On The Brink with Castle Island - Izabella Kaminska (The Blind Spot) on Reconsidering Bitcoin Skepticism (EP.297)

Episode Date: March 14, 2022

Former FT Alphaville Editor and founder of The Blind Spot, Izabella Kaminska joins the show. In this episode:  Izabella's pre-FT career Izabella's Polish ancestry and how that informed her monetary worldview Why Izabella was a skeptic about Bitcoin – and why she revisited her stance Izabella's interest in anacyclosis and cyclicality in political systems Jeremy Bentham and his views on utilitarianism Consequentialism and its influence on contemporary elite ideology What Covid-19 policies revealed about freedoms in the West The flaws inherent in bureaucracy Izabella's changing view on the politicization of finance The failure of AML/KYC rules in the West Reflections on the FT's Wirecard story Izabella's view on stablecoins and why she first compared them to Eurodollars Why stablecoins are mini central banks The paradoxes of Web3 and DeFi and the veil of decentralization Do crypto systems end up inherently recentralizing Why Central Banking is so obscure and difficult to penetrate Bitcoin narratives in the context of Bitcoin's apparent failure to be a real rates hedge Is gold genuinely a good inflation hedge? Are there Bitcoiners Izy pays attention to? Izabella's thoughts on Bitcoin ESG questions Is Bitcoin security worth paying for? Why Izabella is leaving the FT and starting the Blind Spot Learn about The Blind Spot and follow Izabella on twitter. Sponsor notes:  Compass Mining is the world's first and largest online marketplace for bitcoin mining hardware, hosting, and ASIC reselling. Start mining your own bitcoin by visiting compassmining.io

Hello and welcome to On the Brink. I'm Nick Carter. Today we sit down with Isabella Kaminska, formerly at F.T. Alphaville. She had an exceptional tenure there, and she is now the founder of the blind spot. She's left the FT. I followed Isabella for a long time. She previously was a very strident critic of Bitcoin and the cryptospace. And of late, she's moderated her tone, and I wanted to talk with her about it and see how and why she'd evolved her thinking a little bit. We cover a huge amount in this episode. It's a fascinating look at her worldview and why she reasons the way she does. I'm really, really happy I was able to get Isabella on the show. We had a great conversation. Let's dive right into it. I'm here with Isabella Kaminska, formerly of the Financial Times,

currently in the process of leaving, actually, but known to many as the editor of Elphaville and really, I would say, one of the most sort of striding critics of the crypto industry. Maybe she's come around on a few issues, but certainly historically, one of the, I think, the sharper critics, frankly. So thank you so much for joining us today. Thanks for having me. So I don't even know where to start. There's just so much. So I'll admit, you know, you definitely, you know, triggered me a few times over the years, for sure. But I like to think that I always, you know,

respected your analysis despite being moderately ticked off with some of your takes. But, but, you know, I think your reputation is as a critic, not just of, you know, the nonsense in crypto, but sort of just in the financial space more generally. And I think, you know, there's been a ton of value in the Alphaville blogs. But, you know, I actually wanted to ask you about your pre-FT career, like how you got to where you are and, and, you know, what you, What led you to that? Oh, that's an interesting question. I haven't had that one for a while.

So I was one of those people who, so I didn't really know what I wanted to do. So I went to, I studied ancient history, mainly because I was really interested in it. I had no idea what I wanted to do for a career. At one point, I thought I would be a police officer. Another time I thought I would be, I wanted to be a spy, actually, but that didn't really work out. Yeah, I sent off an application and got told that I'm Polish. No, thank you. But anyway.

So then I thought, well, journalism sounds really good. It's sort of the history of, you know, history tomorrow is today's journalism, right? So I did a LCP Masters in Journalism and then from then on, like any other struggling wannabe reporter, I had to really kind of find somewhere to start. And I started off on these English language newspapers in funny places like, well, Poland was one of them. and another one was Azerbaijan. When I was there, I did a lot of traveling in that area. So I was always fascinated with how the system works,

and I wanted to understand the role of commodities and resources, which is why I ended up in sort of the Caspian area, because at that time it was being developed, a lot of oil infrastructure was being developed there. And that always fascinated me. And from there, I mean, having earned not very much money doing that, I was struggling for money. So I ended up working for BP in a non-journalistic capacity, but I thought it would be quite interesting to see things from the inside. And when I was in

Azerbaijan, BP was the biggest corporate in town, and it was very alluring to go and work there. So I worked there for about a year on their internal magazine, but it wasn't really for me because I wasn't fundamentally a PR internal comms person. So I left, I got onto the Royal graduate trainee program. And then, sadly, that only lasted a year. They didn't want me at the end of it. So I ended up at CNBC, well, via Platts, I went to CNBC, where I was a producer for about three years on their morning show,

squawk box. And that was a really interesting experience. This was before the financial crisis. So I got to really see the other side of CNBC. before anyone really knew about central banking. And I remember very, you know, I was always a geek. I was really interested in market structure and how it worked, which is why I had an affinity to crypto, actually,

because I was always about that part of, you know, I just wanted to know how markets work, how financial infrastructure works. And I remember how like when the 2008 crisis happened and we started having all these central bank interventions and no one at CNBC was really ready for it because all that sort of nitty gritty had been completely forgotten about and taken for granted as working no matter what.

And I thought that was quite interesting. And then I went to the FT where I was working for Alphabet for many years before I was made editor in just end of 2017. And the rest, as they say, is history. So that's my bio. Did you grow up in Poland or did you grow up in the UK? I grew up in the UK. I was born here.

but my parents were first generation immigrants and I grew up in a completely sort of Polish atmosphere they spoke Polish at home and I would go back to Poland almost every summer for very long periods of time so even though I was born here I was very much connected to the Polish community and it was a Polish upbringing so much so that when I went to my first day at school I I didn't speak any English so my first language was Polish and I had to learn English from school so that was my background wow you know I spent three years in Poland actually when I was younger and I lived in I lived in Warsaw from 2001 to 2004 yeah it was a formative experience of my life yeah it was pretty tough we may have overlapped I was in Poland from around 2001 excuse me 2001 at the Warsaw

Business Journal yeah so I was there just after two 2001, between 2002, 2003. Well, yeah, we were physically there at the same time. I was, you know, about 10 years old at the time. So we wouldn't have intersected professionally. But I went to the French school in Warsaw. So it was fascinating. It was funny.

It didn't really fit in. But do you feel that having that connection of Poland and presumably you're sort of more aware of the Eastern Europe, you know, inflation issues after the dissolution of the Soviet Union. Did that sort of inform your perspective on the world at all? I think growing up in the UK, I always was sort of confused as to my identity because in England, I felt very Polish. In Poland, when I would go there, my Polish wasn't perfect.

So I felt like an English person in Poland. So I felt sort of homeless in some ways, like in terms of. of where do I belong. But even so, I think Polish culture is so strong that your parents tell you these stories. And of course, I lived through the 80s and I lived, I was in Poland during martial law and I lived through all those horrific periods. And my parents were always working with Poland and my dad actually was in payments, believe it or not, doing remittance payments to Poland during communism. And my mother was working in the printing trade. selling printing plates to share newspapers.

And so we were always in and out of Poland. So I felt, you know, I grew up, I absorbed it all by osmosis. And then, of course, like any teenager, I rebelled against my parents. I went through a whole phase of like, oh, I hate Poland. The Poland's really, not hate Poland, but like, I don't need it. What rubbish, you know, of all the languages I could speak. Why do I speak Polish? It's so useless. You know, I didn't really have a, I didn't.

really think of Poland as being advantageous to me in a career, I was incredibly sort of Western oriented. And it's only really in the last, you know, six years or so that I think my Polish heritage has really come to its, you know, I've really started to appreciate it and what I learned without really realizing it at the time. And all the, you know, my parents would be telling me all these things. And as like any, any kind of arrogant teenager type, you're like, yeah, dad, whatever. And then you're like, oh, actually he had a point. He had a point about all these things, you know. So that's how I see my Polish heritage.

Do you think that, you know, on other podcasts, you sort of maintain some skepticism about, you know, like, you know, certain ESG narratives, things like that, you know, these beliefs, which are very institutionalized among sort of, you know, your commentary at class in the West. Is that, you know, would you say that's, you have a slightly more heterodox view, because of your distinct upbringing or?

I think definitely. I think having that muscle memory of what communism was like and knowing how bad it was and knowing how painful it was and how much effort your family went to to try and escape it and how excited they were when things were collapsing and Western sort of capitalism was coming in. I think that has really informed me. And certainly, you know, one of the reasons I was a skeptic about Bitcoin is because I never thought that what happened in Poland would be conceivable in the West.

I never thought we would have these issues of centralization. And I was, I think I can say now that I have, I was naive. I mean, obviously monopolies have always existed. but I've always had a sort of intrinsic faith in Western democracy because maybe because of the fact that I was Polish. So the West was seen as this incredibly, you know, well, it was seen as the place that defended freedom. The reason I was so critical of Bitcoin in the beginning

is that I had an intrinsic faith that the system in the West was, it had enough checks and balances to ensure what happened in, Poland wouldn't happen in this area. Like that's really what I thought. Bitcoin to me made sense in a world where you didn't have all the other kind of like checks and balances. But that wasn't the West. And then, you know, and if in terms of how it would be applied to emerging markets, yes, I think I was always a little bit more open-minded to Bitcoin being used in an emerging,

emerging markets. But even then, I always thought, well, a superior alternative, if you're living in a sort of dysfunctional state, is using the dollar or some alternative currency from a functional state, right? And I guess what's changed is that I now, this is going to sound incredibly silly. It's not that I think we're at the point where democracy is collapsing, but I see problems in the model that I didn't see before. also an ancient historian. So one of my other passions is actually something called Anasiclosus and the idea of continuously evolving political systems. I'm a director on this nonprofit called the Anasiclosis Institute. And it basically preaches the philosophy of Polybius, which is that political systems are always changing. They're always moving from like a,

well, the classic cycle is one way where you have a benign, sovereign or monarch and then he gets corrupted and it's taken over by a benign oligarchy they're corrupted they become a sort of corrupt oligarchy and then there's a mass sort of democracy or you know a good form of mass rule and then it descends into anarchy creating the circumstances to um to allow for a benign or you know, strong leader type. And the idea in Polybius' model is that democracy came along and synthesized effectively that cycle in a controlled way. So you wouldn't have to go through these disruptive flows from one state to the other. And he was like a, you know, he based this

model on just looking at what was, you know, the history that was accessible to him and just recognizing that these patterns repeated over and over again. And if you could just control them, in a way that, you know, you didn't suppress them, but you just did it in a controlled way, then the system would effectively maintain its equilibrium. And so I've always been fascinating stuff like that. And I thought the Western system was, you know, had sorted it essentially. But I was, I think these days, both from a corporate level

and from a political level, in part because of how, things are funded is that we cannot take that for granted anymore. And that's my big sort of transition point in terms of how I think about things. Wow, that is an answer I didn't expect, actually. I like to ask questions that I know the answer to out of time. And I sort of had an inkling, but I didn't. What did you say the discipline was called? It's called anisytosis. And it's, I mean, it's a very old school. I mean, the more, A variety of it or a sort of other school of similar school of thought is through sort of Plato's Republic and the idea of the philosopher king and how that model is the ideal form of government if you can ensure the king is not corrupted, right? But the intrinsic message is that all political systems fall because everything gets corrupted in the end.

And you always have to transition to the next step. and the wheel is sort of continuously flowing. And stability is borne out of controlling these cycles, or at least trying to limit the transitions so that they're not as disruptive as they could be. This kind of sounds somewhat conceptually similar to like this idea that a lot of sort of crypto people subscribe to like the fourth turning and like Peter Turchin's ideas. I think he put a fancy name on his theories as well, that there's like a generational long-term cyclic trend and basically every 80 years or whatever, a society like undergoes a sort of

very tough sort of reset or period of strife or something like that. Yeah, exactly. I mean, that's a modern incarnation of Polybius in some ways. I mean, Polybius is the founding. He's the main sort of historical resource. that really mapped it all out and figured out how the cycle would work. And then I think from there, there are all sorts of derivatives that made me unconsciously influenced by him as well. So I kind of went to source, really.

But yeah, the fourth turn turning and the other concepts, even to some degree, acceleration, as I know that's incredibly controversial. They have a sort of nod to Bolibius in some ways. And I mean, my interest in anisiclosis goes back to when I was at school. So it's 40 years or not for 35 years or so of curiosity about these cycles. And so I've been a member of the, you know, even I think I was, I think I joined the Anasiclosis Institute before Bitcoin. I started writing about Bitcoin.

So it predates that. But I never, I never really connected the two the way I am now, if that makes sense. Where did you go to school? I went to a, like, primary school, I went to a convent school in, where I'm from in London, West London. So I went to really bad convent school. I mean, it wasn't very good. The nuns were, we're not very keen on teaching of science. So when I, when my parents realized that I wasn't very informed on that matter, I had to change schools.

And I went to a school called Godolphin and Latina when I was 14, which was, very academic compared to my other school. And then I went to university. I did an art foundation degree at Chelsea and because I had this kind of creative side as well. And then I did my bachelor's in ancient history in the University of College London, which is the home of Jeremy Bentham,

the guy who came up with the panopticon theory. And then I did a master's in journalism in about what was then the London School of Printing, which doesn't exist anymore, but it's part of the London Institute. So that's my academic grounding. My biggest claim to fame is that Carrie, Boris Johnson's wife went to my school.

There you go. Mine, I went to St. Andrews, and so I have that, but with Kate Middleton, it's very exciting. So Jeremy Bontan... She must have been your... We weren't concerned. I missed her by a few years, unfortunately.

She just turned 40, didn't she? Yeah, and I wouldn't have been cool enough to date her when I was there. Bentham, his corpse is still sort of, you know, like immortalized. Is it at UCL, or it's like somewhere in a glass case, right? Last I checked it was there. I have a video of me standing outside it on my graduation day. But, yeah, his corpse is in this glass case. And every now and then, like it used to be a, you know, like in, I guess it happens in America,

a lot of these sort of pranks that the students play, they would wheel him out and, like, do terrible things to him. So Bentham obviously also sort of like one of the founding fathers of, I guess, utilitarianism or consequentialism. The phrase that sticks in my memory, so I did philosophy at school, it was his falsific calculus, if I remember, which was the idea, of course, that you could sort of quantify units of goodness or happiness. And I think, you know, it gave rise to Mills, you know, maybe better version of consequentialism. But I kind of find that there's this view among elites today, that, you know, this tinkering ideology that you can sort of maximize the units of goodness in society. if we can just give them, you know, all the power and the control, and they'll just figure it out for us.

So I have a bone to pick with Jeremy Bentham, I think. Yeah, me too, to be honest. I mean, he's kind of the man who brought us the surveillance state. All right, right. So that's actually, yeah, so you actually answered my next question, which was, you know, one of the things you evolved on it. And so with regards to sort of institutional failure in the West, Like was there a moment where you thought yourself, oh, you know, with this regime is collapsing or, you know, the American state, you know, or maybe even broadening that to England because, you know, I see them as probably part of the same apparatus really in terms of sort of the values, the leadership and the things they espoused?

Like was there a moment in the last few years where like, oh, this is unsustainable, they're sort of out of step with what people want? and, you know, we need safeguards against, against what's happening here. Yeah, I mean, I think the pandemic really was the moment that I, I just never thought that we would, I mean, it's incredibly controversial because I know that even now lockdowns are seen as justified and morally good, but there was something about the lockdown mentality that really scared me. me about the power, how quickly it is, how quickly it is possible to kind of turn people's perceptions if you have the right, right message, right? And how keen people can be to let go

over their freedoms and their civil liberties. And I appreciate that this was in theory, in the name, well, not in theory, in practice, it was in the name of like a greater good, right? but I felt I just I wasn't convinced that this was going to be I just thought it was very knee-jerk I thought it wasn't very constitutional and I'm concerned about the powers we've given up and whether we will ever get them back again and it's very easy to do things in an emergency way

let's like with post you know 9-11 and the Homeland Security, that's the best equivalent is that we gave up all these powers, all these, yeah, I guess all these freedoms and we've never really got them back. I remember back in the day, you know, how easy it was to get on planes and, you know, ID cards, whatever. It was a completely different world. And I guess it was done in the name of X or Y, but it becomes a permanent thing and it never gets. goes away. And what does that mean? What does it mean? Why do we have to have these things whereas we didn't before? Is it symptomatic of a malaise? Is it symptomatic of a fetus? Is it symptomatic of a fetid? We have less trust in our society? What does it mean? And I think it's indicative

of some sort of structural issue because if the pathway forward is always going to be about more security and less risk tolerance, then I can't really foresee any future where freedom can be maximised because the two are, like freedom comes with risk. That is just the sheer reality of it. And if you don't have the right to do something wrong, you have no freedom. And in an ideal world, you use that freedom responsibly and you don't do the bad thing that's bad. for your neighbours, but it's on an opt-in basis, not on a, not on the other kind of, not on a coercive or limited way. We should be, we should be doing these things or taking these sacrifices voluntarily, not because they're mandated. And I think that is the really big difference.

Everything is being done in our protection, in the name of our protection. And that's good and just, and I get why that happens. And definitely we have a duty to our, fellow man and I'm very pro-community but I also think that the mass centralisation that that facilitates is dangerous especially because as as the system grows larger the system gets more and more detached from the needs of local communities who are not one-size-fits-all and you know the analogy i've always made is with gosplan because gosplan was supposed to be this idealized system that was going to ensure that capital was allocated in the most perfect way that the system would never be, you know, people would always, they'd want for nothing. But it didn't turn

out that way because actually I think the nodes that we are, like the human, human nodes are much more complex. And we don't always signal what we really mean and using, you know, it's just complex, basically. It's silly to think that we can centralize everything. and satisfy everyone's desires. And who knows? Who knows what it means? Like some desires shouldn't necessarily be satisfied, but then others have to be,

who is to judge what desires are good and bad? Because they all depend on context. So something that is good in one situation is bad in another situation. I think we've locked down the moment that really upset me the most was when I was on the street and it was right in the beginning in March where I was with what was then my two-year-old. And my two-year-old was like running into the street because she's crazy.

And this old couple, like I mean not even old, like in their 60s, they just, she was running into the street. And they, because of everything that had been propagated, just steps aside and were too scared to try and stop her. from running into the street. So like the risk assessment in that situation was insane. That's insane. And I'm like, you know, her running into the road equals certain death for a young person, like a two-year-old,

them intervening to stop her, like the risk, I mean, the chances of them getting corona and dying from, it's just like, that's unreal. Terrible. And I think that was the moment that I realized that we can,

like there was a massive breakdown in our understanding of risk and return. And yeah. No, it does. I know you're not going to find any, any dissent here. I mean, that's such a, that case study is such a pure sort of a pure demonstration of sort of of how untethered people's perceptions of risk are, that it feels like something that you'd come across actually in like a, you know, a Peter Singer paper, like a like a, like a like a philosophical thought experiment almost.

Yeah, like the train, where you have the lever and you don't know which one to do. Yeah. The shopping trolley, I can't remember what it is. The one that they always use in consequentialism is the drowning child in the pond idea, and they use that to talk about moral obligation. But yeah, that's incredible. So with regards to sort of like monetary, you know, life rafts, So, you know, like institutional failure manifests in a few ways.

One is that you get this sort of technocratic authoritarianism, which demands insight and control of all, you know, corners of society, including sort of the architecture of finance. Like, obviously that is, is what ESG is an attempt to sort of politicize finance and determine what's permissible and what's not permissible in terms of, you know, what sectors can get. get capital and what sectors are start of capital. And so, you know, having a payment system and a financial system that's sort of independent at that, you know, that might be one thing that, you know, has merit. And then there's also the notion of a monetary system that, you know, is non-discretionary. And, you know, you can't have these trillion dollar, you know, inflationary, you know, stimulus packages. And so, you know, Bitcoin sort of tackles, both. I'm not going to say Bitcoin fixes this, but was either one of those things that appealed to you

more in the context of this sort of realization you had? So I think, yes, technocrats in charge of systems and certainly sort of unchecked power amongst bureaucrats is very worrying to me. I think bureaucracy is incredibly costly to the system, and it creates a sort of ask covering mentality that ensures terrible feedback loops start to occur. Everyone is just focused on ass covering, right? And sorry to use such a gratuitous term. Nobody wants to take responsibility for decisions. That's why bureaucracy exists.

It's about actually outsourcing any responsibility to a system. So you can say it wasn't my fault. It was the system, like, you know, blah, blah, blah. And I think that's very dangerous for society. And I think the other thing that really, from a monetary perspective, I, it's the relationship between money and power and politics that I think I've come to realize is also under stress in our system. Because what really crystallized that I did in my head was

just the power of like YouTube to demonetize content creators, you know, and I know this is also controversial, you know, the idea whether they are rightly platformed or not is incredibly controversial. Now personally, I'm a student of journalism, I'm a student of propaganda, actually. A consistent element in all my studies from the day I started further education has been propaganda because in art, when I did my art degree, I was interested in, in the studies. of artistic sort of propaganda in the Renaissance period. And then when I did ancient history, I studied Augustus, who was a champion in propaganda and one of the earliest sort of innovators in that space.

And then when I was at Chelsea, when I was at LCP, I studied sort of like how information was controlled during the Falklands War. And I did my dissertation on how the media handled, anti-capitalist protests, which at the time were the big thing, and whether there was a certain bias by the institutional press. So propaganda has always been of interest to me. I was a big fan of Noam Chomsky's manufacturing consent, you know. And I think this is where it relates to money, is that you've got people speaking their opinions. If you start to shut down, even if you don't like them, the market can only clear, like, market is an information clearing

zone, right? So if you are in the market and you are not paying attention to like 20%, 30%, 40% of the, like, of the audience, because you think their views are not relevant, you're going to be really bad at assessing market prices because you're basically disenfranchising all these people. And whether you like their politics or not is irrelevant because whatever their politics, they think, still need to buy two-faced and they still need to eat and they still need to they still consume resources right so um just ignoring those people isn't going to like change anything um but what they say has a direct impact on how markets clear um and what might go up in the future and what might not so if you are trying to be in the you know trying to operate as a financial investor or

whatever, if you're ignoring signals from like 40% of the of the population, you're going to be really bad at investing. You're going to be really bad at allocating capital because you're not going to be essentially even misallocating to resources you think they're going to like what they don't like because you're not listening to them. Or you're going, in which case you're repressing them and you're creating a repressive non-capitalistic market. Or you're going to be incredibly bad at allocating capital and you'll lose money in the long run. So either way, it's not a nice, it's not a good situation. So yeah, so I drifted off a little bit, but the point is when people get demonetized

from YouTube, I found it really interesting that some of the conditions are related to whether or not they can then, so whether they can then go on to other alternative sources. I think one of the, I can't remember the early, in the early days, people were going to, before Patreon, there was another one, sort of an S, anyway, doesn't matter. It was, it really mattered whether you had access to PayPal or to whatever payment process, right? And at that point, it was the processes who determined whether or not you would be able to get funding. And I thought that was pretty insane, because the way, as far as I understood it, maybe I, I, I, I haven't looked at this recently, so I apologize if I've misunderstood.

But from what I could see, like, whether or not you were entitled to services like PayPal or any financial provider, and whether you met AML and all these other conditions, was related in some parts, whether you were considered a terrorist threat or not. And frankly, that scares me the most because it's such a subjective perspective, what is and isn't a terrorist. And that might sound like an extreme thing to say. But it really is true that one man's freedom fighter is another man's terrorist. So like in, you know, in Poland, my parents would have been considered terrorist

because they were threatening the system. They were pushing propaganda, you know, radio free Europe and whatever. Like they were terrorists as far as the state was concerned, right? Over in the West, they were heroes. They were freedom fighters. It's all a matter of perspective, is my point. So if people's access to the monetary system is determined by whether they are considered to be terrorists or not, yes, of course, we've been conditioned to think, well, terrorists are like, you know, people who blow buildings up and are really, really bad. But I think it's such a great area that it can be abused.

And the beauty of Bitcoin, I guess, is that it is, it's neutral. And it's not going to differentiate. It's going to, well, not these days. There are complexities, obviously, because there's been a lot of centralization. But I think in theory, if it works how it's intended to work, which is that it maintains access to funding on a neutral basis, money should be neutral. I think that's really, really important because you can't, if you can't donate to a political party, because if you live in an oppressive state, you have to fund the resistance against any totalitarian system.

And if you can't access cash, and because your money is no good here, well, then you can't really rally a resistance. You can't rally any challenge to the system. And that is really bad because any system needs challenging. It always corrupts unless it is continuously challenged. That was a really big round. Sorry. No, I mean, I think it's a fantastic point. And frankly, it's not just, you know, the division of who's platformed and who has access to financial services.

Even in the U.S., you know, a place where people take, you know, free speech and things like that very seriously. It's not just the boundary is not, you know, people that are considered terrorist versus not. It's, you know, sex workers. It's, you know, any entity for the payment processors deem remotely risky. And, you know, they don't call it de-platforming anymore. They call it de-risking, which is my favorite euphemism. It's a great euphemism. I mean, it's, and the irony is, despite all this AML, despite all these KYC rules, nothing has changed.

The corruption is still there. None of this has helped, like, the Tory party not have, like, secret parties when they're telling the rest of the world that they can't go out, right? Nothing stops. The corruption is at the source point, right? And so if you have the power to corrupt and the people who allow you entry in and out of that system, well, nothing changes. And real power is still, you know, is still a function of access to core resources. And that's why I think a lot of this KYC-A-M-L stuff is just theater. It's not really tackling the inherent problem in society, which is corruption.

That's my big epiphany. Yeah, I mean, you know, it consumes a ton of resources. It's difficult to quantify what the drag-on society is from compliance. But it doesn't stop money laundering, that's for sure. I mean, look at the – we covered wire card, right? And Wife was a fascinating story because no one believed Dan, my colleague, when he was saying, when he was scrutinizing the accounts and he could see that there was a bad, you know, big hole there and certain, you know, practices that were clearly disguising bad practice. And they did all these like sciops and media tricks on us and they tried to turn Dan into the villain and, you know, psychologically kind of. of draining him and threatening him so that he would back off the story.

And the system backed wirecard. The system like decided that wire card were the good guys and really the it was awfully close that that story wasn't nailed. And then and then luckily finally the truth came out because the truth does eventually always come out because it has to square, things have to square. And I always think of it, like, if, you know, I'm, it's like with Big Brother or whatever, do you have that show, right? Like, whoever's the schema eventually gets caught out because he's playing the two sides off against each other.

And eventually his lies catch up with, catch up on him because he can't be in two places at the same time. So the lies always eventually do get exposed, but it can take a while. And Wirecard, I think it was just a really excellent example of this fact that even though they were compliant on all the AML and all the KYC, there was still massive fraud. Right. Yeah. So earlier you mentioned marshaling resistance with financial resources and the fact that it's impossible if, you know, finance and payments are, you know,

centrally controlled. One of the most interesting case studies I saw recently was, I don't know if you followed this, but the shadow government in Myanmar, that was recently deposed in the coup. They started raising capital with tether, with the stable coin tether. Did you, so yeah, this is a new thing that happened recently. So, and they actually declared it the official currency,

although I guess they don't really have the power physically to determine what's official and what's not, because they're not in power. But effectively, they granted official stuff granted official status the extent they can. And then actually at the same time, the government that's actually in charge in Myanmar was de-dollarizing and they were starting to use yuan instead for their cross-border trade. So it's kind of two interesting dynamics happening the same time.

So stable coins, they inject some impurity into this because on the one hand, people want to use stable coins to transact online more so than crypto currencies themselves, right? So if you just look at the data, stablecoins have a very high velocity, very high turnover. They're sort of increasing with the preferred medium of exchange in the crypto space on blockchains. And crypto assets like Bitcoin and Ethereum are less used transactionally. And so sort of I think there's a world in which stable coins also satisfy you. desire for transactional openness and removing political gating factors from who has access to transactions. But at the same time, you know, you've been reporting on stable coins longer than

probably almost anyone. They also have holes in them and they have their liabilities of the issuer. So I guess, you know, there's $150 billion dollars to stable coins exist today. I'm curious to get your sort of current views on them and whether you're not. think they're sustainable, especially because, you know, Tether, I think is like over $60 billion now and it has such a checkered history. I mean, the truth is that stable coins are a central point of failure in the system, for sure, in the crypto system, because they undo the decentralization. They de facto centralize all these assets in one area.

And you have to trust the entity that is the custodian of those assets that is issuing them. They, you know, I've written about this before, but they really remind me of us, you know, they're a cross between a money market fund and the euro dollar system to some degree. And they serve, they obviously cater to demand. There is demand out there for these stabilization mechanisms. But they're like mini central banks in that sense, except that the zones that they are influencing are not geographically kind of, marked out as much as sort of whatever like brand focus right so um but essentially they operate like little mini central banks and they have their you know they're like the old idea of a

of of there was a name for it like a goldsmith bank but essentially this is there is a period in history where central banks were essentially fully collateralized and that is um like a currency board like a currency board but there was also another model it was like in amsterdam um the um hionson shin from the b is wrote about it and i've temporarily forgotten about it but it was um exactly that was like a um it was like a fully collateralized uh central bank that that in theory was incredibly stable until it wasn't and then suddenly when it wasn't it was really bad so all these things um have merits and demerits. I think with Teva, you know, again, part of the problem is that the suspicion of the market towards its product has kind of catalyzed its inability to service things

honourably. Like they may have had honorable intentions from the beginning, but because they were unbanked and because they had to like, you know, even if they had honorable intentions, it's hard to maintain, you know, that sort of level of transparency and commitment to your, you know, core promise that everything is back one to one, if you have nowhere to keep the assets because no one will bank you, right? So in some ways, we didn't give them a chance to prove that they were honest and credible, right? From the beginning, they were immediately seen as a weak point in the system. And of course, I understand and sympathize with that idea because there is an irony, Bitcoin came to decentralize everything and then, you know, there is a continuing market for

centralized risk minimizes, so to speak. So I think it's a natural organic, continuous evolution of the system. And I don't think we're ever going to really resolve it. because if you decentralize, the more you decentralize, the more you create a market for middlemen who can cut through the division of labor issue that decentralization creates. Because, you know, I compare it to, you know, the founding of America. Like people went to America. There was Land of the Brave. And it was hard work.

Like, yeah, you were free, but it was hard work. And it was a question of whether you had the Cajonis, so to be able to, to survive in that sort of brutal landscape, but the upside was that you were free. But of course, lots of people want protection and they want to know that they're safe and they don't realize that if you just through,

I mean, it's a division of labor thing. You can't do everything yourself. You have to trust other people at some point. It's very hard to synthesize that. So you will always, one will always breathe the other. But then maybe the solution is more about understanding like a la cyclosis,

that these power balances will continuously, like power transitions from decentralized to centralize will be continuously flowing through the system. And as long as we understand that that is a continuous cycle, which is all about cyclical theory in finance, I guess, then we can manage it. And we can just make sure that when it flips from one side to the other, you know, it's not too destabilizing.

So, yeah, So Teva is a problem in the sense that it has a lot of central, centralized risk in it. But if it's a known problem and we're transparent about it and we can price it into the market, then in theory we can hopefully, you know, absorb any risk that emanates from it. Transparency is really important, I think. But transparency is not the same as like surveillance, but that's just another. This episode is brought to you by Compass Mining. Compass Mining is the world's first and largest online marketplace for Bitcoin mining hardware hosting

and ASIC reselling. Bitcoin mining is only getting bigger and so is Compass mining. Compass is adding 280 megawatts worth of hosting capacity next year with more to come. That's over six times Compass's current hosting capacity, meaning more people can mine Bitcoin. With Compass anyone can mine Bitcoin. Start mining your own Bitcoin by visiting compass mining.companing.com. today. There's kind of this strain of thought recently, which is that I don't know if you read Maxi, Marlin Spikes thoughts on Web 3. He's the founder of Signal. Yes, I did. I did read. Yeah, I did read that. And it, you know, his basically view was that sort of there's this inherent paradox, which actually kind of similar to my conclusion for that paper that I wrote with

Linda Jang on Defi, if you remember that one, which was that, you know, there's like very deep-seated paradoxes and a lot of this stuff whereby, you know, there's this language and, you know, a theater of decentralization, but sort of inherently there's a trend back towards centralization almost immediately, you know, it's not like there's like a golden era of decentralization with these crypto tools. And, and then it, you know, kind of gets co-opted and captured. It's like there's actually, Maxi's views that there's something inherent about the nature of being a, you know, end user on the internet, trying to use Web3 services and being funneled back into these centralized patterns. And, and, you know, my view of, in that paper on

defy was like, there's, you know, there's, there's this, this inherent need to re-centralize for sort of a variety of reasons. Like, what's your sort of level of opposite? optimism around our ability to build sort of enduring structures that avoid decentralization concerns because like in the example of stable coins, they're so ubiquitous now that I don't see us sort of doing away with them and going back to this world where we're just using, you know, Bitcoin for transactions. I mean, I think I think that paper was really good. I think it was, I think it is intrinsic.

I think there is an inherent tendency. it all comes down to anisiclosis, which is also like it's the political theory of centralization and decentralization. It's the same thing in politics as you see in finance in this case. And it's basically the key issue is that things get corrupted. And as they get corrupted, the system wants to flow to protection mechanisms. So, you know, if you have a decentralized system, that's all very well. Everyone's having a great time. Everyone can be their own bank. But then they get conned and they get hurt and they realize that maybe they weren't as, you know, as smart as they could have been and they realize they need to outsource some of the decision making because their day job can't just be watching the internet and figuring out what's a scam or not all day long, right? So it's a question of division of labour. Like eventually it became, comes when you make enough money from your decentralized existence, you want to pay other people to do some of that stuff for you. And then you always, you know, transfer trust via that mechanism.

I don't, I don't think you can get away with it. But I think, I mean, I don't really have the answer. I just think, I think this is, it's always going to be that way. One idea I have had is that regulation, we see regulation as a constant. We see it as a concrete concept. Definitely post-2008, there was a sort of perspective that we, you know, deregulation had led to terrible things, too much risk accumulated in all these areas. People were taking advantage of each other. The banks, you know, obviously colluded and took advantage of people, blah, blah, blah. And so we needed to protect the system. now we've moved the other way and there's just too much, so much regulation that the cost of doing business is impossible. And as a startup or an innovator, you know, you can't really

compete with the incumbents because the regulatory cost is so great. So how does that just ends up like consolidating power even more in like a handful of names and centralizing the system? So regulation at the moment is perceived to be as definitively good. Like we've come up with rulebook and it's the gold standard and we can't really change it. Whereas what I think might be the answer is treating regulation more like how we treat central banks, how central banks treat money, which is understanding that regulation has a duty to adjust itself relative to the context, relative to the amount of risk in the system. So when you see there's too much sort of excess,

because if you over-regulate, well, then you will breed a lot of bad practice in the shadowy markets, and you won't be able to control it, and there'll be a blow-up there eventually. Well, then that's time to deregulate and allow some of those sort of shadow operators to come into the light, right?

But when you under-regulate, and you see that there's too much froth in the system, then you change the rules again and you make it a little bit more difficult. So you're continuously adjusting the regulations. It isn't a single rulebook that says, this must always be the case. Well, no, there should be some exceptions.

And actually in the UK, I think the FCA and the BEOE have tried to be a little bit open-minded, which is why we do have a regime that sort of allows for concessions for startups and, you know, early stage companies, that come into fintech on that basis because they understand that there are different criteria for companies at different stages of their life cycle. But, you know, the thing that will really change things

is education and getting people who are just users more understand, we've got to get users to understand that, they need financial literacy themselves. And I think, I've argued this before, I think if Bitcoin has done anything, like super, like it's hard to like, even if you're a no-coin, like, maybe, even if you're the strictest no-coin,

I think you have to make the concession that the one thing that Bitcoin really has done is galvanize and encourage financial education. Like so many people have turned towards like understanding central banking and how money works because of Bitcoin. It's done an, like, yeah, sometimes they don't necessarily get it right and they go around, you know, different pathways.

But overall, it has stimulated so much interest in how much and how the system works. And that is really good. And that should be encouraged. And I think, you know, the no-coiners would say a little knowledge can be dangerous and certainly can be. But I think overall it's a good thing. Right. I think a lot of your peers in the sort of financial journalism surveys would sort of bemoan the, you know, the Bitcoinser attitudes on central banking as sort of like overly simplistic and grounded in, you know, all these fallacies about, you know, what causes inflation and things like that. But, you know, frankly, I don't think it's the fault of the Bitcoiners for having often primitive views on this stuff because my view is that monetary policy.

is so deliberately veiled and opaque and rendered inaccessible to even, you know, smart people who want to understand it. Yes, and so it's a journey. And you've got to start somewhere. And yes, when you're young and you're just getting into the space, you're going to make false assumptions. Definitely I did. I've learned as I go.

That's why society in general is supposed to value experience because of experience comes wisdom. And one of the issues I have had with Bitcoiners, to be frank, is that they are very critical of people with experience. And I think we just have to be a bit realistic and nuanced, which is, yes, old people in finance can be too set in their ways and they have vested interests to protect. But they also have experience and wisdom and understanding for why things like in the Chesterton's fence sent to be of the, of the, of, the situation why these things exist in the first base. And I was very much of that school for a very long time. It's like, well, you're trying to disrupt all this stuff, but there's the reason why we do it like this and blah, blah, blah. But it's about a balance. Essentially, what we need

is balance between the two worlds. You know, I had a similar epiphany. You know, I'm, I tend towards, you know, I'm not a libertarian. I'm not an extreme libertarian or anything. I tend towards the libertarian mindset on a lot of things, certainly on free speech and things like that. But a good example for me is the smoking ban in the UK because I was a social smoker for a long time. And when they announced the smoking ban, I was really angry.

I was like, who's the government to tell me what I should do, and blah, blah, blah. And I was incredibly anti the smoking ban. I found it a really intrusive sort of nanny state things for the government to do. But now, however many years, 10, 15 years on, I look back and I think, you know what, actually, I'm really better off for it.

I'm not smoking. I feel healthier. I like coming home and not smelling of cigarettes. And would I have quit the same way if that ban hadn't existed? And I think, no, probably not. I might still be smoking. And that's one of those things that you, at the time, you don't, you don't recognize that that bit of paternalism is doing something in your interest.

It's literally paternalism. It's the same sort of thing when you tell your child. You don't want that. Don't do that. It's going to hurt you. So that's why I'm not an extreme libertarian because there are times when you, in the moment, you just don't have the experience. You don't have the understanding.

And you have to trust someone. But that person you trust has, has to, if they compromise your trust, that's even worse. So I understand. I don't, you know, what am I saying? This is all very philosophical, but I guess you don't know what you want until much later sometimes.

You don't know what's good for you until much later. And, you know, with tattoos and all these things. I think monetary systems and understanding the monetary system, the kind of impulsiveness of the younger generations you get into Bitcoin and, you know, think they know everything. And I admire it because I think it's great that they're educating themselves and they're starting on that journey, but we can't assume it would be good if we all realize that we continuously learn through life. I certainly have.

And that's why I'm very happy to say on the record that my views on all this have evolved. Because I think that's the rational thing to be continuously educating yourself and evolving and trying to understand things as in when they apply to the correct content. context. Yeah, I mean, I think that's very praiseworthy. And I try to, I find myself humbled all the time. You know, I think you're right, though, especially with sort of newcomers to have an epiphany, you know, there's, you know, or get really deeply into a certain topic like Bitcoin. There's a tendency to be overconfident and to ascribe sort of monocausal explanation. to everything. So one thing I wanted to ask you about is actually just about narrative. So, you know, as you know,

Bitcoin has been like intellectually or rhetorically positioning Bitcoin is sort of a neo-gold type thing, like a gold-like asset, like a synthetic gold. And sort of maybe wishfully thinking or believing that it would be a rates hedge or an inflation hedge.

And then if you just look at what it has done, recently, financially speaking, the returns, it looks more like a Tesla or sort of like an arc style instrument, you know, just a long duration tech stock almost in terms of the way it's behaved. So, you know, even though we've had like the deepest real rate, negatively, the most negative real rates since, I want to say the 70s, at least in the U.S., do you think that given this, the fact that we have whatever it is, 7% inflation, very deep negative real rates, and Bitcoin is actually sold off. Does that dent sort of the core Bitcoin narrative? I mean, inflation and gold has a weird history anyway. So I always, you know, if you actually

look at the record of gold, it's not clear that it's a great inflation hedge. It really depends where you are, what, you know, how, how the context, you know, the political context of, you know, where you are, operates, et cetera. In a lot of inflationary periods, what happens is that people move to gold for store of value, but they're forced to cash it out, right? Because they're, so whereas in a non-inflationary period, you're going to be holding your gold and it's all very well,

you know, it's protecting your value in theory, but your cash is doing better than gold. in an inflationary period, even if gold is doing well, you're often forced to cash it out, right? Which means that it's always correcting for its valuation because there's a lot of, like with Bitcoin, you know, when you get a cash out, when there's Christmas often you see Bitcoin collapse because people are spending their money, right? So I think inflation is a, I'm not convinced it's an inflation hedge. I think it really depends on the context, the wealth context, the resources, the supply chain issues. Inflation itself is a mismatch between supply and demand of consumables versus like how many tokens there are. If you think of money as a rationing system, which is what I do,

inflation manifests when there aren't enough rations, when there are too many rations, so to speak, then there are goods to consume, right? But it can be supply-side-led or it can be demand-side-led. It's not always clear that it's from one or the other. So I think with Bitcoin, it really depends on the context. And I mean, now is a curious time. look at El Salvador. I haven't looked at this closely in the last week, so maybe you're more

informed about what's going on there. But I did see a story sort of saying that something about how they're, despite being Bitcoin-ized, whatever the term is, they are suffering a run on their bonds. So they don't have the capacity to turn that Bitcoin into enough value to be able to pay off their debts on that side of the fence. So it's not necessarily a panacea, right? So what is happening? Just out of curiosity because I haven't looked at it recently. Yeah, so they own some Bitcoin, but that's a relatively recent thing.

They've actually lost money on their Bitcoin position in the aggregate. and their yields went up a lot because basically creditors don't trust the government anymore. So Bitcoin actually caused their credit rating to fall. Right. So that's, yeah, that's what I was, that's this, I hadn't read it properly, but that's the headline that I did see. So I think that is an excellent example of how you can have unintended consequences in this space. And I think with, like with gold, it's not, it's, I'm always suspicious of anyone who says that gold is a great inflation hedge.

Because it can be very volatile. It really depends on the context of how much of a reserve anyone has in terms of actual consumables. And to what degree gold or Bitcoin can inflation hedge is also going to be a function of, how strong other currencies are. And there's always going to be a kind of beauty contest between all the different currencies. So, you know, competitive devaluation you had for ages. Bitcoin can't devalue.

But it can, you know, if people start cashing it out, all those wallets that were previously immobile, right? So you presume that value is just going to sit there, but suddenly it starts being cashed out. Well, then that creates a massive demand shock in the real economy because those tokens are suddenly moving and creating velocity. So then that pent up demand is a form of stealth inflation in the Bitcoin system. All these fundamentals have to be assessed.

It's very hard to figure out. I would just basically be cautious of making any sweeping statements either way. That's an answer I didn't expect, actually, was that you would not accept this framing of gold as an inflation hedge. I mean, one of the things they often say is, oh, well, look, like, however amount, like one try ounce still buys you. I think it's like they say, a good pair of shoes and a suit. Yeah, yeah, yeah, for the last 5,000 years or whatever, right?

Yeah. So, I don't know, I haven't checked that out per se, and I think maybe it reverts to mean, and I think over time maybe it does, but in the moments of stress in the system, you can't be sure you can get that like tailored suit. So it may revert to mean, but in there are, it's quite volatile,

whether it will eventually, you know, you can still be caught out is my point. Yeah, I happen to be looking at the BLS stats recently and actually men's formal wear was deflationary in 2020 for what it's worth.

Really? Because nobody went to work. Of course, yes. So people stop wearing suits and so I actually did buy a few. So they became more abundantly veiled. But yeah, now there are shortages. There's so many more things I want to ask you about, but I don't want to keep you on here for two hours.

No, I mean, well, I'm sorry that my connection was so rubbish. No, it's okay. It's just that, you know, you have a totally distinct perspective from big corners and, frankly, like most other, you know, commentators that cover the space. So actually maybe we'll ask you about that. So, so, you know, crypto people and like the press have this like very antagonistic relationship, right?

But there's like certain, you know, pundits and journalists that I really like, even though they really don't like Bitcoin. So is that the same for you? Like, are there people in the Bitcoin crypto space who's, opinions you respect, even though, you know, you might have been on the totally other side of the issue from them. Oh, yes. I think there's a lot of smart Bitcoiners. I respect a lot of, there's some really interesting ideas. I'm also coming around to Belaghi's perspective a little bit as well. I don't always agree with what he says, but I think it's a useful voice to have out there.

I really, you know, your own work has, I always think is very thoughtful and incredibly insightful. You know, the energy issue is, I think, the most controversial at the moment. And that's the one that's hard is to justify and argue in the media space because there is a knee-jerk kind of perspective. Well, Bitcoin's terrible for the environment. So I'm very interested in commentary and I forgot I forgot I forgot forgot his name. This is really, it's probably somebody else's you'll probably be, I think we were on the same podcast together when we're so you'll probably remember

better than me. This idea of subjectivity in terms of how energy is consumed and who has a right to determine what what is just energy consumption and what isn't. I think that's really important. And so I think the point that was made. made was, well, you know, we spend so much energy on the military, which in theory is kind of useless. Nobody really needs the military, apart from when you're being invaded. So in good times, you don't need the military. You only need it. It's like an insurance policy, right? And I think

that's how I've come to think of Bitcoin. Yes, it's expensive. It takes up a lot of energy. But A, perhaps that creates good incentives for, it creates a carrot, not just, a stick situation in terms of creating better energy systems that are maybe more sustainable because it really incentivizes people to go and find alternative cheap sources of energy. But I also think that it's worth it if it's there to kind of protect you in the worst times, well, it's energy that was actually worth spending. You just, you don't know it yet. You know, so it's entirely subjective.

Is security worth paying for is the big question? And some people will disagree. Some people will be entirely happy to, you know, forego any security on decentralized security, so to speak, because they trust the state, and therefore they think it's a waste of money. But I think, you know, my conclusion is that I, for one, think it's better that that system is there.

I mean, I'd rather have it there than not have it there. And, you know, you can't create a parachute when you're already out of the airplane, right? Yeah, that was going to be the last thing I asked you about was the energy question. So there's this hearing in the house in actually just under a week's time. So by the time this episode comes out, the hearing will have occurred. and they're all very concerned about it. But yeah, I think it is a question of whether you value the resource. Do you value the service that Bitcoin is rendering?

And what I found is very, frankly, I don't want to, you know, get on my soapbox, but I found a bit of an anglicentric view that you don't need alternatives to the dollar system. and so why would you bother paying for one? Why would you bother using real world resources? And there's this indignation from a lot of people. You know, how dare you use 150 terawatt hours a year for the system that we see no value in, no purpose in? But if you look, you know, you look globally,

you see where people actually use Bitcoin and cryptocurrencies. You know, your highest per capita penetration countries are not the West. It's actually like places like Nigeria and India and Vietnam, Colombia, Argentina, Turkey. You know, so that's one thing I try and reinforce, but a lot of people are not persuaded by that. Yeah, and I think, you know, in the long run, it is a question of subjectivity. Like, you're going to value the security of money much more so if you live in a you know distressed country which has an untrustworthy government than if you live in say Europe or Britain for sure and but that doesn't mean that um it's the old edge is like how does it go um the bigger you are the harder you fall

you know right so um in the UK. K or a mature market, in theory, we don't need that security. But then if things were to collapse, then we really, really need it. And then you understand why you have to spend so much energy on it, because the amount of processing that would have to happen to compensate for a collapse and say a fiat currency from the West is just on another level to a smaller emerging market. So there is this guest on the Oddlodz podcast one time, and I forget what her name was exactly, which is a great podcast, by the way. Oh, Tracy Allaway and Joe Wisenhall.

Yeah, yeah, it's my favorite, really, aside from this one. The guest said that you can statistically draw a relationship between central bankers, hawkishness or dovishness and their own personal, realized experience of inflation. And so the inflation they've actually endured or not over their lives affects their actual decision making. And I think there's like a big degree of that that is the case with like cryptocurrency versus, you know, sovereign currencies. It's like, in your experience, like you have firsthand experience of knowing what a weaker, possibly even hyperinflating currencies like, right? Like there was total currency collapse in the post-Soviet Union and then subsequent dollarization.

I think not to sort of psychoanalyze you, but do you think that that might be informing your perspective here as opposed to someone that has no experience whatsoever with with monetary instability. Yeah, I think certainly that is true. I think anyone who experienced that sort of environment is always going to have a bias towards the idea that it can happen again. I mean, you know, earlier on in my life,

I perhaps was, I muted that side of my experience, I guess. But I think now, certainly it's back with a vengeance and it will be informing my wider view. I mean, I was, but yeah, I know what you're saying about the central bank is, and there's definitely a pattern there. And I think that's one of the, you know, when I think of economics, I think most economics, you know, people agree on like 90% of the key stuff. Like, you know, there are some fundamental rules that all economists agree on.

And then it's 10% that is somewhat politicized. and is a function of their political perspective or their life experience that makes them completely disagree on different points, right? And yes, and that shows you the political and experience-based subjectivity in economics, which is why economics is the dismal science. It isn't the same sort of science as you would get, you know, in the core sciences. It is hugely dependent on the human perspective. And that is why, yeah, it's going to be, no one's ever going to agree, is my point.

We're always going to, because everyone has a different experience. And what's important to me is not necessarily important to you. But that's supposed to be a good thing. And in a market, you know, somewhere it's supposed to clear and if things work efficiently, then hopefully I get what's important for me. And as long as my, what's important to me doesn't clash or impose on what's important to you, then we can all coexist and be happy. But it's the absolutist mindset that usually is the risk in society.

And when you have an absolutist, you know, it's the old Star Wars adage. Only a Sith deals in absolutes. Exactly, although even saying that makes me a SIF because... Right. ...self. But you know what I mean. The system is evolving. I think competition is healthy.

I think we always need challenges. And I think we... But it's also the job of the incumbents and the existing system to scrutinize challenges. because challenges, as we've discussed, can come from a good place or a bad place. And that's why I, you know, did all that sort of criticism and why, I think, like in the scientific method, you have a duty to really scrutinize things. But you know what? When there's a concession, you also, where you can see there's a merit, you have to make a

concession. You have to eventually evolve your position. It's like a peer review process. So good journalists, I think, you know, their duty is to scrutinize things, but it's also to give credit where it's due and maybe not get too tied up in their own reputational legacy. Like you should be able to say, well, no, I was wrong about this if indeed the thing you were criticizing turns out to withstand your critique, right? So I think that's really important. And journalism works best when, you're not. You know, people can debate and when people can challenge each other and there's no taboo or ostracization or any form of kind of negative consequence from challenging the status quo and that means both ways that means you know challenging challenges and challenging challenging the challenges and challenging the status quo like everything needs to be challenged but it also needs to be

as good or bad eventually. And if you were arguing it was good, but it turns out to be bad, you have to make that concession and vice versa. So this leads us naturally into our last question, which is what I think a lot of people are curious about. I mean, you've been such an institution at the FT, and I think a lot of people think of you is synonymous with Alphaville,

and we're disappointed as see you leave, but, you know, that I think that your 10 years, there suggests that you have something really interesting that you must be doing as a follow-up. So tell us a little bit about your new venture and what that entails. Well, thank you very much for asking. Look, I've been at the EFT for 13 years. And like any, you know, it's very much, it feeds into what we have been talking about. Eventually, you need a change. Eventually, you have to challenge yourself. You don't want to get too comfortable in your position because then you become lazy and you end up doing sloppy work, right? So I think I need a new challenge. I couldn't see any new challenges

within the FTA. And I think, you know, without being too harsh on my former employer, because I don't think it's necessarily like a witting problem by any, it's not something that was done intentionally by anyone. I think it's an unwitting evolution very much in the spirit of anisynycholosis, is that the mainstream press has become incredibly bureaucratized and institutionalized and the sort of ability to scrutinize itself, but also to challenge its own systems, has been slightly corrupted. And that's to do with how the internet has challenged the conventional newspaper industry, how journalists are rewarded, what incentives they respond to, etc., etc. And it's very hard now to innovate in that space.

is very hard to challenge and push back against ideas that maybe become a bit too entrenched. I've always been a contrarian. I've always wanted to test out different perspectives. That's very hard now in the mainstream media, partly because there are these structural issues that I don't think most journalists themselves are aware of. And it's not to say that, you know, I think most of my colleagues are incredibly good-hearted. and they really do believe in what they're doing and then challenging the status quo or holding power to account and all that sort of stuff.

I don't think they see necessarily what I see, maybe because of my Polish experience, maybe because I did see what the media ended up doing in those systems and how it became a group think how it stifled any kind of like challenging perspective, etc. So I don't think it's a conspiracy or anything. I think it's just the nature of how things evolve. And what I'm going to do as a result is I'm going to try and create a system that pushes back

against some of that centralisation. So I want to create a, you know, at the moment, the only challenge is the independent media. But the problem with the independent media is that it doesn't have any credibility because it's independent, because it's fringe, because in some cases, like you look at Joe Rogan or someone like that, huge audiences. But larger, I would say, than some of the mainstream press, right? But there is this question about credibility on a broader level. Like Joe Rogan's own audience obviously thinks he's highly credible, but that doesn't necessarily travel. It's not like the concept of what the BBC used to be or of a big name media brands, right? So what I want to do is create a platform where independence can operate, be funded and monetized,

but also have a way to credit check themselves. And the way I think you can do that essentially is by having the bias be pre-declared. My theory is that everyone is biased. I don't think it's possible to be neutral in this day and age. And now that we live so much online, you know, your history is everywhere. And you're always going to have had some specific skew on something or that makes you inherently biased on a topic. Right. It's just life.

It's just experience. But that's not a problem, providing we pre-declare it. And that doesn't mean like having every bit of your personality and life reviewed by, algorithms. It just means showing your commitment to your values and doing it transparently. So my theory is, is if journalists organize, independent journalists organize according to values and codes of conduct like knights back in medieval times, then you know what they stand for. And if those organizations can then self-regulate their own sort of members. So if they break their rules they get kicked out, then that is going to be a very powerful offering to

challenge the mainstream because one of the problems in the mainstream is that the brand values are not associated necessarily with the journalists in-house because when you're a journalist, it's such a competitive landscape, you're going to take whatever job you can. And very often when you're starting out, you will work for a company irrespective of whether they share your values because you see it as a mechanism of getting into the organisation. And that's problematic because readers obviously buy certain publications because of their masked head values.

But if the writers don't agree with, you know, it's an unknown. It's a sort of known unknown quality that resides in journalism. But if you segregate that and you get the journalist to basically be a, independently, like an Uber for journalists, but where Uber isn't the one setting the rates or the standards. So people can benefit from the platform, journalists, but they set their own rules and they're held to account by their own, but it's a market for codes of conduct, essentially. So that's where I'm going to try and develop. It might not work. It might be a terrible idea and it might fail. I do think maybe some elements of Web3 could come into it,

But I'm still a little bit cynical whether it can be executed in the way that I would hope for it to be executed. I don't think Webfree may be still an early model to apply to this. But I'm hoping that I will iterate as I go. I don't want to sort of come to Mark and say this is my thing. I want it to be an open-ended project where everybody benefits. It's a positive sum offering. I'm very, you know, indifferent to whether I end up being known as the founder of it or whether it's successful or whatever.

I just want to solve the problem. And I think the problem is that we can't really operate according to values in our current system. So would it be presumptuous to ask what you would put on your own Mastead, your own core values, if you were to create a guild? So I think number one, it would be a commitment to alternative perspectives and free speech and contrarianism and not being offended by anything. Testing the water, but also very importantly being fair to your opposition and, you know, right of reply. I mean, fundamentally the core qualities of journalism that we know and understand as represent. representative of the kind of golden era of journalism, which is holding people to account,

but also being transparent about your own kind of biases and being able to do a far incredible job when you are verifying information. But understanding that the story is not always just because the facts are there and checked out doesn't necessarily mean that the story is 100% not biased because it's the framing of the story that really matters. And my other big value is trying to see things from other people's perspective. I think it's really important.

And you can come to a story from a, I mean, the way stories originate obviously are, it's obviously even from a tip or from a hunch, which is a bias in and of itself, right? But it's important to always consider the other perspective because if you don't, you end up just being a, well, there's room for partisan journalists. I'm not saying there isn't.

And that's the beauty, hopefully, of my system is that we can compete on a level of playing field with people who are more transparent about their values. But yeah, I think key values, commitment to freedom of speech, commitment to democracy, commitment to open systems, and trying to avoid any form of overt, top-down bureaucracy as well. I mean, those are my main anti-issues. Sounds pretty great. I think I would read that publication. Well, I think we'll leave it at that. I've taken a lot of your valuable time, especially as you're now a builder. So how

hashtag Biddle, as they say. Do you, where would you encourage, I know, you have a big Twitter, but where else would you point people in terms of following you and following your new project? So I've built, I haven't built my, my offering online yet. So I think the best place is to just go to my Twitter handle for now, which is at is a Kaminska, K-A-M-I-N-S-K-A. or you can, I did do a little teaser of what's to come on a parody website that I just did, which is, I think I'll withhold that one for now.

Okay. It'd be us. But yeah, watch this space. The platforms has a working title. It's second media, but I have to look into trademarking and all that sort of malarkey. but that's what it should be called if things go as planned. So watch this face. Thank you very much, though, for having me and for entertaining my rants.

No, I'm really grateful for you coming on. You know, I've been a fan of years, even though, you know, I've been upset with you from time to time. No questions about that. But that's healthy. That's healthy. I think it's good to get upset. It means, you know, it's a good thing. I like to hear that because at least your sayings, I mean, obviously everyone deals with trolls every day.

It meant that your critiques were very on the nose and nobody, no one likes, you know, a sharp critic, right? They like critics that have bad arguments because you can wave them away. But yours happened to be pretty good, which was the same. Oh, that's very kind. And like, you know, we've been on this journey together. And I think the other element I think is really missing from the internet is just face-to-face conversations and human sort of interaction, which allows for coming to consensus, ironically, in a far more pleasant and constructive way. And I think so much of Twitter is the way it is because people don't talk to each other. And you get very, take things very personally, don't you?

when perhaps you shouldn't. So, yeah, I think one of my values would definitely be, don't get triggered. Right. Yeah, I'll do my best. Well, I look forward to the project. I'm very excited about it. Thanks again for coming on. Thanks, Nick.

Thanks so much. Take care.