fellow Bitcoiner.
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I do not know if you like to be called a Bitcoiner,
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but a Bitcoin believer.
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My name is Paco.
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And my question to you is,
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there is a lot of noise and a lot of debate
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happening on the ecosystem right now.
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upon BIP110.
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I come from India.
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And my question to you is,
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is this censorship or filtration necessary?
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Because what's stopping from one filtration
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leading to another?
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And how can we segregate whose filter is right
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and whose filter is wrong?
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Because the only reason me from India
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was equal to you listening to me is because my sats were equal to your sats and bitcoin defeats
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the purpose of color religion caste so do you think censorship is the way which is one of the
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properties the five strong properties our bitcoin has and if not then what to go ahead because
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name calling cat calling and name shaming people isn't the right way but it is democracy in our
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ecosystem so please do let me know what you think and to the next listeners to what is your call
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00:32:44,312 --> 00:32:56,172
right thanks that's a good question and ultimately we we need to have a certain set of rules on how
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bitcoin data should look like that's literally what the definition of a protocol is it's a
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It's a shared upon set of rules on what type of data is valid and what type of data is invalid.
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I mean, the extreme scenario is if I propose to you that we change the Bitcoin validity logic so that you don't need to have a valid signature if you want to spend a coin.
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That sounds like very evil if like it's unfair.
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If you're the only one that can spend your coins, I want to also be able to spend your coins.
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And so we should allow transactions and data into the blockchain that don't require signatures on inputs.
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And that's obviously not good.
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If we do this, then Bitcoin breaks because anyone can spend anyone's money and then it's just a mess.
402
00:33:40,712 --> 00:33:45,372
So obviously we need to have a set of rules that define what is valid and what is invalid.
403
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And the serious question is, OK, which do we choose?
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Because we have to choose something.
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Bitcoin is an engineered system.
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We came up with it.
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We can change it.
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We have to maintain it.
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So these are serious questions and there is a whole bunch of nuance to it.
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For one, it's good for Bitcoin to have a purpose.
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Like what is the thing that it's supposed to do?
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What do we engineer it to be?
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And I would say that the purpose is money.
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It's like broadly speaking, a thing that you can receive and hold and spend.
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And the thing that doesn't decay, that you can't easily destroy, like that would be a useful thing.
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And that includes having an affordable way of using the system in a privacy preserving way.
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And so that is what I would say is the goal that we should engineer Bitcoin to be.
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And there are obvious things that if we would change in the current design, that it would
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get a whole lot worse.
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We have a limit of the block size for reasons.
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And if we would allow any type of data to be added very cheaply, then it simply means
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that the real actual Bitcoin transactions might not be in those blocks anymore.
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And an attacker could fill up the system with types of data that makes it very expensive to sync up and to keep up.
424
00:35:03,132 --> 00:35:09,672
So we need to have some form of spam prevention where useless data is not allowed on the system.
425
00:35:09,952 --> 00:35:14,992
And how to exactly define useless data is hard because people use Bitcoin for different things.
426
00:35:15,232 --> 00:35:21,112
And even like not all use cases of arbitrary data on the blockchain are bad use cases.
427
00:35:21,112 --> 00:35:26,272
Now, many good use cases can be designed to be extremely efficient in terms of block space.
428
00:35:26,412 --> 00:35:32,912
That's always been one of the design or architecture engineering tradeoffs of we need to be efficient to verify.
429
00:35:33,552 --> 00:35:42,852
And that means little amount of block space to be used and little compute power in validating the block space to be used while still maximizing the amount of useful things that we can do.
430
00:35:43,052 --> 00:35:44,932
So it's just it's hard.
431
00:35:45,192 --> 00:35:47,512
Ultimately, that's the gist of it.
432
00:35:47,512 --> 00:35:53,252
And to be honest, I don't know the right way that where it makes holistic sense.
433
00:35:53,672 --> 00:35:56,612
I'm not that deep of a technical developer.
434
00:35:57,012 --> 00:36:01,052
So I don't I'm for sure not the expert to listen here to.
435
00:36:01,352 --> 00:36:03,592
But ultimately, I just realized that it's a hard problem.
436
00:36:03,592 --> 00:36:06,572
And it shows that Bitcoin is a is a manmade thing.
437
00:36:06,572 --> 00:36:07,772
We came up with it.
438
00:36:07,972 --> 00:36:11,652
And there was a reason like the creator had an intent in mind in what it does.
439
00:36:11,912 --> 00:36:16,732
And now we have to grapple with how do we continue to maintain this piece of tooling
440
00:36:16,732 --> 00:36:18,832
so that it continues to work
441
00:36:18,832 --> 00:36:20,872
maybe even better than it originally worked
442
00:36:20,872 --> 00:36:35,050
like that would be cool and in a way that it solves more use cases without losing the important foundational aspects of it that that made it so useful at first and maybe to to the manipulation point to tie this back there
443
00:36:35,050 --> 00:36:41,490
because human is man-made it can be man-destroyed and there are certainly people who wouldn't who
444
00:36:41,490 --> 00:36:46,730
would prefer if bitcoin is destroyed so we must be aware that there are people and organizations
445
00:36:46,730 --> 00:36:53,010
that are participating in building Bitcoin with the intent to slow it down, to hamper it,
446
00:36:53,010 --> 00:36:58,690
to neuter it, to make it less private, less secure, less scalable. And these types of
447
00:36:58,690 --> 00:37:05,530
infiltrations and attacks are obvious. I mean, there's 100% certainty that this is happening,
448
00:37:05,710 --> 00:37:11,810
and for a long time in Bitcoin. So having this adversarial mindset of not everyone who's working
449
00:37:11,810 --> 00:37:17,690
on bitcoin actually wants the best for bitcoin is is important to realize and and so decisions have
450
00:37:17,690 --> 00:37:24,110
to be really carefully weighted and and understood and it's not easy to throw out an opinion when you
451
00:37:24,110 --> 00:37:29,570
haven't really done a lot of your due diligence and and research and assume that people on both
452
00:37:29,570 --> 00:37:34,810
sides of such arguments as bit 110 are i mean there's more than two sides for one but like
453
00:37:34,810 --> 00:37:40,890
that on on for all different ideals there there might be infiltrators in that shape public discourse
454
00:37:40,890 --> 00:37:45,270
and opinion to convince people of actions that would ultimately harm Bitcoin.
455
00:37:45,270 --> 00:37:51,110
So that's something to consider as well on our do we have a resilient enough process
456
00:37:51,110 --> 00:37:57,550
and culture for applying changes to Bitcoin such that it will survive attacks, including
457
00:37:57,550 --> 00:38:01,930
infiltration and others that are currently happening and will continue to happen for
458
00:38:01,930 --> 00:38:03,070
the next hundred years.
459
00:38:03,370 --> 00:38:09,230
And how can we build a culture of verification and resilience and continuously well tested
460
00:38:09,230 --> 00:38:12,690
and thoughtful improvements to the system without breaking it.
461
00:38:13,210 --> 00:38:15,990
That's a really, really, really difficult thing.
462
00:38:16,190 --> 00:38:20,910
The whole Bitcoin project or experiment is ridiculous on many levels.
463
00:38:21,290 --> 00:38:24,430
Like we're trying to solve something that's really, really, really hard.
464
00:38:24,570 --> 00:38:27,370
And we've made great efforts and great progress.
465
00:38:27,650 --> 00:38:28,210
And it's working.
466
00:38:28,430 --> 00:38:30,830
The big question is, can we keep it working?
467
00:38:30,830 --> 00:38:33,450
And can we potentially even make it better?
468
00:38:33,550 --> 00:38:37,090
Actually, I want to ask you something very similar to Paco
469
00:38:37,090 --> 00:38:38,570
and related to what you're saying,
470
00:38:38,570 --> 00:38:43,210
because we have been talking about privacy and digital scarcity about Bitcoin.
471
00:38:43,550 --> 00:38:48,690
So, and in fact, Bitcoin, it's all one of humanity's biggest problem, right?
472
00:38:48,770 --> 00:38:53,730
That is that it was the digital scarcity, of course, without a trusted third party,
473
00:38:53,990 --> 00:38:58,010
but it didn't sell privacy at the base layer because it's transparent.
474
00:38:58,210 --> 00:39:00,950
So in fact, every transaction is public, right?
475
00:39:00,970 --> 00:39:02,370
You can see it on the blockchain.
476
00:39:02,530 --> 00:39:05,210
You can go to Mempool and check it.
477
00:39:05,210 --> 00:39:07,750
So how do you think about that trade-off?
478
00:39:07,750 --> 00:39:11,450
Was digital scarcity simply the bigger problem to solve first?
479
00:39:11,630 --> 00:39:17,030
Or do you think Bitcoin, Bitcoin's transparent design was actually necessary for it to be successful?
480
00:39:17,190 --> 00:39:22,410
I think it was mainly a technological possibility or know-how problem.
481
00:39:22,710 --> 00:39:25,570
Like it's hard to build anonymous systems.
482
00:39:25,970 --> 00:39:27,970
It's hard to build decentralized systems.
483
00:39:28,230 --> 00:39:31,490
It's exponentially hard to build anonymous decentralized systems.
484
00:39:31,770 --> 00:39:34,750
And so we've had anonymous digital money since the 1980s.
485
00:39:34,750 --> 00:39:40,450
1880s like that was a solved problem with with chominy cash i mean of course it could be improved
486
00:39:40,450 --> 00:39:45,450
tremendously on top of old designs but the the gist of it is pretty obviously great and what was
487
00:39:45,450 --> 00:39:51,290
lacking was to have base money in cyberspace so and for base money central decentralization is
488
00:39:51,290 --> 00:39:56,890
critical because if if one person dies all the gold disappears then it's not useful this money
489
00:39:56,890 --> 00:40:02,570
right we we need something that survives all of us and and for that a decentralized system is the
490
00:40:02,570 --> 00:40:07,830
only proper way to or maybe not the only but seems to be a really obvious way to doing it and and the
491
00:40:07,830 --> 00:40:13,350
problem was simply hard and satoshi all he could do was to solve one side of that equation to make
492
00:40:13,350 --> 00:40:17,770
it decentralized and unstoppable and i mean it's good that he did it that's why bitcoin is still
493
00:40:17,770 --> 00:40:25,650
around so well done but since then so the the the research and development on how can we apply
494
00:40:25,650 --> 00:40:31,950
cryptography in in existing and new novel use cases to make something like bitcoin more anonymous
495
00:40:31,950 --> 00:40:36,590
has been on the research forefront since almost as soon as Bitcoin started.
496
00:40:36,790 --> 00:40:41,030
I mean, Bitcoin's first feedback on the mailing list was,
497
00:40:41,310 --> 00:40:43,470
this doesn't scale because it is not private.
498
00:40:43,650 --> 00:40:47,970
The idea that we all have to verify everyone else's transactions is horrible for privacy
499
00:40:47,970 --> 00:40:51,110
because you cannot use the system without telling the whole world
500
00:40:51,110 --> 00:40:53,390
that you use the system and how much Bitcoin you send.
501
00:40:53,790 --> 00:40:54,390
That's ridiculous.
502
00:40:54,770 --> 00:40:56,690
And then also that means it doesn't scale.
503
00:40:56,830 --> 00:40:59,510
Like we can't all verify every transaction of everyone else.
504
00:40:59,510 --> 00:41:05,070
So there are a couple of different ways that we can improve privacy if we change the protocol.
505
00:41:05,070 --> 00:41:13,430
One, for example, would be to like there's one consensus rule in Bitcoin that the value of the inputs must be larger than the value of the output.
506
00:41:13,630 --> 00:41:19,710
So this means that we can do this just with clear arithmetics, like five plus four.
507
00:41:20,070 --> 00:41:24,230
That's valid or like five inputs, five outputs, five Bitcoin input, five, four Bitcoin output.
508
00:41:24,370 --> 00:41:25,570
That's a valid transaction.
509
00:41:25,570 --> 00:41:29,450
So we can do it as Bitcoin, but we can also use homomorphic encryption.
510
00:41:29,510 --> 00:41:34,970
Patterson commitments, bulletproofs, this type of cryptographic arcana where you can simply prove
511
00:41:34,970 --> 00:41:39,990
that the value of the inputs is larger than the value of the output without revealing the
512
00:41:40,008 --> 00:41:45,168
actual value of the inputs and outputs clever trick of math that makes this work with some
513
00:41:45,168 --> 00:41:50,148
reasonable cryptographic assumptions satoshi could have implemented this if he knew about the type of
514
00:41:50,148 --> 00:41:54,628
cryptography i don't think it existed so something like monero implemented this about many years ago
515
00:41:54,628 --> 00:42:00,648
so you can make changes to bitcoin or do a ground-up re-implementation of something like
516
00:42:00,648 --> 00:42:06,068
bitcoin which would be something like monero and and add these types of privacy preserving
517
00:42:06,068 --> 00:42:10,668
technologies. There's a couple aspects here is that one changing a running system is hard. And
518
00:42:10,668 --> 00:42:15,168
especially if you want to keep backwards compatibility, which Bitcoin espouses, right?
519
00:42:15,208 --> 00:42:19,708
Like you, you can put your Bitcoin in a vault somewhere and then 10 years later, you should
520
00:42:19,708 --> 00:42:24,388
still be able to use it and be able to spend it. That's one of the like obvious assumptions that
521
00:42:24,388 --> 00:42:28,488
Bitcoin has. Well, that means that upgrades are really difficult because not everyone is offline
522
00:42:28,488 --> 00:42:33,968
online. Not everyone wants to move his money. So making upgrades is hard for different types of
523
00:42:33,968 --> 00:42:39,688
reasons and especially upgrades that do not only come with clear-cut benefits like that's another
524
00:42:39,688 --> 00:42:46,188
aspect that digital money is such a tight design space that any one thing that you change might
525
00:42:46,188 --> 00:42:50,888
bring you some benefits but it will also bring you a bunch of other downsides like right now
526
00:42:50,888 --> 00:42:55,828
the monero transaction is like at least four times larger than a bitcoin transaction in terms of data
527
00:42:55,828 --> 00:43:01,908
size and a lot harder to validate in terms of compute seconds so this means it doesn't scale
528
00:43:01,908 --> 00:43:08,108
as well and and that's a downside like if bitcoin had the base layer design of monero we would not
529
00:43:08,108 --> 00:43:14,848
have enough block space to to to make all of the transactions so that is an issue that again you
530
00:43:14,848 --> 00:43:21,548
can design around dynamic block sizes and so on but it's a yeah it all comes with downsides and
531
00:43:21,548 --> 00:43:27,688
sometimes making a small minor improvement to bitcoin's protocol does not justify the large
532
00:43:27,688 --> 00:43:32,448
cost of first of all changing the protocol but then also living with the downside of those changes
533
00:43:32,448 --> 00:43:38,428
and for for that reason like changing a running system is hard and it will not happen unless it's a
534
00:43:38,428 --> 00:43:43,468
meaningful improvement and thankfully we have other ways of making bitcoin more private that's
535
00:43:43,468 --> 00:43:49,448
coin join and the lightning network and e-cash and and the other second layer technologies shielded
536
00:43:49,448 --> 00:43:54,588
client-side validation and and so on like there's there's cool things that we can do without having
537
00:43:54,588 --> 00:44:00,288
to change Bitcoin's consensus protocol to still enable those users that need it to have
538
00:44:00,288 --> 00:44:02,788
a anonymous way of sending their Bitcoin.
539
00:44:03,148 --> 00:44:08,388
Also, I want to ask you about something related to this, but I think this for now, I think
540
00:44:08,388 --> 00:44:11,008
is a philosophical and more hypothetical question.
541
00:44:11,588 --> 00:44:15,868
So I think around two months ago, Bob Burnett was in the show.
542
00:44:16,168 --> 00:44:16,688
Do you know him?
543
00:44:16,788 --> 00:44:19,928
I don't think we ever met in person, but I've seen some of this video.
544
00:44:19,928 --> 00:44:29,948
Yeah, so he was in the show and we talked about the block space scarcity and of course about Bitcoin mining because that was his expertise.
545
00:44:30,328 --> 00:44:40,708
And I have adopted one, the question actually that I had made to the next guest, because actually I think it's a good question that we need to start asking.
546
00:44:40,708 --> 00:44:45,808
Even I think for now, it's a bit early, but I want to ask you because now it's a real question in the pod.
547
00:44:45,808 --> 00:44:51,128
And I know that you're highly critical of intellectual property.
548
00:44:51,388 --> 00:44:52,808
So the idea comes from here.
549
00:44:53,648 --> 00:44:58,728
So the question was that we know that at some point,
550
00:44:58,908 --> 00:45:02,908
Bitcoin wallets will be threatened by quantum computing.
551
00:45:03,248 --> 00:45:05,848
And of course, we know that Bitcoin is software,
552
00:45:06,068 --> 00:45:07,988
so software can be updated, right?
553
00:45:08,148 --> 00:45:11,668
But the question here is that there will be a moment
554
00:45:11,668 --> 00:45:19,868
that people started debating about what to do with the sats from satoshi so what bob brunette
555
00:45:19,868 --> 00:45:25,628
was asking is like what should we do with with bitcoin of satoshi should we remain it in in the
556
00:45:25,628 --> 00:45:30,628
wallets should we move it so the question was should we move it or should we leave it there
557
00:45:30,628 --> 00:45:37,908
what should we do in order when this you know this time comes yeah that's a difficult question
558
00:45:37,908 --> 00:45:44,228
and it depends on the exact scenario but ultimately at at some point the the bitcoin
559
00:45:44,228 --> 00:45:49,888
security model will will break and hopefully it's a point well advertised in the future and we can
560
00:45:49,888 --> 00:45:55,288
prepare and and roll out upgrades and then ultimately the way most likely i think that
561
00:45:55,288 --> 00:46:01,208
it will happen is is that there is a certain time period for for when you can upgrade and
562
00:46:01,208 --> 00:46:07,588
and move your coins to a new script or a new model of bitcoin that that protects against these types
563
00:46:07,588 --> 00:46:12,428
of attacks and obviously if it's if it's well designed then many people will use it for the
564
00:46:12,428 --> 00:46:18,548
fact of do do we at some point disallow the spending of certain coins it's a it's a good
565
00:46:18,548 --> 00:46:23,788
question like for example maybe a one actual historical example from recently is that there
566
00:46:23,788 --> 00:46:31,228
was a bug in the ccash node implementation that allowed attackers to to spend unauthorized money
567
00:46:31,228 --> 00:46:36,568
out of because of their advanced use of zero knowledge cryptography which again comes with
568
00:46:36,568 --> 00:46:38,528
downsides like there might be hacks like this.
569
00:46:38,568 --> 00:46:42,908
And so they simply decided to stop processing these types of transactions
570
00:46:42,908 --> 00:46:45,328
that were vulnerable, at least for a temporary time.
571
00:46:45,368 --> 00:47:00,506
So we see that for one it is possible technically right if the ecosystem wants to to make certain coins unspendable for whatever reason and of course the large percentage or a large group of of of the ecosystem needs to do that
572
00:47:00,506 --> 00:47:05,266
and want to do that so most likely in in such a situation there there would probably be a fork
573
00:47:05,266 --> 00:47:12,686
where a group of people wants to make the spending of those coins like impossible and another group
574
00:47:12,686 --> 00:47:18,806
that will want to keep them spendable and you know potentially more than these two options and
575
00:47:18,806 --> 00:47:24,046
we would have the forks or different types of assets that are run and supported by different
576
00:47:24,046 --> 00:47:29,606
types of node and you would have coins in in both of these or all of these different forks and have
577
00:47:29,606 --> 00:47:35,886
the opportunity to you know hold or or sell these assets and then of course the question in what type
578
00:47:35,886 --> 00:47:41,606
of blockchain do you want to get paid in the future like will you accept coin if they come
579
00:47:41,606 --> 00:47:47,406
from the chain that disallowed the spending. And very soon there will be a market price forming
580
00:47:47,406 --> 00:47:53,046
between the different coins. So it will lead to some complexity. I mean, the aspect that Bitcoin
581
00:47:53,046 --> 00:47:57,926
or something like Bitcoin can be forked creates a lot of economic uncertainty and pricing
582
00:47:57,926 --> 00:48:02,906
difficulty. We've seen this during the block size wars. It's not impossible to manage, but it's
583
00:48:02,906 --> 00:48:07,986
costly to manage this type of situation for businesses and merchants and users and requires
584
00:48:07,986 --> 00:48:12,566
a lot of development engineering as well as educational so these things don't come without
585
00:48:12,566 --> 00:48:16,946
a cost and and so therefore i think they will only happen if a majority of people disagree
586
00:48:16,946 --> 00:48:25,006
and then we'd have multiple versions of the system and most likely i would expect that one of these
587
00:48:25,006 --> 00:48:31,026
in the long run would win and because an efficient market tends towards one single money with the
588
00:48:31,026 --> 00:48:35,546
highest liquidity for a different reason so i would expect this to happen it might take a long
589
00:48:35,546 --> 00:48:41,426
tiny but i we will never be in in a world with only one single money there will always be
590
00:48:41,426 --> 00:48:46,526
differences in agreement and very much so also with digital money i mean we've seen that there
591
00:48:46,526 --> 00:48:53,306
are millions of shit coins out there and that that will continue to to exist and be a thing like
592
00:48:53,306 --> 00:48:58,946
we we can now simply copy not only the the concept and the rule set of a money but we can copy the
593
00:48:58,946 --> 00:49:04,426
history of a money and we can fork the history and and simply roll it back that's all just code
594
00:49:04,426 --> 00:49:07,166
and we can design the code in a numerous of different ways.
595
00:49:07,426 --> 00:49:11,066
And honestly, what people will prefer, I have no idea.
596
00:49:11,646 --> 00:49:14,746
Like, I mean, I think like, yeah, that's just impossible
597
00:49:14,746 --> 00:49:17,166
for any one person to speak with confidence on
598
00:49:17,166 --> 00:49:19,606
because value is in the hearts and minds of individuals.
599
00:49:19,726 --> 00:49:21,686
And we're talking about a scenario
600
00:49:21,686 --> 00:49:23,706
that's hopefully decades in the future.
601
00:49:23,706 --> 00:49:25,846
And I have no idea what people will be thinking
602
00:49:25,846 --> 00:49:27,186
and valuing at that point.
603
00:49:27,306 --> 00:49:32,186
So we'll see, like it'll be an interesting experiment for sure.
604
00:49:32,186 --> 00:49:37,546
and we'll probably learn a whole bunch before then and during and after yeah let's see yeah let's see
605
00:49:37,546 --> 00:49:44,126
also every time that i make this question i always think differently i always change my opinion about
606
00:49:44,126 --> 00:49:50,566
about what i think about it so because it's very complex what's the thing about and for now it's
607
00:49:50,566 --> 00:49:55,826
hypothetical right thankfully we don't have to deal with that issue yet it's a problem for future us
608
00:49:55,826 --> 00:50:01,906
yeah exactly exactly exactly but we'll see we're gonna start wrap it up i have like
609
00:50:01,906 --> 00:50:07,526
probably two three more questions that are not related one to another but i want to ask you and
610
00:50:07,526 --> 00:50:12,786
i know you haven't been in el salvador yet but i want to know a little bit about your opinion
611
00:50:12,786 --> 00:50:18,266
perspective in general about what you have perceived in in our country i always do this
612
00:50:18,266 --> 00:50:23,446
question and i want to leave it like free on whatever you want opinion like in bitcoin or
613
00:50:23,446 --> 00:50:29,666
how the country has developed or what can even we as salvadorians learn from other bitcoiners
614
00:50:29,666 --> 00:50:32,186
because in the end, we are in the same path.
615
00:50:32,626 --> 00:50:34,426
So yeah, just your thoughts in general
616
00:50:34,426 --> 00:50:36,186
about what's going on in my country.
617
00:50:36,426 --> 00:50:38,866
Yeah, the first time I heard about El Salvador
618
00:50:38,866 --> 00:50:40,786
was in my Spanish class in high school
619
00:50:40,786 --> 00:50:44,426
where it had a section on MS-13
620
00:50:44,426 --> 00:50:47,366
and the immense violence of the country.
621
00:50:47,526 --> 00:50:49,286
So that was really the only thing
622
00:50:49,286 --> 00:50:51,646
I knew about El Salvador for a long time.
623
00:50:52,306 --> 00:50:54,706
Then eventually came the Bitcoin news.
624
00:50:54,986 --> 00:50:57,426
Well, I mean, first I learned about Bitcoin jungle,
625
00:50:57,426 --> 00:50:59,506
not Bitcoin jungle, Bitcoin beach early on.
626
00:50:59,666 --> 00:51:03,126
and what BitLick was doing there, or Galoi back then.
627
00:51:03,206 --> 00:51:06,346
So really interesting, just general technical development.
628
00:51:06,606 --> 00:51:09,806
It was cool to see it spring up as an early circular economy,
629
00:51:09,806 --> 00:51:14,586
where people really put their minds to gathering a community around this
630
00:51:14,586 --> 00:51:17,286
and educating and providing the technical support.
631
00:51:17,546 --> 00:51:20,746
And it's really great to see how much that flourished.
632
00:51:21,086 --> 00:51:25,006
Like, there are lots of people that really like Bitcoin
633
00:51:25,006 --> 00:51:27,006
and use Bitcoin on a daily basis there.
634
00:51:27,006 --> 00:51:32,706
I've heard from numerous friends that you just live there and you spend your Bitcoin and it's normal.
635
00:51:32,986 --> 00:51:34,826
So that's great to see.
636
00:51:35,206 --> 00:51:39,866
When I first heard the announcement about El Salvador adopting Bitcoin as legal tender,
637
00:51:40,166 --> 00:51:42,066
I mean, for one, that's great.
638
00:51:42,406 --> 00:51:48,286
Like a government that doesn't harass its people because they use Bitcoin is better.
639
00:51:48,286 --> 00:51:53,166
And I'm a fan of general, like if the government steals less, that's a good thing.
640
00:51:53,166 --> 00:51:57,726
If we can get theft of the government down to zero, I'd be happy.
641
00:51:57,726 --> 00:52:12,424
And that what I advocate for But you know I take what we can get on the short term So that was generally a very positive surprise and a good move I mean it inevitable that at some point a country would support something like Bitcoin
642
00:52:12,884 --> 00:52:14,744
It's just cool that we got to see that.
643
00:52:14,904 --> 00:52:18,044
Very early on, Dan had some criticisms with the approach.
644
00:52:18,804 --> 00:52:21,604
It kind of depends on what's the definition of legal tender.
645
00:52:21,744 --> 00:52:27,424
But the way that I understand it is that it is a mandate to consider if you get paid in
646
00:52:27,424 --> 00:52:32,924
this thing, then you have to consider your debts as obligated. And I'm not a big fan of that. I
647
00:52:32,924 --> 00:52:37,044
think people should be free to make their own contracts. And if I don't want to get paid in
648
00:52:37,044 --> 00:52:41,644
Bitcoin and someone gives me Bitcoin and now I have to do the business, then I don't think that's
649
00:52:41,644 --> 00:52:46,624
good. I think both parties to a trade should agree to all the details of the contract. And
650
00:52:46,624 --> 00:52:52,544
a third party interfering with that is not great. That leads to resentment. For one, like if anyone
651
00:52:52,544 --> 00:52:57,184
forces you to use anything, you probably won't like it. And you won't like the thing that he
652
00:52:57,184 --> 00:53:02,764
forces you to right so i think it's not just bad for like the general well-being of of salvadorians
653
00:53:02,764 --> 00:53:07,764
but i think it's also bad for the adoption of bitcoin and i from the outside i would guess that
654
00:53:07,764 --> 00:53:13,924
there is hopefully a minority but still a decent chunk of people who are just against bitcoin and
655
00:53:13,924 --> 00:53:20,664
i would guess that some aspect of this is part because they feel that someone else took a decision
656
00:53:20,664 --> 00:53:26,924
for them that they don't agree with and that's absolutely understandable so this this is one
657
00:53:26,924 --> 00:53:29,764
where I just strategically would not have gone as much.
658
00:53:29,904 --> 00:53:33,524
I think all that you need to do on a legislative governmental level
659
00:53:33,524 --> 00:53:35,364
is to say that you can use Bitcoin.
660
00:53:35,584 --> 00:53:37,164
We won't put you in jail if you do.
661
00:53:37,284 --> 00:53:39,524
You don't have to pay capital gains taxes.
662
00:53:39,724 --> 00:53:41,224
You just do your regular business.
663
00:53:41,364 --> 00:53:42,864
You do your regular accounting, whatever.
664
00:53:43,184 --> 00:53:44,264
And that's it.
665
00:53:44,624 --> 00:53:48,784
That's all the affirmation of the government that is actually needed
666
00:53:48,784 --> 00:53:52,284
to, I think, have a much more peaceful and mutually beneficial
667
00:53:52,284 --> 00:53:54,324
rollout of such a technology.
668
00:53:54,324 --> 00:54:01,224
because changing a money is is a crazy amount of work like it just takes time and an effort and a
669
00:54:01,224 --> 00:54:06,104
whole bunch of people collaborating on this so you have to do it i think carefully and slowly but
670
00:54:06,104 --> 00:54:11,524
on the other hand you know we saw with with imf that the country is not the country is still
671
00:54:11,524 --> 00:54:16,844
dependent on the old legacy fiat money system in order to survive especially the government like
672
00:54:16,844 --> 00:54:21,544
the government would be bankrupt without the imf loan so they that puts them in a very weak
673
00:54:21,544 --> 00:54:27,024
negotiation position and arguably if they would have slowed down the enrollment and maybe the
674
00:54:27,024 --> 00:54:31,784
extent of the enrollment then pull back or push back from the imf would have come sooner than it
675
00:54:31,784 --> 00:54:36,064
would actually have landed properly so again it's always difficult to discuss you know what could
676
00:54:36,064 --> 00:54:40,624
have been what what should have been and and what would be the outcome of of that but ultimately i
677
00:54:40,624 --> 00:54:47,224
think salvador is a really a cool part of of history something that hasn't been seen before
678
00:54:47,224 --> 00:54:50,104
and something where we've learned a whole bunch.
679
00:54:50,104 --> 00:54:55,124
And hopefully those changes were to the better of the local people
680
00:54:55,124 --> 00:54:58,284
and the economy and not just a kind of tourist attraction.
681
00:54:58,724 --> 00:54:59,784
So let's see.
682
00:54:59,884 --> 00:55:02,924
I'm really curious where Salvador goes in the next couple of years.
683
00:55:03,184 --> 00:55:06,224
And I'm looking forward to eventually stopping by
684
00:55:06,224 --> 00:55:07,904
and checking it out in person.
685
00:55:08,064 --> 00:55:08,764
Yeah, me too.
686
00:55:08,984 --> 00:55:10,124
Let's see where we go.
687
00:55:10,504 --> 00:55:14,004
And of course, you're more than welcome to come to Salvador Max.
688
00:55:14,224 --> 00:55:16,464
Yeah, my other question that I told you is not related,
689
00:55:16,464 --> 00:55:23,224
But I think it's the question in two questions in one that is like, what is the most uncomfortable
690
00:55:23,224 --> 00:55:26,624
truth that you have discovered through all these years studying privacy?
691
00:55:27,004 --> 00:55:32,164
And also, which cyberpunk deserves far more recognition than history gives them?
692
00:55:32,344 --> 00:55:38,624
Yeah, the, I guess, uncomfortable truth to some extent is that people just use the tech
693
00:55:38,624 --> 00:55:40,064
as it is designed to.
694
00:55:40,304 --> 00:55:44,884
And in the sense of it puts so much responsibility on the builders of technology.
695
00:55:44,884 --> 00:55:51,884
And the kind of also unintended consequences of some of their actions can have really drastic consequences.
696
00:55:52,824 --> 00:56:00,324
And on top of that, it's hard to build secure systems and it's hard to build unstoppable systems and it's hard to build private systems.
697
00:56:00,824 --> 00:56:08,944
So the economic rationale for why do we have so much surveillance tech is because it's easier to build tech that surveils users.
698
00:56:09,224 --> 00:56:12,984
And that means a whole bunch of people will build this type of technology and then use it.
699
00:56:12,984 --> 00:56:19,064
And the outcomes of that can be quite scary if it becomes so easy to ship a product to 8 billion people.
700
00:56:19,064 --> 00:56:27,124
And if the foundational efficacy of that software is not well thought through and beneficial for the users and broader,
701
00:56:27,484 --> 00:56:32,384
then that comes with a lot of potential for just bad consequences.
702
00:56:32,704 --> 00:56:37,904
So just that realization that technology is a two-sided sort of it can be used for good or for bad.
703
00:56:37,904 --> 00:56:48,784
And how we build the systems really have an outsized impact on the amount of good or the amount of bad that we experience as a civilization.
704
00:56:49,404 --> 00:56:55,304
And so we have to be really, really careful with how we build things and do our best effort on doing it right.
705
00:56:55,344 --> 00:56:58,504
Because if we mess it up, then the consequences are dire.
706
00:56:58,724 --> 00:57:04,244
Like, you know, the people who worked on the early Internet, they were all idealists that wanted to make the world a better place.
707
00:57:04,244 --> 00:57:23,762
But because of some small mistakes in the architecture and in the design the consequences we now have is doom scrolling on TikTok you know with with with a shitty screen late at night forever Right Like this it could have been all very different if we would have built it differently and hopefully in this iteration we
708
00:57:23,762 --> 00:57:30,182
we will at least not make the same mistakes again but hopefully do generally just a better job but
709
00:57:30,182 --> 00:57:35,002
i'm sure that we will mess things up and so we'll have to have ways on how we can fix and and improve
710
00:57:35,002 --> 00:57:40,462
it for the next generation you know my last question max is that i know you recently wrote a
711
00:57:40,462 --> 00:57:46,742
book called the taxology of privacy so if bitcoin taught the world how to separate money from
712
00:57:46,742 --> 00:57:53,002
the states what do you hope your book teaches the world about the relationship between privacy and
713
00:57:53,002 --> 00:58:00,082
freedom yeah so the one of the big goals of the book was to help economists understand the real
714
00:58:00,082 --> 00:58:05,702
power and possibilities of the cypherpunk technology because a lot of my austrian heroes
715
00:58:05,702 --> 00:58:12,022
are really stupid on Bitcoin and on broader tech in general.
716
00:58:12,322 --> 00:58:13,182
And that's a shame.
717
00:58:13,442 --> 00:58:18,762
They should be very enthusiastic about this and use it in their daily lives as well to
718
00:58:18,762 --> 00:58:23,062
make sure that, for one, their speech is not censored, but then also that their private
719
00:58:23,062 --> 00:58:25,422
communications and coordinations are well protected.
720
00:58:25,562 --> 00:58:27,162
And of course, their money is protected.
721
00:58:27,162 --> 00:58:33,742
So there's a lot of work that we can do of helping Austrians understand or get to experience
722
00:58:33,742 --> 00:58:38,242
the technologies that their philosophy and reasoning advocates for. So there's a huge
723
00:58:38,242 --> 00:58:42,982
overlap here. And then also the cypherpunks. I've known so many people who are building awesome
724
00:58:42,982 --> 00:58:49,342
freedom tech, but their understanding of economics is quite limited. And I think that leads to
725
00:58:49,342 --> 00:58:54,722
mistakes. It helps if you can reason through the consequences of actions before you act on them.
726
00:58:54,862 --> 00:59:00,662
And having this type of worldview is immensely useful. Economics is not just for businessmen.
727
00:59:00,662 --> 00:59:06,422
And economics is very much for builders, for families, for friends, because I think it will
728
00:59:06,422 --> 00:59:11,482
positively affect your relationships, broadly speaking, as much as it will affect your finance
729
00:59:11,482 --> 00:59:12,782
or economic ability.
730
00:59:12,782 --> 00:59:18,182
So really just studying economics per se is really interesting, specifically for builders
731
00:59:18,182 --> 00:59:23,542
to make sure that the technologies that we build have the logical incentives to resist
732
00:59:23,542 --> 00:59:24,702
and survive and thrive.
733
00:59:24,962 --> 00:59:30,062
So that, you know, if David Chom would have had a little bit more understanding of economics
734
00:59:30,062 --> 00:59:35,362
and business acumen, we would have had anonymous digital money since before.
735
00:59:35,662 --> 00:59:37,102
And we could have had that.
736
00:59:37,262 --> 00:59:43,362
But unfortunately, he made some economic and business mistakes that cost him and us very
737
00:59:43,362 --> 00:59:43,822
dearly.
738
00:59:43,962 --> 00:59:49,022
So my goal is in part to make sure that builders build better technologies that will actually
739
00:59:49,022 --> 00:59:52,362
outlast them because of a better understanding of economics.
740
00:59:52,642 --> 00:59:58,402
And then the third audience in part is just people who feel that something is off and that
741
00:59:58,402 --> 01:00:04,322
want to have a meaningful impact in their life in a very short amount of time. Because if you use
742
01:00:04,322 --> 01:00:09,762
those technologies that the cypherpunks have built, then the amount of actual tangible freedom
743
01:00:09,762 --> 01:00:16,162
that you can manifest in your life overnight is actually ridiculous. Like the extent of the
744
01:00:16,162 --> 01:00:22,902
technologies we have is just wild and you can just use them. And that's it. So hopefully that's
745
01:00:22,902 --> 01:00:27,542
the gist of the book. And also that reminded me of the earlier question of what cypherpunk
746
01:00:27,542 --> 01:00:30,462
is heavily under-read or under-appreciated.
747
01:00:30,762 --> 01:00:33,102
And it would be the man who wrote the foreword to my book,
748
01:00:33,642 --> 01:00:34,582
Paul Rosenberg.
749
01:00:34,782 --> 01:00:38,662
He is an absolute legend in the cypherpunk history.
750
01:00:38,902 --> 01:00:41,982
He was there in the late 1990s
751
01:00:41,982 --> 01:00:44,122
when a group of people in Costa Rica, actually,
752
01:00:44,322 --> 01:00:45,262
Salvador's name,
753
01:00:46,062 --> 01:00:49,382
were building one of the early anonymous marketplaces,
754
01:00:49,722 --> 01:00:51,522
anonymous company registration system,
755
01:00:52,222 --> 01:00:54,702
anonymous remailers and money system
756
01:00:54,702 --> 01:00:57,102
with quite cool success, actually.
757
01:00:57,542 --> 01:01:03,762
So he's been there and done that for the last almost 30 years on the forefront of cypherpunk.
758
01:01:03,762 --> 01:01:12,782
He wrote an amazing fiction book called A Lodging of Wayfaring Men by Paul Rosenberg, which kind of tells a fictionalized account of that history.
759
01:01:12,942 --> 01:01:15,162
And that's an incredibly inspirational book.
760
01:01:15,462 --> 01:01:25,022
So if you would like to hear some real cypherpunk fiction that is pre-Bitcoin but very much talks about the mission of Bitcoin, then check out that book.
761
01:01:25,022 --> 01:01:36,282
And he is The Breaking Dawn, another great book of it, and really an inspirational figure who inspired a lot of my friends, including myself, to build the technologies that we're building now.
762
01:01:36,282 --> 01:01:54,342
And I'd hope that more people read his work and also his newsletter and so on, because he's very kind and inspirational and an incredibly positive man who really values the positive impact that our technology can have and the real impact it can in a very short time.
763
01:01:54,342 --> 01:02:08,182
Just recently when I spoke, he was saying like, it's simply incredible that 30 years ago, the types of technologies that we dreamed about that would have been like, you know, cypherpunk heaven, we are so past that point.
764
01:02:08,422 --> 01:02:13,622
The technologies that we have today are so much better than the early guys could even dream of.
765
01:02:13,622 --> 01:02:29,922
So we have most of the building blocks to really make an incredible difference. And now it's all about people acting in the way that they see fit and in a way that helps them and others and simply choosing to be free because that just like privacy.
766
01:02:30,000 --> 01:02:37,220
is a choice. The way to get out of slavery is to make a mental effort and recognition that you are
767
01:02:37,220 --> 01:02:43,720
not a slave and that you're actually free and that you shall do as thou wilt. And that is the basis
768
01:02:43,720 --> 01:02:48,620
to where freedom actually starts. And hopefully we can inspire more people to make such a radical
769
01:02:48,620 --> 01:02:54,860
choice. And I hope that they will not regret it because the consequences of freedom is usually
770
01:02:54,860 --> 01:03:00,860
very very good yeah absolutely max i just want to say thank you for your time and for spending the
771
01:03:00,860 --> 01:03:06,960
podcast we have i think our audience will learn today a lot about more this history of cyberpunk
772
01:03:06,960 --> 01:03:13,540
but also digital scarcity also about bitcoin and yeah i didn't want to pass to finish the pod
773
01:03:13,540 --> 01:03:18,020
without saying that you have your book i know it is really recent so i'm excited also to
774
01:03:18,020 --> 01:03:24,440
to read it guys check it out i think i'm gonna post it post it in the podcast notes and so yeah
775
01:03:24,440 --> 01:03:27,240
I just want to say thank you for your time for being Bitcoin.
776
01:03:27,240 --> 01:03:38,804
Yeah thanks very much for you carrying on the torch of education in your home country That awesome We need a lot more of that Passing on what you come to understand to be true is a very fulfilling role
777
01:03:38,944 --> 01:03:40,144
So it's good that you're doing that.
778
01:03:40,764 --> 01:03:44,044
And yeah, check out my book, The Praxeology of Privacy.
779
01:03:44,164 --> 01:03:47,264
It's available for free on towardsliberty.com.
780
01:03:47,404 --> 01:03:50,924
It's also published on NOSTER, by the way, in the public domain.
781
01:03:50,924 --> 01:03:55,484
So if anyone wants to translate it to Spanish and print it in Salvador, I'd love that.
782
01:03:55,484 --> 01:03:59,724
someone please do it and sell the books and earn some money that would be good yeah absolutely okay
783
01:03:59,724 --> 01:04:05,244
again i'll talk with some some of them bitcoiners that maybe we can do that because that'll i think
784
01:04:05,244 --> 01:04:11,744
you know what that bitcoin knowledge in spanish is lacking a lot and we're trying to push to have
785
01:04:11,744 --> 01:04:17,064
more content on that so yeah that would be super good to have it in spanish absolutely so thank
786
01:04:17,064 --> 01:04:22,944
it's a thanks for that and yeah i think that's it so guys as usual see you next week ciao thanks
787
01:04:22,944 --> 01:04:23,864
Thank you very much.