The Breakdown - ‘Economics Will No Longer Be the Handmaiden of Politics’: A History of the Cypherpunks

Episode Date: November 5, 2020

Jim Epstein is the executive editor of Reason TV and podcasts, and the producer of the recent documentary “Cypherpunks Write Code.”  In this conversation, he gives NLW a behind the scenes look on the interviews and conversations that went into the documentary, including how the cypherpunks started, schisms in the movement, and how the movement lives on today.  Watch “Cypherpunks Write Code” Part 1: youtu.be/YWh6Yzr12iQ Part 2: youtu.be/n4qonsvSgAg Part 3: youtu.be/lv8OFSWZkGs Part 4: youtu.be/HDKQulqVCQg Find Jim online: twitter.com/jimepstein

I think at the core of their philosophy, summed up by the tagline, written by Eric Hughes, and I think it was Cypherpunk's manifesto was Cypherpunk's right code. I mean, these were technologists, and they believed that technology is the driver of history. Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the Big Picture Power Shifts remaking our world. The breakdown is sponsored by Crypto.com and, nexo.io and produced and distributed by CoinDesk. What's going on, guys? It is Wednesday, November 4th, and today I am so excited to share a

conversation with Jim Epstein. Jim is the executive editor of Reason, TV, and podcasts, and as part of that role, he recently produced a four-part documentary series called Cypherpunks Right Code. It's the story of a movement that laid the intellectual and technology foundations that still serve us today, most notably in the emergence of Bitcoin, as both an economic and a political force. This conversation is meant to serve as a companion to that documentary, and we get to go deeper into some of the stories, as well as the things Jim learned interviewing the founders of that movement. If you are interested in the big ideas that led to Bitcoin and that led to the fight for encryption that we're still having,

you're going to love this, you're going to love Jim's series. So without any further ado, let's dive in. All right, Jim, welcome to the show. Thank you so much for having me. I'm really excited about this. I love the series. I mean, a lot of the content that you guys do is wonderful. But this series in particular, I thought, was particularly relevant for this moment,

certainly for this audience. And so I'm really excited to dive in, hear a little bit more about how this project on the history of the cypherpunks came together and kind of what you learned going through it. But I guess maybe just to start is let's set the frame. When did you start thinking about this? How did this idea come together for you? Well, you know, I guess it was sort of around 2013, I think, that I started to become

totally obsessed with Bitcoin, you know, just like listening to every Bitcoin podcast, reading any book I could get, you know, just the standard story that you hear over and over. again about people kind of like getting completely consumed by a topic. And I did some, I did some projects at reason, you know, about on Bitcoin themes, cryptocurrency themes. But I, you know, I love, I've always loved history. I, you know, read some references to the cypherpunks. I'm trying to remember what it was. You know what? Actually, it was a talk that Paul Rosenberg gave, that his, I think it was like at some Chicago event that his daughter, Hannah, who's a person in the in the space as well, had recorded like on a phone, kind of a low-res thing. And I remember, I think I was,

it was like my kids were at a playground or something, like very small kids at the time. And like I was just on a bench like killing time. They were, they were kind of like doing their thing. And I started and I was like clicked on and I saw it on Twitter or something. And I clicked on and I started watching it. And I totally got fascinated. I was really hooked in. And I ended up interviewing Paul in my documentary. And he's a really interesting guy himself and a novelist. So anyway, that kind of, I started thinking about these issues. And I didn't really know what I wanted to do about the cypherpunks.

I just understanding the root to Bitcoin and understanding also how so many of these, I think I got a sense from his talk that so many of the things that people talk about in today's community have these antecedents, that people were talking about these same issues in the 90s and maybe we're not aware of them. Where did this idea of using cryptography as an economic system or sort of the basis of a new monetary system? Where did that come from? And I was just fascinated by it. So what I started to do without much of a focus, what I started to do is I started to collect interviews. So I didn't have much of an idea, but I remember I was going out to the Bay Area because I was going to do a story, about autonomous vehicles. I was going to go to a conference. It was kind of a, not my favorite piece,

but I did a, you know, I did like a probably like a seven-minute piece for reason on that. And I think I was probably doing some other shoot while I was out there too. And while I was there, I just, I got in touch with Tim May. And I ended up spending, yeah, it's basically tacked a day onto my trip. And I ended up kind of spending a day with him and interviewing him for several hours and recording it. And I just kept doing this. It was on that trip that, you know, I learned a lot in the process of that interview. If I could do that interview at the end of the project, I mean, you'll hear this all the time from documentaries.

I would do it totally different. I would ask better questions. I'd be more informed. But we talked for long enough that I got a lot of good material. And I just kept doing that for a long time. And then I guess it's really kind of within the last year that I decided to, I kind of had a vision for how to weave it into a narrative. It was difficult because basically it's like never do a documentary about like a bunch of really smart guys sending each other emails, which is basically what the cyberbunks is because there's really nothing to show on the screen.

So that was really challenging. And we had reasoned we're pretty autonomous. I mean, if you watch my series, if you ever see a really cool graphic go up, that's actually my colleague Lex, who's who helped me with some very difficult parts. And he's a real artist. But like we, you know, I kind of do it all myself. I edited it. I did all the graphics. It's like so it takes a long time.

And then also my day job is really as an editor. I'm the executive editor of Reason TV, which is our video platform. And that's most of my time. But I would find, you know, an hour to an hour in a day or a little time in a week to kind of, you know, make some progress on the series. I love it. I actually think it makes it's even more resonant as a labor of love, like kind of a, act of individual self-determination to just kind of, you know, piece this thing together over time and let it come into its own being, then as if you guys had sat down like six months ago and

be like, all right, we got to do this right now. There's value in doing things kind of like, it's not like we didn't go out and, you know, we do raise money for special documentaries and projects sometimes, but it's kind of nice to sometimes just do things low budget in the background because it's like you can do it in your own time, you can put the time into it and you can, you know, have it ready when it's really ready. And so that's, that was part it too. I'm going to make sure, obviously, in the show notes and in the article that goes with it, we'll have links to all the four-part series. How would you define the cypherpunk movement? I think Eric Hughes, who was a mathematician and one of the people who was on this iconic

wired cover, it's actually the second issue of wired is, and really kind of one of the co-founders. It was him and Tim May and Hugh Daniel, really, who had the original idea. And in my documentary, Eric Hughes describes the cyberbunks, I think, as cryptography activists. They were people who, they were very excited by the concept of public key cryptography and the potential. You know, there was this complete sea change that happened in the late 1970s in the field of cryptography. Before 1976, the whole cryptography was basically like what you're used to with kids games. Like you have a decoder ring. It's like, you know, A equals Z, you know, and it is like just a code.

And if you had the code, you could translate it. Very simple, very basic idea. And that was kind of how it worked. And, you know, this was also, you could crack the code as the allies did during World War II, which really helped win the war, actually. Now, there was this huge breakthrough in terms of, in 1976, with the discovery of public key cryptography. And then following on that, there was the first public key system.

And basically, this was a way of encrypting information where you didn't need to exchange keys. And the people who were really early in this recognized that it made what we call end-to-end encryption possible. For basically no money, two people could exchange messages and the most powerful, you know, a global superpower couldn't crack it if it was done correctly. And that idea as a technology that shifted the balance of power between the individual and the state, that it was revolutionary. And a few people in the late 70s really, really saw that potential. And I think one of the most important papers in the cypherpunk movement, which hasn't gotten enough attention, although I think it was one of the first, one of the very first things posted to the list is this paper called from cryptography to crossbows. And it really draws this analogy between public key cryptography and the crossbow. And the crossbow as a technology that basically allowed an individual to stand up against an army,

a weapon that like cryptography shifted that balance of power. And this is going to a powerful metaphor, cryptography is a weapon that you'll see, you hear it today. I mean, you'll see it sort of throughout the cypherpunk movement. So they were really interested in the potential of cryptography and especially, see, what had changed by the early 90s was that the Internet had arrived. The cyphobunks were coming together just as the World Wide Web was launching. And they saw that the web as this peer-to-peer communication platform, global communication platform, was the platform on which cryptography could really live up. up to its potential. And they had, they start to have these wild ideas. And, you know, ways in which you could build on cryptography, not just to send secret messages, but of course, it allowed you

basically to have a pseudonymous identity on the internet, a provable identity because you could, you could sign, you basically had a private key to prove your identity. It also allowed you to create a currency system. And the fact that this was possible was also, there's another brilliant cryptographer who's part of this by the name of David Chalm, who wrote a series of papers in the 80s showing that it was possible to build this in basically an anonymous currency system that ran on the internet. And there were a lot of problems with it. It was nothing like Bitcoin. It didn't have the it relied on banks. It, you know, it had all sorts of centralization built into it that Bitcoin doesn't have. But for people like Tim May, the existence of such a system show, he,

He said to me something like, I was like standing on top of a mountain and seeing what was out there. He recognized that this was possible that you could use cryptography as the basis for the bedrock for all of these economic systems that could create a more anonymous and decentralized economy. And that that would be incredibly empowering to individuals. It was just, it was such an optimistic time. In the final installment in my series, I use the fall of the Berlin Wall as kind of a metaphor throughout because it really, that was really the setting. It was like, you know, it was the end of history. Communism is over.

And we have this incredible new technology in the Internet that's going to like make all of our lives so much better and so much freer and kind of edge out corrupt and bureaucratic. a government from all parts of our lives. It seems a little bit maybe, I don't know if naive is the right word. Certainly, it's, you know, it was optimistic in its timeline. But, you know, what really fascinated me as I got more and more into the story is that, you know, these guys are, they were kind of wrestling with the issues, these issues that have become more and more important in contemporary life in terms of, you know, centralization and privacy and so forth. One of the things that really fascinates me about doing history while we're still living through it is it's very hard to piece out things that will seem clear in the future. And especially when you look at kind of the history of the recent history of computers and Silicon Valley and things like that, it feels to me like this is a group that will be noted probably, especially farther down the line, as wrestling with the real power.

implications of the technology, more even than just the technology itself in some ways. And that's why, you know, they came to cryptography on the basis of what it meant in terms of the balance of power between individuals and companies and societies and governments as a whole versus just kind of plotting into whatever new technology was really interesting. And it seems like that's a pretty unique or different thing relative to even so many of these sort of nascent computer communities that were forming in the 70s and 80s. Well, they, I mean, I think at the core of their philosophy summed up by the tagline, written by Eric Hughes in one of it, I think it was Cypherpunk's manifesto was

cypherpunk's right code. I mean, these were technologists, and they believed that technology is the driver of history. And what I heard from many people repeatedly is looking out into the future. in the 1980s, either this technology was going to lead to sort of like a 1984 Orwellian state, or it was going to lead to decentralization and freedom. And the determination of which road we, which path we took as a society had everything to do with the tools that we built. If we, if they could build the right tools, then history would go in the right direction. Super, super powerful and resonant now, considering we're still fighting about these,

exact tools. But I guess maybe before we kind of bring a contemporary, I'd love if you could just mention the first places that this goes from a collective of people kind of thinking theoretically, building maybe businesses around this, to actual real battles. And there are a couple different anecdotes and kind of moments in history that you focused on. I love the stories about Mark Miller trying to go and wrestle all the copies of a potentially banned paper from MIT and distribute them. in the late 70s. But then I think even more relevant in some ways was the battle around PGP in the early 1990s. Maybe you can just set that up because I think it has real relevance for the idea of cryptography as a weapon and as a tool in a different way than maybe we think about

other types of tools. Yeah. I mean, so to understand it, the cypherpunk movement, it was very decentralized. It was sort of, you know, lots of people with different interests, very, very loose. And in that sense, there were all these kind of tangents, all these things that they were getting involved with. So many that, you know, if I could have done like a 50-part documentary, I wouldn't have run out of material, honestly. But one of the most important ones was what you're referring to in the 90s, where there were a lot of cypherpunks, especially John Gilmore, who hosted the cypherpunk email list on his site. And his credit as being one of the co-founders, who was involved in what's now known as. as the crypto wars, where the government very early on, as soon as the public key cryptography discoveries were being made in the 1970s, within the NSA, they got it immediately.

They recognized how powerful a technology this was, and they did not want it getting out. They did not want people to be able to encrypt their own information such that the NSA can't read it. And they tried and failed to suppress the RSA paper. They sent some veiled threats, et cetera. And the crypto wars kind of continued on a little bit below the radar through the late 70s and 80s. But it was really in the early 90s that it took off with the internet, because the internet was the platform that was built for end-to-end encryption. And it was the very first peer-to-peer end-to-end encrypted system for sending secret messages was built by Phil Zimmerman, and it was called Pretty Good Privacy or PGP.

And actually, Hal Finney did a lot of a coding on it as well. And people in the Bitcoin world, everyone will know who Hal Finney is, another seminal cipherpunk. I mean, it's hilarious. It's great how it's like, you see just the same names popping up all the time in these different context because it's not a huge community. A lot of people were on the email list, but the people who were actually drivers of this movement, you know, it's a bunch of, it's really a bunch of guys living in the Bay Area who kind of all knew each other and liked each other a lot too. Anyway, so PGP, you know, it made possible end-to-end encryption. It made, it sort of is, I mean, I guess I think of it is almost like

it's sort of like what we have with WhatsApp today with end-to-end encryption. You could message someone on the other side of the world and it was private. And that was kind of an incredible thing. Not nearly as easy to use is what's at. And the government really, really cracked down on this. And shortly after the software was up, there was a Department of Justice investigation. They were looking into bringing criminal charges against Phil Zimmerman on the grounds that he had exported munitions because cryptography going back to, I think it was actually a, it was an update of a 1954 law passed in the 60s was classified as a munition because it had been so important in World War II in helping to defeat, you know, the Nazis and the Japanese in terms of breaking

the enigma messages. You know, this is an important part of World War II history. And the intelligence community sort of saw cryptography as ammunition. And it was really Gilmore, who's also a co-founder of the Electronic Frontier Foundation, which is the organization that does more than anything now to protect the right to encryption and so forth, who was fighting this legal and public relations battle to protect our right to use public key cryptography. And one of the tactics they use, one of the legal arguments they used was code is speech. If you can write it down as you can the source code for PGP, if you could print it out in a book, it's speech and the government can't ban it. And they came up with all of these really ingenious stunts to make that point

and to kind of force the, to back the government into a corner, into a rhetorical corner. So Zimmerman convinced MIT press to print. out the source code for PGP and to sell the book in European bookstores. So they had just exported PGP, right? It's exported ammunition, but it's a book being published by one of the most prominent academic publishers, which actually is also important in the cryptography world in various ways as well. How do you argue with that?

How do you – I mean, it was kind of a brilliant legal tactic. And then you also see an Adam back was also involved with this as well in terms of like a t-shirt, which had the code for PGP. You know, am I ammunition? Or if you put code on your, if you tattoo, you know, PG encryption code on your arm, you know, what, so basically that was the idea. That was the point. And I think it's like you can actually, it's relevant to the Bitcoin world today too, because it's like, If it's illegal to send someone money, what if I write down, you know, my keys on a piece of paper and I hand them to someone? You know, can the government legally stop me from doing that or for publishing that?

That might be a fight for the future. But there are obviously, you know, when you're talking about cryptography, the idea of money is speech or is obviously still relevant to this history of the crypto wars. And, of course, the crypto wars are still ongoing. I mean, it's one point that I'm making my documentary is like, you know, Bill Barr is saying the exact same thing that the FBI director Louis Free was saying in the 90s. You know, we need to build him back doors. There was this huge fight over building something called the clipper chip. It's all the same idea. It's basically require software makers to give the government a way to read your messages if they want to, basically weakening the security.

And so far, cryptographies remain legal. We're winning the crypto wars in that sense, although in another sense we're losing as well. So it's a complicated matter. Yeah, and Bill Barr is certainly another level of opponent in terms of how big an issue he's decided to make it. And I think a lot of people, what their worry is now is the dramatic shift in public sentiment against tech creates a potential political opening, you know? Absolutely. Yeah, that's true. This episode is brought to you by Crypto.com, the Crypto Super app that lets you buy, earn,

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Not to mention, the APR starts at just 5.9%. Stay on top of your investment game with nexo.io. And remember, it's your crypto, your credit, your choice. Get started at nexo.io. The other big theme, or one of the other big themes from across the series was this sort of schism and rebirth in some ways. And obviously, it's important that this is not like a group that sat down like students for a democratic society or something to like write their manifesto. It's this sort of loose assemblage. I mean, it's the idea of decentralization kind of put together.

But you kind of define these two different subsexuals. who had maybe different ways of looking at the world and how they started to kind of drift apart before eventually kind of seeing a reboot around Bitcoin. Right. So one of the sort of one of the arguments of my of my series is that a debate that happened, a disagreement that happened by between two guys who were really friends and liked each other a great deal, Phil Salin and Tim May. And this happened in 1987. So that, that their debate over how these tools, and they weren't even yet talking quite about cryptography, they were actually talking kind of about the internet, but I think it applies,

how these tools would lead to more freedom and would have a real impact on the world, that you can sort of see that argument, shades of that argument still in today's cryptocurrency space. So basically what happened was Phil Salon, who's another one of these really important figures in all of this, and he was an economist and an entrepreneur and a follower, of Friedrich Hayek and someone who had like a lot, he just had this circle of people who were around him all the time because he was absolutely brilliant and people just kind of wanted to be in his group. And he had come out of this private space industry. But he had this idea for building what he called the American Information Exchange, which was a basically an e-commerce site for selling

expertise. And his idea was like this would help to solve the knowledge problem. He saw, he saw in the context of Hayek's work, you know, Hayek was, you know, one of the best known Austrian economists, and he wrote a series of papers about sort of the use of knowledge in society, the importance of local knowledge and expertise and the decentralization of knowledge. And Salin had this idea that, well, if you had something like, I don't know, one example they gave was a guy wants to invest in the Palo Alto real estate market. So he contracts, he finds a local expert who really knows about it. He can find that person on Amex.

He can hire that person and negotiate a contract with that person. And it sounds kind of banal today, but it was totally revolutionary in the idea that this could be all over the world. And it did not run on the internet, actually. That's the wild thing about this moment is that it's easy to see or kind of see like, oh, yeah, people have been trying different versions of that for a long time. You can see a little e-commerce in there. We're talking about, you know, a, like a half decade or more before the commercial internet, the World Wide Web, I mean, more than a half decade before the World Wide Web, like these things were, I mean, this talk about being before your time, right?

Yeah. And I mean, in Silicon Valley, I know they say that like there's no bad ideas. There's just bad timing, right? So it's like Salon was, I mean, he was too forward thinking. He was, his Amex was coming out and he actually died in 1991, just as the worldwide. Web was coming was coming out, which so the timing was bad in that sense. But yeah, I mean, you know, people, we forget now that there, in the late 80s, there was CompuServe.

There were these services you could dial into and you could post to Bolton boards and there were kind of like Usenet groups and you could order stuff from the electronic mall. And like it was the beginnings of the internet and the people who were around Salon who the Austrian school economist Don Levoy dubbed the high-tech Kayakians, a phrase that I like and that I kind of stick with in the documentary. They really, they saw where this was headed, and Salon was really excited about it. So he built this system called Amex, and he didn't just dream it up. Like, they built Amex. I actually, I got a friend's dad to help me resurrect an old computer, and I borrowed some discs.

and I actually ran Amex, and I played around with the software. It's amazing software. He got Chip Morningstar, who is a brilliant software architect to oversee the thing. So it was the real deal, and it ended up not really taking off, obviously, but it's important still. Amex is important in part because in 1987, Morningstar introduced Salem to his friend Tim, Tim May, and May, Sailing gave May a demo of Amics. And May was like, this sucks. Like, this is totally uninteresting to me.

Who cares about your surfboard recommendations? He said, I know what we actually have to build is a e-commerce site for stolen corporate information. And we're going to make it private so that the government. government can't shut it down and it's going to sort of like undermine all of the establishment through this system. And it's going to be totally anonymous. And Salin, they ended up having this huge back and forth, some of it over email. And I tried, Salon's widow, Gail Pergamon, who I interview and who is an entrepreneur in her own right and really was kind of his partner

through all this. We tried to get, find if we could find this correspondence on old computers, Salens, and we couldn't, so it's lost. But they had this huge back and forth about sort of like this debate between what May called a blacknet and Amex. And this is important in part because this is what led May to get really interested in cryptography because he said to Salin said to him, hey, there's a problem. How are you going to pay for anything in this secret marketplace? Because the only anonymous form of payment is cash, and you can't shove cash through a computer screen. So how is this even possible?

And, you know, May was like, okay, you, that's a point. I think he toyed with like, okay, well, you can leave cash in a locker. And then you can tell someone online where the locker is. It's like, okay, that conceptually will work, but it's totally not practical. And then May was like, you know, I feel like, I know I've read something about this. and he went home and he mulled on it for a couple days, and then he pulled out of a stack of magazines, his copy of communications of the ACM,

which is a really important engineering journal in computing circles, and he found a paper by David Chom describing his system for building an anonymous payment network, which Chom would later try and commercialize to something called DigiCash. But anyway, May saw the flaws in DigiCash, but he's like, okay, this is what's possible, and cryptography is the key breakthrough. And that's what got him interested, and that led to the formation of the Cypherbuck movement. But beyond that, I think that you see this idea, Salon's theories about how technology could bring change

sort of by exploiting the gray areas in society. So it's like, you know, you could do all kinds of, who knew if what Amix was doing was legal. But the fact is that there were these gray areas and the government wasn't going to step in, even though they could, they weren't going to. And sort of by exploiting those gray areas, that is the kind of the fulcrum for change in society. While May wanted to build these little gults, gulches in the world that were cordoned off from the rest of the world. And I think that this paradigm, and it's real, I have to mention Mark Miller as the person. who was friends with Salin was one of the high-tech kayakians and is really kind of like the theorist, partially because he outlived, you know, Salin died very young in 1991, and Miller

wrote all these seminal papers and really fleshed out this idea. And Miller, of course, is still in the industry. He and some of the other Amex vets now have a startup called a GORIC, where they're trying to build a smart contracting system using JavaScript to build security into smart contracts. So they're still, you know, these, they were very young at the time. And you find this over and over again, including people like Zucco Wilcox, you know, the guys who were involved with the, at David Chom as well, who I wouldn't call Cypherpunk, but is seminal. These are guys who are still in the industry who you'll still bump into in conferences. But anyway, the May versus Salin, Blacknet versus Amex, I think, is an interesting metaphor.

metaphor that can be carried forward. It doesn't explain everything. I don't want to overstate it, but I think it's an interesting tension. It's a real, I mean, it's a, it's a real interesting theory of change debate. And I think that it has relevance now in some ways as, I mean, there was a great tweet this morning where someone, I think Matt Corallo was asking, are we at the beginning of seeing the government try to shunt the world into legal KYC Bitcoin? and illegal Bitcoin. And your take on how to fight that, you know, how to work with the government around KYC, this is a major schism in the Bitcoin in the crypto world for sure as well.

You know, and I think it gets to some of the same issues about how kind of integrated into the existing system you can be without losing the actual fulcrum for change to use your words. And what tools, I mean, the question is, you know, what tools are you going to spend your time building. So on one hand, you have Blockstream building a, you know, a Bitcoin satellite network so people can transact Bitcoin without having to go through a government monitor internet, right? Which I would put into the blacknet, a bucket of things. Or you have, you know, like a Coinbase, which is totally regulated and complies with all regulations, but is, you know, make, it does done a lot for making Bitcoin easy to purchase.

and, you know, really could be argued, really accelerated adoption in many ways. So which is the best path to, you know, to enabling change? And if you believe, as the cypherpunks did, do, that cypherpuncts write code, tools, the tools are what matter, then these questions of what you spend your time building are really important. Well, so that brings us to, I know there was many ideas that you. couldn't fit into the constraint of the documentary format. And one, you recently wrote an actual piece on that maybe we could talk about a little bit. Sure. So, yeah, I mean, the piece is kind of structured around what I was just talking about, looking at how the Miller-Salin versus

May debate and how you could apply it to the current industry. And I start by talking about Katie Hahn, who's a, you know, a general partner at A6, Injason Horowitz, A16Z, which is one of the premier Silicon Valley, VC funds. And, you know, she came out of the Department of Justice, was involved with the case where she wasn't working the Silk Road case, but she actually prosecuted the corrupt agents who were working on the Silk Road case. And, you know, she's all the way over to one side. I don't want to associate her too closely with Salon because, you know, she has a lot. You know, Salon was a radical libertarian. And I don't know Katie Hahn. And I didn't interview her.

I'm assuming she's not. But you, but when you hear, she's also on the board of Facebook's Libra. And if you read the Facebook Libra white paper, they talk about things like, you know, basically making the movement of money more efficient and reduce. transaction costs and so forth. And if you read Salon stuff, that's what he was talking about with Amex. That was the idea. Like, you could, that could be a real doing that kind of thing, even if it's regulated, even if it's not perfectly, well, of course, nothing is perfectly secure.

But even if it's, you know, there's a lot of security holes in it. Still, it can have a really big impact on the world. And then I contrast her with someone like Pierre Richard, who's one of the Bitcoin maximalists. And he had a tweet that I liked, which is like, I wouldn't be interested in Bitcoin if the government weren't trying to shut it down. And the people in May's camp aren't only the Bitcoin maximalists. But I think they fall in that camp as well because part of their whole idea is like, why is Bitcoin better than gold? Well, government can seize the gold. Gold is physical and sits in a warehouse. Bitcoin is virtual. Government can't seize all the Bitcoin.

And that's kind of, that's key. It's like, as Savedina Moose writes, like, Bitcoin is orthogonal to the physical world, to the government. Like, it can't, and that's kind of a key idea. And that I sort of I associate with May. In the article, I also get into the topic of smart contracts, kind of a disagreement over what is the definition of a smart contract? And this was a little, bit too, I couldn't find a way to tackle this in video again because like my graphic skills aren't up to it. The visual, it's just not a visual topic unless you're doing like a, you know, like a explainer video, which I didn't quite want to do.

But, you know, Amex Chip Morning Star and Mark Miller say, call Amex the first smart contracting system. But it's not like, you know, Nick Zabo, who coined the phrase smart contract. He talks about like a vending machine as being a simple way to understand a smart contract. It's like self-executing code. Well, Amex was a, you know, was a company that could have conceivably interfered in the contracts between a buyer and a seller on Amex. And I should have explained that was the idea.

Like on Amex, you enter into a negotiation with someone. It's a peer-to-peer network. It's like you find someone who wants to help, you with your problem and then you negotiate and there's a software aspect to it and there's a written aspect to it and it was very elegant the way they did it but then you know the money the payment executes through the software which happens all the time now but was pretty new at that time and and that was the first smart contracting system in their in their mind and then i use an essay that I like a lot by Jimmy Song talking about how this is bullshit.

Like the only smart contracting system. And he's not writing about Amex at all. He's responding to other contexts in which people have used the phrase smart contract. And, you know, Song's point is like actually smart contracting only works when there's a digital bare instrument. Because if it's connected to something in the physical world, it doesn't work. And you see this idea all the time. Like a lot of people have been excited.

I've been excited at times about this idea of like a land registry on a blockchain, right? So you're registering the land on the blockchain. So the most important function of government is to keep track of who owns what land. And most governments do a terrible job of it. I probably shouldn't say most, many governments do a terrible job of it. And there's all sorts of corruption and theft. And famously, the Peruvian economist, Hernando de Soto, wrote a book arguing that, like, that is the source of a lot of third world poverty, the fact that there's these insecure property rights. Well, we can fix that with a blockchain.

Actually, DeSoto is involved with one of these initiatives now. And someone like Song would say, no, because what do you do when an army shows up? Like, show them your blockchain and they're going to respect that? No, because it's physical. And it's not in this little gulch, which is cordoned off from the physical world. So in response to that, someone like Mark Miller would say, well, the existence of the record itself has a profound impact. And actually it was a line of Zabo. Zabo put it best when he said, while fugs can still take physical property by force,

the continued existence of correct ownership records will remain a thorn in the side of usurping claimants from his ninth. 1998 essay secure property titles with owner authority. So the idea is like it still has an impact. And it's again, it's like this idea of like the gray areas or like practically speaking, it does have an impact. And governments that come in and ignore written records when they exist, they're a big cost. And often they won't do it.

So again, it's like you can keep sort of like applying this Salin Miller versus May paradigm to a lot of things in the contemporary crypto industry. That's my argument, basically. Super, super fascinating. I love it. We'll have to make sure to link that one too. Well, listen, I think this is so fascinating. I mostly just want to get people to go read or to watch the series.

I think a lot of folks will if they haven't seen it yet. But I guess, you know, as you reflect on this, how did the process of having all these conversations and bringing it all together, you know, change the way that you think about the contemporary battles or challenges that we're living through. And I guess maybe, you know, one part or way to contextualize that is the show is going to be, it's being recorded before the election, but it's going to be released just after the election. What do you think about the battles that we're going to face around encryption, around Bitcoin, around private money, you know, in the administration to come?

I mean, you know, Democrats are just as bad as Republicans on this issue. There's every reason to believe that when, you know, if Biden wins and Barr is no longer Attorney General, that the next Attorney General is going to be just as bad. So it's like Jonathan Roush, who wrote a great book on free speech, I think one of his lines is like, you know, the battle for free speech will never be won. We're constant, it's such a like counterintuitive idea. like we're constantly going to need to be fighting that fight for free speech. And I think it's like the crypto wars are never going to win, never going to end.

They're going to be ongoing. And in a sense, like what I see coming, because I'm a Bitcoin optimist, I think Bitcoin is just the most important technology of our time. I'm, I totally sympathize with all the people on Twitter say like imagine living in this world without Bitcoin. Like I feel the same way. It's it's what gives me hope. And because I think that Bitcoin is going to. going to become more and more important and replace a lot of fiat currency over time, I think that the crypto wars are going to heat up. And that, you know, I feel like it's, this is, this is just the

beginning. We've seen nothing yet. And I, I guess from doing this series, I've come to see, like, it is just part of this long battle that really begins with Diffie Helman and the discovery of public key cryptography. Like, that's the beginning in 1976. And, like, it's going to be a long road. But, you know, I think I'm ultimately optimistic. Like, I think that it's just, you know, I think that the tools that people are going to build are going to ultimately prevail. But, yeah. Well, I love that sort of optimism in that skepticism, I guess, or concern all wrapped up into one. But for now, Jim, thank you so much for hanging out with the crew over here today. Really great work on the documentary. Love watching it. Love getting to have this conversation.

And I hope everyone goes out and watches it right now. Thank you so much for having me. History is hard to see when you're living through it. And I've spent a lot of time with early technology and internet history. What makes this group so different and special is that they were thinking before so many others about not just the technology itself, but about the real social and political implications of that technology. These battles, of course, aren't over. I've talked frequently on this show about Attorney General Barr's war against end-to-end encryption and what it means, and as you've heard through the last half hour, that's a battle that started many, many years ago. The cool thing is that now there's a new set of people ready to pick up the mantle, ready to have some of those fights.

whether they be more high-tech hyacians or crypto-anarchists. There's a lot of new energy, and I'm excited to be bringing you some of those early foundational ideas through this show. So I hope you enjoyed it. I hope you go and watch the show on YouTube as well or the documentary series on YouTube. I'm confident you're going to have a great time with it. So until tomorrow, be safe and take care of each other. Peace.