TFTC: A Bitcoin Podcast - #476: The Story Of The People And Projects That Inspired Bitcoin with Aaron van Wirdum

Episode Date: January 26, 2024

Marty sits down with Aaron van Wirdum to discuss his new book The Genesis Book. Aaron on Twitter: https://twitter.com/AaronvanW The Genesis Book: http://thegenesisbook.com/ 0:00 - Intro 6:32 - Storytime with Marty 13:00 - Genesis book 16:15 - Where does Bitcoin’s history begin? 19:43 - Cypherpunk history 27:50 - Who are the OGs? 31:05 - Precursor projects and culture 35:53 - Hashcash, BitGold, B-Money 43:11 - Demand for privacy tech 52:18 - Whitepaper and genesis block 1:00:06 - Cypherpunks today 1:03:52 - Timing and Chaum 1:09:51 - Free banking, extropians, AI 1:20:01 - Pitching the book Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠CrowdHealth⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Bitcoin Talent Co⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠Sote⁠ TFTC Merch is Available: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Shop Now⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the TFTC Movement: Main ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Clips ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Website⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Instagram⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Marty Bent: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Podcast⁠⁠⁠⁠

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you'll get 15% off. Enjoy this rip. you've had a dynamic where money's become freer than free when you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be probably should be aaron it's a long time coming it's your first time on tftc which is

embarrassing on my part it is yeah we came close one time in new york i think but i wasn't close enough to actually come on the show yeah now i think david was on david bailey was on and i think dms me but i was like not actually the physical building or something i i recall something but yeah this is the first time i'm on that was a consensus 2019 i think maybe 2018. one of these yeah yes i think it was right after 2017 because they're still somewhat bull vibes so i think it was 2018 but i'm happy we're doing this now we're here to talk about your new book the genesis book the story of the people and projects that inspired bitcoin but before we get to that i wanted to walk you through a pivotal point of my bitcoin story that you were involved in

which revolves around the uh bitcoins uh moby dick research that laurent did into the spamming attack on the bitcoin network around 2015 2016. i don't know if you recall but But Laurent put together a Slack channel, and at one point it was me, you, and him trying to dissect the chain data of the spam attack. And I had no idea what I was looking at, but you and Laurent were conversing back and forth, and I was just observing from afar of you guys diving into this data. I do remember this. I definitely remember the term you mentioned, the Moby Dick spammer, and I remember – did I write an article about it in the end? Probably, right? I think so.

i think laurent wrote a series on it as well yeah i don't remember the actual details but i just remember that this happened yeah but i couldn't tell you anything about it anymore i just the name rings a bell and i know i was sort of there for it yeah yeah from from what i recall leading up to the fork wars obviously the fork wars revolved around the fact that bitcoin fees were high we need to increase blocks one faction thought um in laurent and basically identified that somebody was spamming the mempool with 564 sat transactions and he was using oxt.me to visualize that and we were in the slack channel and for me that was pivotal in my point really like diving into chain data and better understanding like the nuances of utxs and how

they can affect the fee market yeah yeah i i i mean there was a lot of shenanigans going on around that time including yeah these spam attacks to sort of make the blocks look full even though they weren't really at the time i definitely remember all that kind of stuff going on which ironically kind of proved the point of why you need a block size limit because otherwise you can just spam blocks to infinite sizes so yeah yeah at least with a blockchain size limits it's expensive to do it like yeah and at this time i think it was 27 or 28 i thought it was so cool and i was in a slack channel with you i think i've been following you for almost a decade now um and what you've been doing writing about bitcoin everything you've done at bitcoin magazine

and i was just like oh my god i'm in this slack channel with aaron aaron van weir and and laurent like digging into this chain data that i have no idea what what is what it's saying to me a pivotal part of my bitcoins story is uh being in that slack channel with you and observing cool yeah and so yeah i like i said i you you have a better better memory of this event than i have i remember it happened but that's that's pretty much it um yeah i mean you've probably forgotten more than people have ever known about bitcoin most people on the planet with all the research that you've done all the writings that you've done all the research that you've done not only into bitcoin itself but

with this book the genesis book digging into the history of the precursors technologies and economic theory that led to bitcoin what uh what's it been like i have a space I have forgotten more than most people know about Bitcoin. That's what you said. I mean, that's probably true because most people don't know a lot about Bitcoin. Plus I have a bad memory. So it has to be true, which you just said.

Yeah. So what's it been like covering the space for you? In general? Yeah. What's it been like? Why do you cover it? Like, why did I even start covering this? Yeah.

um i mean i think bitcoin let's say money is an important tool for humanity right arguably the most important tool so i i actually studied like political history it's there's a longer name to it but i was also sorry i was always interested in sort of how do people organize so how does society organize you know what political systems have been tried uh economic theories like it was sort of always something i found interesting and even before bitcoin i'd gotten interested in both finance like the whole financial crisis had been happening of course so that sort of attracted my attention but then also the free and open source software movement which has its own kind of ideology own way of uh cooperating which i also describe in my book for a part

And with Bitcoin, these two really came together. It's an open source form of money. And that just blew my mind. Like while everyone was talking about either reforming banks or especially in the United States, maybe ending the Feds and Bitcoin just sort of did it. And for me, that felt like a very interesting and potentially incredibly important breakthrough that I at first I wanted to just write a couple of articles. or started with one but then you know the more i learned the more i realized that this is just going to be my career now i started a blog at first and then a new site and started freelancing for bitcoin publications and i'm still here now i wrote a book yeah yeah well it's a good

layup to to talk about the book i think that's one of the misconceptions around bitcoin from people who aren't really involved and they're looking at at it from the outside in they see it as this technology that came out of nowhere and many have equated it to the my space of the cryptocurrency space but what you're diving into here in the genesis book is that's not true bitcoin is really the culmination of almost a century of advances and in political theory economic theory and then computer science as well many many tried and failed to release digital currencies over the last three decades and it wasn't until satoshi gifted the world with the white paper and the the protocol that we actually found a a digital currency that that seems to be working

yeah for me personally i knew about some of these earlier projects in the same way i think many bitcoiners especially these days will sort of know that there were these other projects although when i started writing i i think that was still kind of a mystery for many people there was still sort of this idea that bitcoin really came out of nothing and like you just explained it really didn't but even if you know it didn't like for me personally a couple years ago i knew there was this thing called bit goals that nixabo worked on and there was this hash cash and b money which is mentioned in the white paper but for me that was sort of it there were like footnotes in white paper there were there was this one page in a bitcoin book that mentions the cypherpunks

that mentions that there was this thing going on these people before bitcoin that were interested in this stuff but that that was sort of it and for me at that point i've been writing about bitcoin for multiple years i've been uh exploring it through my articles myself understanding how it all works and also especially during the block size wars which you mentioned kind of being in the middle of this debate about the future of bitcoin so it's really covering it intensely for years and at some point i felt like i know i want to know more about where this actually came from i want to know more about what is this actual prehistory that that sort of alluded to in in this uh one page in the chapter one of this other bitcoin book like what what are

they actually talk about what what is the story here what did drive these people so that's what i set out to do for the past couple of years i've been working on this book for a couple of years in the meantime i also published several articles sort of standalone articles on the specific digital cash projects that came before bitcoin these were called the genesis files and now yeah the genesis book really kind of tries to wrap it all in one big story also includes a lot more of the economic foundations of bitcoin and how that all sort of interplays and ultimately led to bitcoin that's that's the goal anyways that's what i set out to do yeah and so how far back does this go where where do you draw the line of like all right here's the first step toward bitcoin

what part of history yeah so it starts with um the uh arabs inventing zero no that's that's actually that's actually a dilbert comic joke do you know this no it's it's his dilbert's comic where someone asks uh okay explain blockchain to me and then that's where he starts with the invention of zero um explain it to me but don't give me the i i i don't remember the exact joke anyways so actually i start my book so there's two starting points in my book essentially uh it starts with two legs if you will or two there's two story lines in the book one of them is really the economic part so the book opens with hayek well not counting the introduction the book opens with hayek and then in the first part of the book um i explore

Hayek's thinking about money and I choose Hayek specifically because I think in different parts of his life he had ideas that were very relevant to bitcoin like early in his career he was sort of musing about this neutral money which would be a currency with a limited supply that could be used internationally borderless so very much resembles bitcoin later in his career he He proposes that money should be left to the free market. And then even later in his career, he sees the only way to enable that is to create something that governments can't stop. There's this famous Hayek quote that many Bitcoiners will have heard. So Hayek sort of has this recurring role in my book.

And that's one side of the story. And then the other side of the story starts with the emergence of the hacker culture. So it starts at MIT, essentially, where the first computers are brought on campus and hacker culture emerges, which is really based on this idea of sharing their code and free software and open source software comes from that. And this storyline proceeds with the invention of public key cryptography, and it all sort of starts to merge with the cyberpunk. So the cyberpunks try to create digital cash. Some of them, you know, I already briefly mentioned, like Nick Szabo's Bitgold, and there was Hal Vinnie at Arpao, Y-Diet, B-Money, which is referenced in the white paper. so at this at this point these cyberpunks want to create digital cash and they're really inspired i would say by these two different kind of ideological movements that that yeah sort of

become one at that point and also in the book at that point in the book it sort of becomes a more singular storyline with these different projects sort of following each other up yeah that's to give you a specific like beginning date like the hayek storyline starts basically in the 20s 1920s although even there they're sort of like this flashback which goes a bit further into history like where austrian economics sort of emerges so that's 19th century and then the tech track that sort of starts in the late 50s early 60s it's it's fascinating because it seems having been in bitcoin for 10 years and looking back seems like i mean i personally believe that we've been going astray as a society for the greater

part of 100 years due to fiat money and central banks and the implications of that are pretty massive as we talk about day in and day out within the bitcoin community and more people are starting to talk about it more broadly um but the fact that it took sort of individuals in the economic uh theory realm and then individuals in the software development cryptography realm to really take it upon themselves to fix this problem is extremely inspiring um especially when you consider uh honing in on the cypherpunks particularly they were working on this for decades and failing over and over again, but failing forward with things like PGP and other cryptographic primitives and hash cash leading to Bitcoin eventually.

And so how do you think the cypherpunk, like how quickly do you think the cypherpunks when they initially set out on this journey to create a digital currency, how quickly do you think they believed it would take initially compared to how long it actually took leading up to Bitcoin's launch? well first to remark on what you said like it is an insanely inspiring story indeed right especially let's just assume that bitcoin sort of succeeds and we're not there yet but if it does it's such a major accomplishment of this small group of people and it was a small group of people like it was you know in the hundreds maybe at its very peak there were like 2 000 people on the

cypherpunks mailing list but then most of them were just readers like the people that were really driving it forward was such a small group like if bitcoin succeeds then i would really expect future historians to look back on these guys like americans in particular sort of look back on the founding fathers right it's it's it's a it's a small group that actually achieved something really massive which is super interesting uh now i forgot your question what was your actual question before i rift on what what do you think their expectations were when they initially set out to launch a digital currency compared to how long it actually took right well keep in mind so when the cypherpunks started working on digital cash digital cash kind of already

existed i want to say existed even though that's a little bit of a shortcut um so yeah david chalm david chalm cryptographer he essentially invented digital cash in the 80s and when i say digital cash in this context i very specifically mean or he's very specifically meant a form of currency for the internet that can be used anonymously so the strong emphasis for chalm in particular was on privacy anonymity he wasn't trying to like reinvent money or he He wasn't a gold bug or none of that. He was just trying to achieve privacy. And this is also initially what attracted the first cypherpunks to digital cash technology.

Now, it was in development at that time. So cypherpunks were launched sort of 1992. and at that point david chow already had his startup called digit cash in amsterdam which started in 1990 so when the cypherpunks at first thought about digital cash they kind of thought about the thing david chow was building that's that's what inspired them and that's what they were trying to achieve you could say so this was just centralized it it was a technology for banks so banks could use it offer it to their customers and then the digital cash you had was basically you know had a one-on-one value backed by whatever fiat currency the bank had

so this existed but david chow did take some design decisions or his company was going in certain directions or was making certain trade-offs that not all the cypherpunks were really happy with. So one of them was DigiCash was really sort of focusing on hardware modules. There was a strong focus on making payments in real life rather than over the internet, which sort of makes sense if you think back to the era, right? Like early 1990s, most people didn't even have internet yet. So the focus was on making in-person digital payments and making these anonymous. So that was one of the focus that not all the cypherpunks were happy with they thought you should just focus on you know internet currency and focus on the crypto protocols and then there

was also an even bigger trade-off which had to do with privacy like in in chum's model the recipient of a transaction wasn't necessarily private to the sender because if the sender would collude with the bank, then they could sort of work together to, you know, de-anonymize the recipient. And Chown thought it was probably a good trade-off because that way extortion would be, you know, kind of impossible or, you know, other bad things would be harder to do if the recipient could be de-anonymized in the worst case scenario. Now, the cypherpunks had a more radical idea. They thought privacy is a human right, should be much more absolute.

and whatever downsides come with that, that's just a trade-off we have to make as a society. Yes, it will be abused by terrorists or pedophiles. Yes, they will also abuse this privacy in the same way that they're already abusing curtains. You can close your curtains and indoors you can do whatever you want. And there's no police that can just come in,

they need a warrant. These are trade-offs we make as a society. And so the cyberpunks had this strong idea that we should be making similar trade-offs. And what started to frustrate them is that they couldn't actually freely use the technology that Xiaomi had developed. So there's this sort of irony that Xiaomi and his electoral cash technology was a big inspiration for the cyberpunks. But at the same time, the cyberpunks also saw him as sort of holding up these developments because they couldn't create new forms of digital cash based on the same technology so really for a couple of years it was a very for the cypher very frustrating time where it seemed that this

technology was sort of within reach but they couldn't quite use it they were trying to find ways around it like they had this small kind of play currencies that were based on the same technology and they figured if it's not used you know commercially then we won't get it too much trouble and then there were some cryptographers that were trying to make slightly different versions of chalms electronic cash and figuring that maybe that way they could get around the patents but for a couple of years it really sort of stalled and it wasn't going nowhere you could really see some of these guys like adam back like the frustration was really growing for them i i quote that in my book as well how it wasn't really going anywhere they were discussing if they should

play ball with xiaom like get his get his license but yeah i was stalling and really the breakthrough happened with hash cash so that was like between founding the cypherpunks in 92 and creating hash cash that was five years so there was five years of kind of frustration and stalling before there was this new insight of how it could actually potentially be done yeah before we dive into hash cash i think you stoked an idea in my mind which is like laying the the groundwork for anybody listening to identify who you deem to be the equivalent of the founding fathers in the cypherpunk movement specifically and maybe a big ass to make you list them all out but in your mind like the small group of people who were the most pivotal pivotal excuse me oh yeah good question i

mean tim may has to be on that list for sure tim a super interesting guy passed away a couple years ago right before i could interview him unfortunately i i contacted him but um then he passed away but um he was very active he was kind of the de facto intellectual leader moderator kind of very influential person on that list not not certainly not the only one and definitely not some sort of official leader because the cypherpunks sort of by design were this decentralized group where no wasn't charged there were no hierarchies it was just this group of like-minded people that shared a goal that met either in real life or on a mailing list to discuss their ideas and strategies but tim may was very pivotal he was one of the founders and he was also the most active

contributor to the mailing list where he would consistently share his ideas and what he expected cryptography to be able to achieve and he in particular had a very radical interpretation of the potential of cryptography he saw so he uh he wrote a crypto anarchist manifesto and which i have behind me on the poster by the way printed out and and he saw cryptography and digital cash in particular as as tools to really undermine the state. It would allow people to not pay taxes, which would in turn lead to a tax revolt. And also like secrets, it would be impossible to keep secrets.

So including government secrets or big corporations couldn't keep secrets. if you can't keep secrets it's really hard to run a large corporation like that so he had these very radical ideas but there were also moderates or more moderate uh cypherpunks on there eric hughes for example was a lot more moderate but he's another co-founder john gilmore another co-founder um and then some of the more well-known guys in uh in the in the bitcoin space would for example be You know, Nick Szabo, Hal Vini, Y.D.I., they were all quite active on there as well. But yeah, there were a whole bunch of people that were discussing these kinds of ideas and digital cache tools and also just general privacy technologies, of course. yeah and yes yeah and you have to imagine like a distributed workforce working on a combination

of open source and closed source technologies aiming for this ideal like was there any similar type of software projects or movements like this before that few if any i imagine um well like internet protocol stack but yeah well uh phil zimmerman he was building pgp and and he did start building that before the cypherpunks existed and then of course david shellm was building uh electronic cash as well before like he was the inspiration for the cypherpunks or one of the inspirations so he was also building that before the cypherpunks but in general not really or at least the types of tools that cypherpunks were developing so privacy tools essentially that didn't really exist yet before the cyberpunks in fact that's

why the cyberpunks were founded that's why tim may and eric hughes and john gilmore why they wanted to found the cyberpunks because all there was this revolution in cryptography that had been happening since the 70s 1970s but to actually turn these crypto So protocols into tools that people could use, that hadn't really happened yet. So that's what they tried to achieve. And that's why they gathered these groups of hackers and friends and computer scientists to start building this and start realizing this. Yeah.

In your research, like going back and reading the mailing list and all the papers that were put out, what was, I'm trying to get at here is like, what was the, what was it like the coordination efforts like in the beginning like did you see like the coordination of these projects evolve you imagine these people are doing this for the first time it's never been done before outside of a few projects before the cypherpunks launched like what was and then you compare it to a project like bitcoin core today or linux and all these other open source projects like how how much of a rough path that they have trying to learn how to coordinate and work on this together in a distributed fashion um well at the very beginning they started to meet

like at someone's apartment right at eric hughes apartment and they were actually sort of role playing how electronic cash for example could operate or how like the precursor to tor like remailers how that would actually work so they were sort of playing this out with physical envelopes and pieces of paper and monopoly money or whatever they were using to play these actual games.

On the mailing list, good question. You mean the actual tech development, right? Yeah. What I'm trying to get at is the culture. How did it form and evolve around building these tools via

mailing list and the combination of that meeting in person actually writing and testing code yeah well i think it was around this same time so around the cypherpunk era that um linux was also introduced and that really sort of reshaped the culture of how to cooperate on building software open source software specifically in general like before that there was still like free software existed which is tolman had been working on free software but there was still this ethos of you need this sort of small group of experts to to build this and to fed it and to make sure it's bug free and this tended to happen in like computer environments like computer labs at universities and it was really with linux that uh this kind

of got flipped and it became this this collaborative model across the internet where everyone could contribute um i would say the cypherpunks mailing list specifically was more a place to sort of discuss designs and discuss ideas and discuss potential rather than a place where the actual development happened it was more a place to sort of find each other and they did share uh software they did share code but it's not like it happened on the list itself that was more a discussion forum type of situation yeah and then bringing this back to the timeline of choms ecash sort of frustrating people and then adam back releasing hashcash why was hashcash so pivotal on this journey towards bitcoin in your opinion yeah so adam back designed hash cash initially as postage

so it was meant to be postage and the reason so postage for the internet for email essentially and the reason that was very necessary at that time was because uh i mentioned that cypherpunks were using remailers so this was a way to email someone anonymously email someone without that person knowing that it was you who emailed them so this this these were cypherpunk tools that cypherpunks were running like they were running remailer servers but these servers were increasingly being spammed so they were uh you know basically some sort of denial of service attack seemed to be going on where you know thousands of emails were just being sent through these servers consisting of gibberish it seemed like and these servers became too expensive or too burdensome to

actually operate so this is why the cypherpunk specifically wants to create something akin to digital postage so something that would come at a cost so sorry something that would make sending an email cost something and they did think about using electronic cash for this like chelms electronic cash you just put a little bit of e-cash in an email and only if it has this e-cash in the email would you accept it or would the remailer accept it but e-cash was not quite ready for this it was not quite designed in such a way that it could be used for this so then adam back came up with this today for hashcash which in order to send an email the sender would have to perform a little bit of proof of work so you know your computer does a bunch of computational cycles

to prove that you actually spent energy and then only if this proof of work was included in an email with the remailer accepted or with the recipient accepted what is really introduced so this was the original intent for it for for hashcash but what it introduced was digital scarcity extent essentially right so some way to create something that's digital but that proves some sort of expense of real real world resources, real energy, real computing power. And this really inspired a number of the cyberpunks to take their thinking about electronic cash in a new direction.

So where previously the idea was we're going to create digital cash that's sort of operated by a bank and it's backed by fiat currency, now they really started to think more in this way of digital goals kind of thing like maybe we can have a digital cache that's not backed by something else so they were having these discussions on the cypherpunks mailing list some of it which i detail in my book about whether digital cash actually needs to be backed whether it just needs to be limited or whether it should be considered cash if it's not backed or if it's backed or so they were starting to really consider this and when hashcash was introduced a year later you see these other digital cash protocols being proposed so the

most notable ones are nixabos bitgold and white ice b money which both both used as scarcity this provable scarcity this proof of work as sort of the foundation the fundaments for their digital cash projects now these digital cash projects had other problems but you can really see this thinking to be embraced and sort of taking the whole concept of electronic cash in a in a new direction from that point out yeah and did i forget the bit gold or b money ever leave the idea phase or they no no they were both uh just proposals uh they were they were proposed very briefly after one another there was only like a month in between them but yeah both had well fundamental problems and maybe that's why they weren't like they couldn't have been

implemented basically or you know you could have sort of tried but there were very real problems that were unsolved still so yeah they were only ever ideas proposals where bit gold is a pretty the, I would say, relatively detailed proposal. B-Money is a little bit more hand-to-wavy. B-Money is an even rougher idea than Bitgold. But yeah, both of them were not implemented. Yeah, I discussed B-Money with Dhruv Bansal from Unchained probably about a month, month and a half ago now.

At this point, he was explaining how the auction to create b-money really doomed it from the beginning because you didn't really have this fixed supply that people could anchor to sort of had figure out a way to coordinate these auctions to birth the supply into existence right yeah it would i i would say b-money was it was an interesting idea it was sort of almost wide eye kind of thinking out loud is how i sort of read it um he by the time he published b money he had grown sort of disillusioned with the whole digital cash movement actually or with the whole cypherpunk movement even because he he felt that all these tools that cypherpunks were developing and all the ways they were

thinking about improving privacy it turned out that no one was interested right the Internet has by this time started to become a real thing and no one was using any of these privacy tools to the cypherpunks you know we're putting their heart and soul in no one no one gave a damn so he also expected that even if they could realize digital cash probably no one would even use it because people are perfectly comfortable using credit cards or PayPal or whatever, you know, privacy infringing technologies are out there. So what's the point, sort of?

So my reading of the situation is that Y.D.I. had been thinking about it for a while and at some point he kind of grew disillusioned and he just sort of said, all right, here's what I got so far. If someone wants to take this ball and run with it, go ahead. but it's it was still far from a finished protocol but it had some interesting ideas in it for sure yeah and how much do you think that disillusionment on the part of way die was the fact that he was so close to everything going on was following this for years it didn't seem like there was mainstream adoption or even um appetite to adopt like how much of that was just a product of how

foundation the internet was and consumer's access to the internet was at that time? Well, I would say that in recent years, we've seen a bit of a resurgence of, you know, sort of the cypherpunk ethos, right? And part of this is Bitcoin itself. But you also see, you see it in other domains as well. You know, we have Signal these days, even WhatsApp, like implemented it's cryptography so clearly people at least pretend to care companies at least pretend to care which probably means there's at least some market demand for it like people also the snowden revelations of course were a big part of that like it's it's uh re-inspired thinking about privacy technologies or the lack thereof but yeah if you recall definitely like the late 90s

early 2000s when the internet was still pretty new privacy was just not a topic that anyone really seemed to care about or mind and um so i i can certainly see you know the the cyberpunks that was very early to the to the internet and then when the masses sort of come and all cares about what they thought everyone would care about that's that must be a very disappointing realization and it was for many of them so yeah the cypherpunk movement sort of dissolved around that time yeah and so this was like 1998 when b money was released i'm sure there's a bunch of where the idea was released there was probably discussion for some amount of time and then obviously there's a 10-year gap between that and bitcoin the bitcoin white paper

appearing on the mailing list in October of 2008? What happened between that 10-year period, that trough of disillusionment, if you will? Yeah, well, there's one more interesting digital cash project in between these, which I highlight in my book. I will also say there were a lot of sort of electronic cash systems in name only during that time. So there were a lot of startups and technology companies that were selling or introducing something which they called cash for the internet in some way or another.

But it didn't have any privacy features, that's for sure. So in whatever way, whatever they associated with cash, probably something like fast and cheap transactions. but privacy was just not part of any of these designs um but the interesting sort of cypherpunk technology late very late cypherpunk technology that still came out in between b money and bitcoin was arpao so halvinny very telling for his character probably he sort of kept his enthusiasm up he he was always very interested in new digital cash projects that were introduced on the Cypherpunks mailing list. He was very

often sort of the first to jump on it, try to understand it and came back to the mailing list, sort of try to explain it in his own words to other people on that list. So he was a very prominent figure there, especially in this electronic

cash sort of sub-segment of the Cypherpunk community. And he He was still motivated, and he was almost certainly one of the very few. I think Nick Szabo, when I spoke with him, he said his estimation were that there were maybe three or four people so interested in this stuff by the mid-2000s.

But Hal Finney was definitely one of them. He was still interested in specifically kind of realizing bits gold and b money type of ideas now what he actually built was what he called a very simplified version of bit gold which it had to be because bitcoin was quite complex um there's like different layers to that design so our pile was a very simplified version but it was kind of interesting that it leveraged sort of the transparency of free software so that even Helvini couldn't cheat because it was a centralized system. So it sort of went back from decentralized proposals like B-Money and Bitcold sort of

were, and then it went back to RPAL, which was centralized. But Halvini used a remote attestation technology, which was a special IBM chip in combination with free software to sort of prove that the protocol did exactly what it had to do. Very relevant idea for Bitcoin as well, of course. So this technology came somewhere in between. And interestingly, it was also actually implemented. So it did work. It was really a thing people could use. uh kind of interesting is that greg maxwell was also one of the contributors to this

project bigger core developer of course um but it never really caught on this is probably in large part because our pal didn't have a solution for the inflation problem so the currency was created with proof of work but as computers become faster over time it becomes easier to create proof of work so you sort of has have this intrinsic inflation because of that and you know if you know that your money is going to inflate then it's not very strong incentive to want to accept it of course so there's probably a big reason why arpa didn't take off or at least that's what i think that's what greg maxwell thinks as well um but it did operate it did work for a while so that gets to the question of what is the core innovation of bitcoin that's

again going back to the conversation with drew he wrote a piece recently that really puts the the case forward that digital scarcity and a fixed supply 21 million with a predetermined supply schedule release schedule is the key innovation obviously with the combination of proof of work with the difficulty adjustment and leveraging ecdsa to create private public key pairs all that combined really allowed bitcoin to succeed in the way that it has over the first 15 years but it was really that last piece of the puzzle figuring out like hey we need a fixed supply out of the gate that's predetermined yeah i think the the big thing bitcoin did was getting the incentives right as i mentioned rpow basically works like if you just wanted to use digital cash

then rpow it worked or even e-cash you know the technology works but also e-cash was not adopted probably for the same reason like there's no strong incentive to adopt e-cash like some people care about privacy sure but a lot of people also don't care about privacy while you know if there's monetary or if there's a financial incentive to adopt a currency well now all of a sudden a lot more people will care so i also think that's that's a big piece of the puzzle that satoshi sort of got right if you look at these different electronic cash projects that preceded bitcoin then almost all different parts of the puzzle are there in in one of them like bitgold's already very much has something that starts to resemble a blockchain with like this this chain of hashes

essentially b money already introduced this idea that everyone should run their own node in a way that everyone should keep track of everyone else's balances uh arpao leverages this free software idea that anyone can check the code of course hashcast as proof of work like a lot of these tools or a lot of yeah were there a lot of the parts of the puzzle were there and satoshi definitely in my view is all he put it together in a way that's not just very elegant but also the incentives now for the first time aligned there was actually a reason for people to want to get some of these coins because the value might go up and that's that's a big motivator to get digital cash even if you don't care about the privacy aspect of it

yeah and when satoshi hit the mailing list with the white paper in october of 08 in your mind how did this what reaction did this cause the the greater cypherpunk movement to have obviously how finney was in early i believe his way die was highly skeptical in the beginning what was re-emergence of this idea of digital cash and the way that satoshi brought it back how did it sort of disrupt that that community right well you mentioned wide eye he was emailed before it even hit the mailing list so both adam back and wide eye were reached out to privately by satoshi and both of them weren't um weren't weren't buying it so to say which to a large extent has to do with the disillusionment that I already mentioned and also there'd been so many

digital cash projects that just went nowhere so it's very understandable I would say you know someone you've never heard of reaches out says I've you know I fixed the problem it's very natural to be skeptical I would say that that's totally normal I think and that's also what you saw on the cypherpunk mailing list for the most part so yeah the initial responses were definitely either indifferent and i should mention by the way at this point the cypherpunks mailing list had for practical reasons been dissolved and now the sort of more serious cryptography mailing list had taken over like a lot of the same people started to discuss their ideas and strategies there so it was very similar but it was a it was a bit more moderated to limit the amount of flame

wars and spam and that sort of stuff but yeah for the most part i would say it was indifference and then those that did uh pay attention to the email either didn't believe in it or just didn't understand it um i i quote some of these emails in my book or at least some of the some parts of it's like i forgot who it actually was i forgot the name of the person that sent this email but someone funnily enough suggests that bitcoin seems like a pretty good idea but it should have a difficulty adjustment algorithm which it did so clearly you didn't understand the proposal very well which i should also say also very understandable you know we live in 2024 now And now if you get into Bitcoin and you type it into YouTube, there's like a million colorful explainer videos and everyone wrote an article or a book like me about how Bitcoin works.

But if it's 2008 and you've never heard of this and there's just this white paper from this one guy you don't know, you're sort of just reading through it. Obviously, most people wouldn't understand it perfectly the first time around. So I'm not like judging these people, just noticeable that they didn't quite get it. But yeah, again, the noticeable exception is, of course, Helvini. So Helvini still at it, just like on the Cypherpunks mailing list, often sort of the first to take an interest, try to understand it, ask questions, try to re-explain it to other people. And you still see this in 2008 when Bitcoin is first introduced by Satoshi, that Hal is still this guy that's sort of enthousiastic. What's the English word?

Enthusiastic? That's not the English word. What's the English word, Marty? For enthusiastic? Is that just an English word? Enthusiastic. I don't know. I don't know the etymology.

Definitely is an English word. Okay. I think we're good then. Yeah, but so Halvini is definitely still one of these guys, pretty much the only one who's still enthusiastic about this new idea. And he starts to help Satoshi as well for the months that follow with some bug fixes, that kind of stuff. Yeah.

But pretty quickly, like if you read it back now, um like within like a couple of maybe like a couple dozen emails maybe not even a couple dozen the the discussion about bitcoin is sort of cut short by the moderator of the cryptography mailing list perry metzger in this way of um you know let's see code first before we continue discussing this, which retrospectively, it's kind of funny.

It's like, you know, me, I'm like a, you know, I'm digging through these archives kind of like as a historian doing my research. And then this super revolutionary idea is invented. And then you've got this guy cutting down the discussion. Like, no, I want to read what everyone had to say about it. And this is like a gold mine. And now it's over.

so yeah and was that even correct because didn't satoshi say that he wrote the code before he wrote the paper because he wanted to make sure it worked he started writing a code before the paper yeah that's right but he published the paper before the code so there was still a couple of months between uh paper and and code of course but yeah he said he'd been working on it for like two years before publishing the white paper that's right that's true yeah so obviously january 3rd 2009 is when the protocol or at least when the genesis block was mined um yeah january 3rd january 3rd is the genesis block and then january 8th it was actually announced shared on the on the cryptography mailing list and at that point it was still

just the genesis block right no other blocks have been mine yeah yeah yes yeah yeah it was just the genesis block embedded in the code of course there were there had been no or at least you know we can't be completely 100 sure in in retrospect but at least according to the timestamps in the blocks these were all found after uh the code was released on the mailing list now you know if you want to get conspiratorial or whatever it's of course possible that satoshi would have mined these before releasing the code and embedding fake timestamps in the blocks, but there's no indication that he actually did that. I don't think he did that, but we can't be 100% sure based on the blockchain alone. We can be 100% sure, of course,

that the Genesis block was not mined before January 3rd because it had this headline in the genesis block yep and for anybody out there listening the beauty of the genesis block not only with the headline um in the coinbase transaction but it can't be spent so that was sort of an interesting decision that satoshi made like hey i'm gonna mine this first block just to get this started but i'm not gonna be able to spend any of the bitcoin that's officially mined Yeah, very cool touch, I think. Like even Satoshi himself had to earn his coins just like everyone else. That's true.

And so what do you think, having done all this deep dives into the history of the economic theory and the cypherpunk movement that led to Bitcoin, what was the emergence of Satoshi in the Bitcoin project? like what impact did that have on the cypherpunk movement overall particularly over the last 15 years like would you say the movement's stronger than ever has it gone astray at all was satoshi a figure that breathed life back into it i mean i think the ideas and the ideals of the cypherpunks live on but the movement itself is not really insofar it's still a movement it's definitely not what it used to be like it used to be as i mentioned both this sort of in-person thing in california where at the beginning maybe like 15 people showed up and then it became this early internet phenomenon with the mailing list

which as i mentioned i did speak had like 2000 people on there although most of these people were just reading um and yeah i mean today there's still people that call themselves cypherpunks obviously and some of the technologies live on bitcoin being an obvious one but you could also count you know something like tor or even something like signal i think that's uh perfectly fair to consider these cypherpunk technologies wiki leaks of course um what was also a very cypherpunk thing assange himself was on the cypherpunks mailing list so these ideas live on but um yeah to really consider it still a cypherpunk movement not not in the way it was anyways there's no central mailing list like that anymore there's still the cryptography

mailing list which is still going so that's still uh living on but i think you know someone like tim may was such a sort of central figure and his ideas and his contributions So that really sort of attracted a lot of attention and set the tone to a large extent for the cypherpunk community, I would say. And so with him gone and with the mailing list gone, I think it's a bit of a stretch to say that there's still a cypherpunk community. But the ideas live on. Maybe these are communities, movements, if you will, that need to be somewhat ephemeral. people take their ideas take them somewhere else

build another community maybe that's like the the whack-a-mole that's necessary to actually get these technologies into the hands of the mainstream users yeah that's a good point I mean even the mailing list like if the philosophy

of the cyberpunks is sort of this decentralized movements that has no structure and no one uh you know dictating where it goes then it's kind of natural of course that it just goes wherever and um the mailing list for example itself was hosted for a long time by john gilmore he at some point didn't want to do it so then yeah kind of the big migration happens um it migrated to usenet for a while and then there were different servers

sort of hosting that and as i mentioned the cryptography mailing list took it over but yeah i i would i i think that's probably a pretty good assessment that almost by its very nature of being this decentralized leaderless structureless thing it just kind of spreads to wherever and goes wherever and it becomes hard to sort of pin down in any central place or point yeah and one thing going through this history i can't help but think of how important timing is in the timing of when satoshi released the the white paper that eventually launched the protocol was so beautifully perfect in the midst of the great financial crisis obviously with the message in the genesis block he was certainly making somewhat of a political statement when he launched the

protocol and i think it's clear to me at least it was an idea digital cash more broadly whose time had come and satoshi luckily for us figured out the perfect ingredients to get something together that that actually works yeah that's that's still an incredible part of the story right how perfect the timing was and also again like if you imagine let's you know imagine that bitcoin does become this big success let you know hyper bitcoinization happens like future historians must be so incredibly astonished by the timing of it all and and just uh um the the sort of bottom-up nature of it like there's this big financial crisis going on and the solution is somehow found

on this niche mailing list with this paper by this anonymous guy it's it's it's kind of mind-blowing if you uh it's almost biblical when you think about it and you're right exactly right yeah it's really incredible yeah and then speaking to timing too like other like charm great idea with mints like maybe you just needed to wait till bitcoin was launched and then you can build more you can build mints the correct way leveraging something like the feddyman protocol there was a talk that hal finney gave back in the 90s about zero knowledge proofs and how they could be implemented and now people are figuring out ways to leverage zkps to help with initial block download of bitcoin like these ideas that

were brought into existence decades ago maybe the timing wasn't right like it just took bitcoin to be released and then you can implement them the correct way which is also fascinating to think about yeah it's really cool to see some of these technologies ecash being the most obvious example i would say yeah really cool to see that being rediscovered like when i started my research that wasn't the case that also this really sort of happened during that i was writing about this stuff i'm not saying it has anything to do with me that's not the claim at all i'm just saying it's interesting to see how like as i was sort of discovering these things it's also been rediscovered in a Bitcoin context, and people now actually start to build these technologies

on Bitcoin, which seems like, yeah, a very good match to me anyways. David Chaum is not really a Bitcoiner, he's- He started his own privacy coin, didn't he? Yeah, he was involved with Elixir for a little while, I have no idea what happened with that. Although I think Elixir was supposed to also support Bitcoin, it was supposed to also be a mixer for bitcoin but i'm i'm going off my uh sub-optimal memory at this point and i i don't know for sure what the idea was there i don't think it went anywhere right i don't think so

but it is interesting right because you imagine charm did that because he's looking at bitcoin in the trade-offs that satoshi made particularly as they pertain to privacy not what he probably would have wanted as a privacy idealist um and it's interesting now that Xiaomi mints are being launched on top of Bitcoin, which give Bitcoin users that privacy within these Feddy mints or just these signal operator mints like Cashew. Yeah, it's also... One of these kicking himself in the butt, like,

ah, maybe if I was patient and thought creatively about this. Like, you can't have it. It's just going to take time. In my mind, I think the trade-offs that were made as it pertains to privacy, while they're hard to stomach for a lot, i do think they're worthwhile at the protocol level and you can just push that up to other layers yeah it also uh it's interesting i mentioned bit gold so nick zabo's idea and how that was pretty complex or i mean it's not it's kind of complex but the reason it's complex or the reason i say that is because it actually also had different layers essentially so it also had like sort of

this base layer idea which can be you know that was the actual bit gold so to say that was sort of this digital scarcity this proof of work type of currency but then he imagined a sort of free banking layer on top of it which would be more suited to make the actual payments and to make the actual transactions on so this also you know this is very similar to the direction that even today sort of the prominence bitcoin developers or you know bitcoin thinkers are kind of thinking about scaling like this seems like a plausible way that bitcoin might actually scales you know through layers and through some sort of whether it's sediment or whether it's different types of um you know whether you want to call them banks or with different trust models and how these are

and sort of connected over the Lightning Network. Like it really resembles something that Nick Szabo was speculating Bitgold should be designed as. So you see these echoes and you see these lessons from the past sort of being either rediscovered or reinvented. And it's definitely, the lineage is clearly there with the whole digital cash project and Bitcoin. Yeah.

Speaking of the free banking conversation in Bitgold, and how much that big old project influenced Hal Finney. It's funny, in the early days in December of 2010, when he took to the bitcointalk.org forum to basically lay out the case that like, hey, we're going to scale in a free banking model where Bitcoin will be a reserve asset in these private banks and they'll issue,

he said, their own currencies. I don't think he could have foresaw something like the Fettiment Protocol or Lightning materializing at that time, but you could see he was directionally right. if you believe this is the optimal scaling path. Well, you could argue that Fediment in particular does sort of issue its own currency, right?

There are tokens that are backed by Bitcoin. So in that sense, it's actually very similar. Now, I don't think Fediment is using fractional reserve, or at least that's not the plan, right? While this sort of Celgene type of idea did use fractional reserve explicitly. There was actually an earlier draft of my book explored this whole part of free banking and george selgin's ideas but i i ended up

not using most of that because it was kind of speculating about the future of bitcoin while i really wanted my book to be grounded in the history and just sort of you know what we know rather than what might be in the future but george selgin still makes a couple of appearances throughout the book here and there like he was on the same mailing list as um nick zabo and white eye and a couple of these people so there was the cypherpunks mailing list and then there was also the lipstick mailing list which was a more focused mailing list on digital cash and that also had some of these free banking types on there and they were sort of sharing their their ideas with the you know some of the cypherpunks on there so this includes george

selgin and lawrence white so uh so that that makes a couple of appearances in my book like um hayek's idea of free banking as i mentioned earlier is sort of a big threat throughout my book and there you can see the lineage to how these ideas started to inspire some of the cypherpunks as well specifically through this other mailing list for example yeah that's fast Again, going back to the beauty of like the economic side of things, like the economic theorists really recognizing that the cryptographers were onto something that if they were going to, if they were going to put their economic theory into practice, they're going to have to leverage something that the cypherpunks were building and sort of combining their, their minds to, to really push this forward. That's just incredibly fascinating. All manly, this too. Yes, and this idea is also merged within the Extropian community.

So this was this sort of futurist community that had all of these ideas about life extension, cloning, space colonization, like all kinds of wild ideas, but they were serious about it. And the way they believed it could be achieved was by limiting the role of government in society, essentially. They saw government as sort of a leech on economic activity. And they believed if you just let the government, sorry, if you let the people experiment and if you let the free market reign, we can achieve all of these interesting technologies that would reshape society and even transform humanity itself. and a number of the cyberpunks and bitcoin sort of fathers or you know pre prehistory uh godfathers like halvinny they were also on this extropian list and it was uh halvinny that introduced

digital cash to this list as a way to sort of get government out of your life is specifically sort of get government out of your finances like the privacy angle and then some of the extropians like the founder who's called max moore he's still around by the way he um he he really saw this potential which you just mentioned of leveraging this electronic cash technology not just for privacy but also for monetary reform to sort of realize high x ideas about money that that's that's really something he started pushing for and he ideas he started to spread including to some of these other cypherpunks that were there, which, as I mentioned, included, yeah, not just Hal Finney,

but Y. Dye, Nick Szabo, Tim May, like a bunch of these guys were there and getting these ideas and sharing these ideas. That's interesting. Now that you mentioned that and go through that story, I think we're at the beginning of a similar story with this effective acceleration movement and bitcoin i think there's a lot of people in bitcoin particularly looking at what's going on in the eacc movement which is predominantly being driven by people working on artificial

intelligence and being like hey i think we should uh we should talk i think there's some way bitcoin can play into this and i think our philosophical ideas of where society should be going are pretty aligned and you could see the sort of intermingling of the the bitcoin uh culture and this eacc culture beginning to to collide and really work with each other to to take us to the next step forward sorry i don't know what is this e a e c can you explain uh so it's a play on um effective altruism which sam backman freed was a big advocate of um it's effective accelerationism which is uh there's two competing forces in the world right now those who want to accelerate and those who want to decelerate these accelerationists um aligning more with the uh was it the atropian mailing

list that you described extropian yeah it was a community they had a magazine and a mailing list as well yeah yeah so they're probably the extropians of the modern day um really saying hey government get out of the way we shouldn't create regulatory moats around artificial intelligence so you should let people experiment with this and create their own models um and they're ardently juxtaposing themselves versus those who would like to see regulatory moats and the deceleration of the proliferation of these technologies um right interesting yeah that sounds pretty similar that sounds very extropian they're basically extropians it sounds like yeah yeah and so like it does seem like particularly when you think of things like l402

and uh all the lessons that the bitcoin minus mining industries learn with the energy sector like ai is a very controversial these days but i i use it myself it is certainly useful in many contexts it can be harmful too but all technologies can be used for good or bad you can make the argument at the end of the day what do you use it for like text text image generation yeah we're using it to help curate content on the site and then create thumbnails right right like this will be put through a transcription artificial intelligence we'll have a transcript of this episode within minutes after we plug it in and then other things but like the conversions of bitcoin and ai i think it's symbiotic like i think there's ways you can

leverage artificial intelligence to have something like more efficient channel management on the lightning network more efficient fee estimation softwares then likewise i think bitcoin particularly over the lightning network can make the ai products more efficient where if you want to get rid of your chargeback risk um you're spending a lot of money on the compute just put a lightning network enabled paywall for for compute in front of it um and then again going back to mining the mining industry has learned a lot about the energy sector and ai is obviously going to be energy intensive too and due to the nature of the need for 100 uptime of these gpu data centers in the artificial intelligence arena i do think there's going to be co-location of bitcoin asics that can

participate in demand response and these gpu farms that are looking for low-cost energy and the only way to get that low-cost energy is to participate in demand response and you need the bitcoin miners for that so i think there's a bunch of synergies and right now the two the extropian sphere and the cypherpunk digital cash bitcoin sphere are like a little bit disconnected but you can see them sort of beginning to recognize okay maybe able to help each other out here yeah i mean they're very uh they they share a history not just in the extropian domain i mentioned but you could argue even the very early history like i mentioned i start my book with sort of the emergence of the hacker culture and it actually was at the ai lab of uh of mit so just when computers you know

were first around you got the the first experimentations and the word first idea of creating ig ai was you know at the very beginning was like creating chess computers and that kind of stuff but that happened at the same place where you know um the hacker culture emerged and from there public key cryptography was invented so so it has a common ancestor and it's not a that surprising to see that they would find each other again now or in the future yeah it's like they converge diverge right right it's a beautiful thing and it's important to know the history i guess it's a good point so like pitch the book like why do you think people should understand the context of everything

that came before bitcoin yeah well i mean i am a historian technically and the reason for that is that just in general i believe if you want to understand why things are the way they are if you want to understand why society is the way it is why we have the institutions we have it It helps to understand where it all came from. And I think the same is true for Bitcoin. If you want to understand why Bitcoin is designed the way it is, why it was invented, it really helps or maybe it's even necessary to sort of understand where it came from. I mentioned that, you know, Bitcoin sort of consists of all these building blocks that kind of predates Bitcoin and also the economic ideas that are sort of embedded in Bitcoin. Like it all predates Bitcoin and it was all brought together at some point.

And I do think, yeah, I sort of had two goals with my book, you could say. There's sort of two layers to it. one layer is if you already know a lot about bitcoin then it's hopefully you know interesting to learn where it all came from but also if you don't know a lot about bitcoin i hope that it's a good way to actually understand bitcoin in this really sort of step-by-step way where one step at a time you know public key cryptography is explained the proof of work and then why these guys wanted to create this or where the economic ideas come from so it's a good way to understand bitcoin itself as well i i hope that's that's the goal anyways one of the goals yeah well

if you're gonna learn from anybody in the space i i can speak from experience having learned a ton throughout my time in bitcoin from aaron you should go pick up the book because i i completely agree to know where we are and where we may be going you have to understand where we came from And diving into the history of the cypherpunk movement and all the iterations on digital cash that led to Bitcoin is extremely important, particularly if you're one of those individuals who's new to Bitcoin out there is convinced that it's the MySpace, that it's the first ever digital currency. It's wrong on its face. There is a lot of prehistory that led to Bitcoin. Right. Yeah, yeah, yeah.

Bitcoin is the first one that actually works. It's not the first one. It's the first one that got it right, you could say. And I do think, yeah, that becomes maybe more clear if you read my book. I'm done selling my book. You're not done yet. Where can we find the book? That's the next question.

Oh, well, let me first finish this point. Like, yeah, that is a very common critique of Bitcoin, that it's just the first of its kind and something better will come along. And I do think that if you read this prehistory, then it's clear that no, Bitcoin actually wasn't the first. There were other digital currency projects before it, including some that actually existed, that some people used, you know, like MySpace actually existed and some people use it. But Bitcoin is the first one that's actually succeeding. That's one of the insights you could take away. Where can people find it? Well, it's on Amazon.

It's on the Bitcoin Magazine store. You can also just go to thegenesisbook.com and you'll find what you need there, hopefully. not only is it on amazon it's a bestseller on amazon i checked this morning it it was a for a brief moment in the netherlands for like a day in the netherlands it was the number one best-selling book like on amazon in the in the country that was uh that was pretty ace i didn't expect that like out of all books not just some category but just the best-selling book in the netherlands just for a day but still that was pretty cool we've got i'm gonna take this screenshot and put it logan number one new release according to my amazon account here in the u.s

so it's still got uh we'll put this on the screen so people know what the that's probably in some it must be in some category right development and growth economics that's a good that's a good i'll take it that's a good one to be it the uh while this is uploading anything else that we didn't touch on do you think um people should be aware of are you optimistic about where bitcoin is and where it's going right now yes i i mean i think it's going pretty well i would say i've been kind of um zoned out of the sort of daily yeah you know during the block size war i was very involved with everything that was going every week i was tuned in and i was in every like chat group everywhere

and sort of keeping a pulse on everything i could and then what during the writing of my book i've sort of you know zoomed out a bit so i'm not i'm not very involved in like the jpeg war or whatever the kids are fighting over these days but in general it seems to be doing pretty well to me i i don't see anything uh wrong what do you what do you think yeah i've been i mean i've been keeping my pulse on the space but the uh the jpeg wars as you uh as you call them i've been yeah it seems like noise to me it'll come and go i mean to me like isn't this what the block size wars were kind of about like we have a block size limit so blocks can't be too big and now if you want to stuff them with nonsense well you gotta have to pay for it that's sort of the point of the block

size limit for a large extent so i'm not too worried about that uh as far as i can tell bitcoin is still working a block is still mined every 10 minutes um there's now even ETFs the price is doing pretty well I'm a happy camper Marty I am as well I think maybe most importantly the outside world seems to be getting crazier and crazier

so that plays to our benefit as well right Bitcoin is still Bitcoin is sort of a central point of sanity in a crazy world it does feel like that sometimes to me anyways

that's the way i like to visualize bitcoin in my own mind it's just this like beam of light in the center of a town that we can all access and like anchor into it's just always going to be beaming at the same yeah same pretty much yes exactly yeah well aaron i can't believe it took us this long but i'm happy yeah it was fun to finally be on yeah we'll have to do it again if you're ever stateside let me know come to texas in person sometimes where are you austin yeah I've never been to Austin so I should

at some point you gotta come there's people working on Xiaomi and Mint right behind me literally nice behind the spot

next time I'm there I'll ping you alright you go enjoy your night thank you for thank you for doing this and keep crushing it dude

yes thanks for having me alright peace and love freaks bye Thank you.