The Pomp Podcast - #1142 Michael Shellenberger | Bitcoin Debate

Episode Date: January 4, 2023

Michael Shellenberger is the bestselling author of "Apocalypse Never" and "San Fransicko." He also is the founder of Environmental Progress. In this conversation, we discuss bitcoin and why we don't see eye-to-eye on it. Topics include common core values, confiscation of wealth, security of assets, use cases for bitcoin, and Cyprus banking crisis.  ======================= With a Messari Pro subscription, you gain access to exclusive industry-leading long-form daily research reports, daily crypto news & insights in your inbox, advanced asset screeners, curated sets of charts and metrics and so much more. Try Messari Pro today! Get up to 25% off their Messari Pro membership by visiting www.messari.io/pomp and entering promo code "POMP" at checkout. ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Michael Schellenberger is the bestselling author of Apocalypse Never and San Francisco. He also is the founder of Environmental Progress. In this conversation, Michael and I discuss Bitcoin and why we don't see eye to eye on it. I really appreciate Michael's views on a whole bunch of topics, but him and I have different views on Bitcoin. And so we thought it'd be very interesting to jump on and have a civil conversation. What he thinks, what I think, counterpoint and counterpoint. I hope that you enjoy these types of conversations because I

really enjoy having them. And the beauty of America and free speech is that we can have conversations with people we disagree with, and then we can fight like hell to protect what they're allowed to say, even though we don't agree with them. Here is my conversation with michael schellenberger this episode is brought to you by accenture when your advertising operations fall out of sync everything else follows spotify and accenture are working together to reinvent the rhythm of ad sales using automation analytics and smarter workflows to simplify campaign delivery and access better data across the business the result less time spent on operations more time connecting brands with the moments and fandoms that matter most learn more at

center.com slash Spotify. Ready to take your investing knowledge to pro level? This is Fidelity Connects, your daily edge in the markets. Get deep insights on real time market topics that may impact your investment portfolio. Listen to Fidelity Connects on Spotify today and power your next move tomorrow. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, guys. Super excited. I've got Michael Schellenberger here with me.

Michael, you tweeted out and said, hey, I want to come on and talk about Bitcoin and cryptocurrencies with people within the industry. And I thought a great place to start would maybe just be like, what is your current understanding, maybe positive or negative, about Bitcoin and cryptocurrencies? Yeah. Well, first, thank you for having me on. I am someone that cares a lot about public policy, and that means I care about having good conversations and discourse and also being able to talk with people that I might disagree with, which is what I think the case is here. And, you know, I want to depersonalize it because I do think, I suspect that you're a Bitcoin investor. Correct.

Do I have that right? Of course. You know, and so like, you know, I want to depersonalize it and just take it that kind of a public policy perspective. You know, I think it's worth asking whether I'm a Bitcoin investor or a cryptocurrency investor. I'm not. And although my son and wife bought a little bit of Bitcoin, but it's such small quantities that are sort of trivial to even mention.

But yeah, I mean, my view is probably pretty close to Elizabeth Warren. I am viewed as, you know, people on the far left think I'm pretty conservative at this point. I think of myself as a moderate on a lot of different issues, actually. but on crypto i don't think that there's a purpose to it um i don't at this point i don't see any reason it should be regulated because i don't think it's like a real thing um i think it's basically a pyramid scheme built on top of a criminal you know digital enterprise built on top of a kind of beautiful digital art project um so let's let's unpack a little bit of this right because i think it's uh very that's my core view okay that great starting point um one of the ways

that i always uh kind of start these conversations is like forget bitcoin blockchains crypto kind of the whole nine yards and if we just think of like the legacy financial system uh my guess is that we probably have some common understanding and common thoughts. I actually think even the Elizabeth Warren and kind of her perspective, a lot of people arrive at maybe three core beliefs. The first is that the average American citizen is worse off financially today than they were in the past from a purchasing power standpoint. So inflation has been eating away at people's purchasing power. Why? Up for debate. But definitely they have less and less purchasing power kind of over time. There's proponents of minimal inflation that would argue, hey,

we need kind of two percent inflation because it is able to stimulate economic activity. It's able to stimulate velocity of money. And so a little bit isn't that bad. But I think that's kind of one core belief that a lot of people both inside and outside of the Bitcoin community have, which is this like loss of purchasing power. And I'll come back to that in a second. The second thing is I think that there are a lot of folks who look at the legacy financial system and they say various players, whether they are oversight organizations, whether they are the major banks, whether they are individual market participants, they are doing things that run counter to kind of the benefits of the whole. The opportunity isn't evenly distributed and

people aren't able to actually, you know, kind of have a fair shot, if you will, in that financial system. And I think, you know, Elizabeth Warren's probably been one of the biggest proponents of critiquing Wall Street and the various banks and things like that. And then the third thing that I would say is, I think most people would raise their hand and say, yes, I believe in the US Constitution, right? And kind of all of the things that that encompasses from freedom of speech, private property rights, and those things that tend to be, you know, I'll say non-controversial, but I'll caveat it with like, I'm sure someone somewhere has a problem with the U.S. Constitution, but it doesn't sound like you. And so would you agree that like those three things are probably

common ground when it comes to, you know, before we get into the Bitcoin conversation? Yes. Okay. So the reason why I start there is I look at Bitcoin very differently, right? Than most people, or maybe publicly it appears, where there is a very large portion of the Bitcoin community that looks at it as a speculation tool, right? Kind of to your point is people are saying, hey, if I buy this and I close my eyes and I wait for a period of time, the price is going to go up and I'm here to get rich, right? Right. My wife and son. okay and and look if i'm really honest i think that to some degree like that speculation component

is true in all financial assets right there's even people who buy their home and they're like look i need a place to live but also i'm buying this one because i think it's going to go up in value right so there's definitely me right there okay yeah so 100 there's a bunch of people who i think uh are buying bitcoins and don't even understand really what it is they just think can get rich quick right well yeah or you yeah more generously you think it more generously you just think it's a valuable asset i mean if i'm being nicer to um i've teased them because of course they lost money um but um it's more like yeah some people that views their garage quick thing some people may view it as like a long-term asset to hold like gold which i suspect is your

you. But there's other people like me who just think it's a digital art project with a crime, an easy way to money launder built on top of it with a pyramid scheme built on top of that. So I think that, you know, I appreciate starting with some core values, which I totally share with you. I'm sure you and I share a lot of core values. I think there's an ideological agenda here too which is basically um anti-statist and i know this because um um someone who i have a lot of respect for uh uh balaji uh you might say last time right trini vasan correct um uh and i as soon as we met we started arguing about cryptocurrencies balaji wasted no time he just gets right i know i mean i'm i'm not a phd in libertarianism but i feel like i have a like a

pretty solid bachelors in it um and there's some of the ways in which it's different from classical liberalism and from libertarianism but i mean um or i'm sorry from like randianism but um you know i mean i think that there's a kind of a i think there's a sort of it's not a values difference because i think we all value public safety and and freedom and democracy um you know there's still a kind of I think there's a libertarian fantasy that is tied up with seasteading that's tied up with a kind of idea of getting away from the nation state that I think is absurd because I think it doesn't deal with Hobbes it doesn't deal with just the reality of the human animal and the ways in which we um that it's just the strong preying on the weak unless there is a

decentralized uh state to protect the vulnerable so i mean you know i think there's that going on but i ultimately just kind of go i don't think there's i don't think it's a very important i don't mean to be mean about it but i don't think it's also even very particularly important except for the fact that you get the pyramid schemes and the crime and on the crime stuff i kind of go well i kind of part of me agrees with the classic crypto point which is just that people use cash. They use fiat currency to borrow your language to commit crimes. That's true. I do think digital makes it easier to money launder. And then there's the pyramid schemes. So in some ways I go, the real question for public policy is just whether it should be regulated. And now

having spent some amount of time looking at it, and I wrote two pieces, both of which I think are very accurate and got at the issue around SPF and FTX, you know, you sort of saw somebody who was very close to getting regulations that would have helped him. And so I am skeptical of regulating it in part because I don't think that what is called cryptocurrency is a currency. I think there's only national currencies or what you would call fiat currencies. I think everything else is sort of seasteading libertarian bullshit with kind of mafia criminal money laundering built on top of it and pyramid schemes built on top of that and the only real public policy issue is just to warn people okay you know that this is going on there's not much otherwise i think you're just otherwise

you know i don't think there's so i don't think there's like a regulatory agenda i just mostly kind of think it has to be kind of denounced so that's where i kind of come out okay so let's um Let's kind of dig a little deeper on this. The reason why I start with kind of the common ground on those three beliefs is that my personal belief, and I can't speak to anybody else, but my personal belief is that Bitcoin specifically, if you take Bitcoin away from all of the other cryptocurrencies, which I would actually agree with you, many of them are not currencies. They are Ponzi schemes and all kinds of crazy nonsense, whatever, right?

We're talking about something that is, by almost every single person who looks at it, Bitcoin is decentralized, right? Meaning that there is no one person that controls it. there is no one person who can make unilateral changes. It's very different than kind of these centralized either currencies or organizations. Bitcoin actually embodies and codifies the American ideals better than any technology in the world. And I'll give you kind of two examples. The first is when I talked about free speech and the ability to kind of have the protection of the U.S. Constitution, in the financial system today, you do not have free speech, right? There are many court cases that prove that software is free speech and all this

stuff. And so, again, there is reasons why people will argue you shouldn't have the free speech, you shouldn't be able to do what you want with your money, whatever. But I think that Bitcoin ultimately says, although you may be sympathetic to a government or not, anyone in the world is able to send economic value to anyone else without asking permission of a third party. now in the united states actually i would argue we've been pretty damn good about protecting people's free speech and allowing them to conduct economic transactions as long as we didn't deem them to be financing terrorists or money laundering or kind of breaking the rules right for the most part you or i can go to the atl we can get money out we can go and buy stuff we can swipe our

credit card we can send money to people around the world and like we kind of go about our day other people around the world you know in fact hundreds of millions if not billions of people can't do that. And sometimes that's because their governments are kind of oppressive. Sometimes that's because there are companies that are doing things that, you know, either take value from them, stop them, whatever. Or it could actually be because their currency is inflating so quickly. If you look at somewhere like a Turkey, a Zimbabwe, a Venezuela, whatever, where literally the prices are changing in the store on an hour to hour basis, right? And so it just makes it nearly impossible to be able to express your economic view if literally the price

change on a day-to-day basis. So I think that's like one piece of this Bitcoin story is the ability to take the ideal of free speech and codify it in a piece of technology and then hand it to anyone in the world with an internet connection, right? The accessibility of this is a kind of a key component. The second thing is this idea of private property rights. So if I was to ask you, you know, what property do you own? You would tell me a list of all the assets that you kind of have on what would be the equivalent of your like personal balance sheet. You say, hey, I maybe have a house, I've got some stocks, I've got some cash, I've got whatever other kind of assets you own. But if you actually go and you break that down, the odds of you being able to defend your personal property is very, very low.

For example, if a bank was to say to you, we're not going to give you your dollars back, you, yes, do have a legal path. You can go to court, you can go and try to fight it and do all this stuff. But what we've seen is in many countries around the world, Cyprus back in the 2012-2013 time frame is kind of the quintessential example that Bitcoiners point to. They basically just said, look, we're just going to tax this because we need it. And they were able to take that currency, that hard-earned economic value from citizens without any kind of real rhyme or reason or legal precedent. And so if you then were to go and say, well, let me look at my house, for example, there are people who lose their homes every single day. And sometimes that is because of actions of their own. Sometimes that is actions of other organizations. And sometimes there's things like eminent domain, where literally pieces of their personal property are then confiscated by the government. And I don't think that this is so much a anti-government view, which, again, there are definitely people in every community, right? There's literally people on both sides of the aisle who think the government is bad or whatever.

But I do think that this is very much an individual rights story. And if there's one thing that we've seen over time in this digital era, it's that individual rights are being decreased rather than increased. and sometimes there is a strong argument for why that's happening kind of the greater good and kind of all of those those different points but when it comes to your ability to have freedom of speech and express your views without being inhibited by governments organizations or other individuals and then also the ability to own and defend your own personal property i would argue that in the digital realm bitcoin is the only asset where you actually have ownership of an asset that is not subject to other organizations governments or other individuals who can then come in and unilaterally confiscate it without your uh kind of agreement yeah but but i mean just okay well

let's take there's i think there's i heard two um arguments there one is bitcoin is more secure than other forms of wealth. And that's in part because governments can confiscate it. And you gave the example of Cyprus. Now, that Cyprus example is really interesting. I mean, it really only dawned on me when you started talking about it now, because it sort of goes, the story that you sort of tell goes, well, you could have your assets taken just like they did in Cyprus. And that shows that your assets are not really secure in the bank or in some financial institution without ever looking at like, well, why did Cyprus do that? And Cyprus did that because, of course, they wanted to avoid a financial crisis. So avoiding financial crises is like

avoiding catastrophe. I mean, it's like avoiding a hurricane or avoiding the collapse of what just occurred in Sri Lanka. But should individuals have their hard-earned wealth confiscated to pay for the sins of their government or their central bank? Well, I think that's a kind of values question. Before you get to it, there's a more interesting, I think, practical question, I come from a long line of pacifists, and some members of my extended family and certainly the members of my family in the past would say, wait, why should I have to go and die and fight and kill in a war that I did not create? Why am I responsible either for going to some other country to fight or having to defend my own country physically? I didn't sign up for that. And I actually have a lot of I still have a lot of respect for pacifists.

It's a super courageous position because the result was often that you would end up still being sent to war, but not with a gun. or you'd have to or you'd be basically you know imprisoned or persecuted or tortured or killed or whatever because of your position so when i i can respect the honor and courage and having an anti-government position that says why should i have to defend my country physically or why should I have to spend my money defending my country from a military attack or a hurricane or a financial crisis. But that's what nation states do. That's what it means to be a nation state is that you conscript your young men to defend your territory and you're going to confiscate your people's wealth to defend yourself against a financial crisis. That's what every nation state does. If it doesn't

do that. It's not a nation state. So it's an answer. So the whole Cyprus example, you know, and it's preying on a kind of ignorance of people, because it makes it sound like the Cyprus government was just whatever, as opposed to like, no, actually, there's a whole context there of why the Cyprus government did that. Now, in terms of the security of Bitcoin, I mean, I find the other thing as a newcomer to this space, sort of shocked that that whole rap that you just gave never mentions the fact that that dude lost $127 million of Bitcoin because he left it in his car. I mean, Bitcoin is as secure as gold. No, but that's like saying, I always think of the security of an asset as the further away from the spigot, the less secure it becomes. So I'll use dollars as an example, then I'll use Bitcoin.

The dollars answer the Cyprus example while you're at it. Yeah. So the dollars that are created, you know, Treasury, Federal Reserve, like the Treasury has never been infiltrated, hacked, robbed, anything like that. Now, when the dollars leave and they go in a physical truck and they're driven somewhere, there's plenty of armored trucks that have been robbed. And when it sits in a bank, there's plenty of banks that have been robbed. Right. And then if you have the dollars in your wallet or your pocket, you walk down the street, someone hits you over the head with a wrench. They take the money from you as well. So the further you get away from kind of the creation point of the currency, the less secure it becomes. That's dollars with Bitcoin. Same thing.

The Bitcoin blockchain, where the actual Bitcoin is held in terms of this public ledger, that is not ever been hacked before. Now, if you go and you put your Bitcoin on a physical hardware wallet and then you leave the hardware wallet on the counter at McDonald's. Right. Or you leave it in your car and someone robs your car. then yes of course but that's the same thing as if you left the five dollars you know sitting in your cup holder and you left your car unlocked right so the further you get on that let me anthony let me pause on that okay because if i if i lose my because of course the big case for bitcoin and other you know digital assets is that they are more secure for example than having your money in a bank but the only example that you have is cyprus and i'll let you get to that because i

interrupted. But the other example is the credit card. Well, I mean, if I leave my credit card at the supermarket or at the airport, and of course, I've done that many times, as most of us have, and somebody picks it up, this has actually never happened. But if somebody picks it up, and they start spending on it, the credit card company will actually, at this point, I believe they do not hold me accountable for it, especially if I call right away. And I'm like, I lost my credit card. They're like, they put an end to it, whatever. That's a much more secure digital asset. so so so in that case given that like a credit card versus a hard drive with bitcoin or some other um digital asset on it clearly the credit card is more secure but but it's not left with

but it's not because the credit the credit card is not an asset right the credit card is you're spending someone else's money and they're just saying you don't have to pay us back but it's not actually more secure whereas with bitcoin yeah so with bitcoin if let's say i put on a hardware wallet and I leave it in my car and you take the hardware wallet, you have the hardware wallet, but you don't have my Bitcoin because you still need the private key. Right. And if I just have the private key in my head, then I still own that Bitcoin. Unless you have the private key, you don't have the Bitcoin. Right. That might be that might be fine. But I think the point is, is that like my assets in my bank account are really freaking secure. They've been they're

more secure than Bitcoin. They're more secure than cash. They're more secure than gold. like there's no there's no real now my you know both of my parent my both sets of my parents have been scammed recently um and it was like annoying but like they didn't like lose like a significant sum of money and when that happens usually there's some sort of lawsuit or some sort of reconciliation the bottom line is that we have more secure our assets are more secure than they've ever been at a physical and technical and and and monetary level in human history so bitcoin doesn't neither bitcoin nor any digital asset system offers greater security outside of some frankly outlandish political scenario like cyprus which i want to give you a chance to answer to and which

is even a case where it's like just to turn it all back on you know like if you if bitcoin were actually really worth something the cyprus government will find a way to take that too because that's what nation states do they will just take your assets um if they need them to defend the nation state so i mean that's i that let me let me pause and let you answer the cyprus question this episode is brought to you by masari your days of spending hours scouring the internet for quality crypto insights are over masari is your one-stop shop for all your crypto data and research needs. With Masari Pro, you gain access to exclusive industry-leading long-form daily research reports, daily crypto news, advanced asset screeners, and curated sets of charts and

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lmax digital secure liquid and trusted go learn more at lmaxdigital.com slash pomp again that's lmaxdigital.com slash pomp so so um during the 2008-2009 global financial crisis did any banks go bankrupt yes right if your bank went bankrupt and you had more than 250 000 in an account there's no insurance and people lost money and so they put their money into an fdic insured bank account. And even though it was FDIC insured, they still, the bank failure ended up losing the money. So yes, on the... Wait, wait, I don't, I'm not, I'm not even sure I'm understanding. Like, if you had your money in an FDIC insured account during the 2008-2009 financial crisis, you did not lose your money. No, that's not true. If you have more than $250,000 in one account,

you lost, and the bank went bankrupt. They only, the FDIC insurance only applies to $250,000 in the account. So if you have 300,000, that $50,000 difference is not insured. You will lose that if your bank goes bankrupt. And how much was lost? Okay, well, I'm being educated then. So in 2008, 2009, how many consumers lost how much money from bank failures? That's a great question. I don't know what that answer is. But it'd be interesting to find out. And I think what we could probably find out is 2008, like a number of bank bankruptcies. We'll do a little Google sleuthing while we're going. So there was 25 bank failures in 2008, according to fdic.gov. And I'm sure each one of them, frankly, has a whole bunch of different details. But when you look at the

total assets of those banks in 2008. I'm looking at a bank failures in brief. There was $373 billion that were in those banks that failed during, of the bank failures in 2007, 2008. So again, that doesn't mean that everyone lost all the money. If all $373 billion was in FDIC he'd insured accounts with less than 250 grand, then it would have all been protected. So I don't know what the number or difference is. But the point is that in 2008, there was 25 bank failures.

In 2009, there was 140 bank failures. And in 2010, there was 157 bank failures in the United States. And so again- Yeah, but don't, yeah, go ahead. I was gonna say, I think that there's probably a power law, right? JP Morgan has way more assets in them

than obviously some small bank. And you can imagine credit unions and kind of all these smaller organizations. But I think it goes back to this Cyprus example, which is if you have more than $250,000 in an account and FDIC isn't covering the additional amount, to some degree, you made a mistake, right? It's your fault whether you think

you made the mistake or not. There's a personal responsibility. You took your money, you put it into a bank. You thought it was safe. The bank ended up not being safe. It's not your fault that the bank failed, but you made the decision to put the money in and you chose an organization that ended up ultimately failing. The government provides

that $250,000 FDIC insurance as kind of a safety net, and you'd put more money in there than kind of protected. And so again, personal responsibility, that's your fault. I think the example in Cyprus, which is you didn't choose an organization that failed. It's not the banks that failed, right? It was actually the government and they needed the revenue. And so they were confiscating it. Now to your point, I understand very much the pacifist view. I don't know if you know this, I was actually in the US Army, I deployed overseas, there's a whole bunch of stuff we could unpack in terms of people's perspective on war and all these things and many of the misconceptions and probably we've seen more eye to eye than you would think. But in the United

States, we have a voluntary military force. And I actually think that if there was some massive financial calamity, and we went out to the citizens, and we said, hey, there is a billion billion shortfall. Use a relatively small number for finance. And we need a billion dollars donated in order to keep the U.S. financial system up. I think a lot of people would say, hey, you know what, I'll throw in 20 bucks, right? I'll throw in $100. Like, I don't want bad things to happen. But when it becomes less about the individual's choice, just as it's a volunteer military force or voluntary kind of propping up of their own economy, and it becomes a, we are going to use a monopoly on violence and power in order to confiscate your wealth and in the united states

what would be a violation of the u.s constitution that's where i think people say hold on a second here why would we ever put ourselves in a position to allow people to do that and the one last thing i'll say on this and then i'd love for you to respond is i actually agree with you this is like a point zero zero zero zero one percent chance of happening in the united states like the united States, in my opinion, is the greatest country in the world. If you could pick anywhere in the world, you'd want to live in the United States. We have democratic political system. We've got a capitalistic society. We tend to have the most free society when it comes to a whole bunch of different things around speech and all this. So it's not me predicting it happening. I'm just

saying that Bitcoin affords certain things when it comes to security and the anti-confiscation or the anti-censorship that other currencies don't allow. There's no other currency in the world that would allow you to hold it. And if for whatever reason, someone wanted to confiscate it, allow you to not let them do that. Yeah. Well, so just to finish the Cyprus issue, I mean, so my point is much simpler, which is that if the United States or Cyprus were being invaded, it wouldn't be a voluntary military force to repel the invaders.

Similarly, when you're under a financial crisis, which is what they were under, or if we were, of course, the government would seize people's assets. Like that's what happens. And you can like kind of go, well, that's not fair or whatever. But like you live in a nation state. The government is not like another corporation. Like the government is responsible for like protecting us from external harm. That's Hobbes. And like, there's a sort of sense I get from when I hear people talk about this, that kind of goes, well, what right does the Cyprus government have to take my money in a financial crisis? It's like you are a citizen of the nation state of Cyprus. And when they're having a financial crisis, they're going to use the assets they have available to protect their nation state. They're not going to become a ward of whatever. They're not going to be invaded by another country and they're not going to let their

currency collapse. So, but Cyprus was hired. Cyprus was hired by the citizens, right? In the United States, I, as a citizen, I am paying for the government. I'm paying for the local government. I'm paying for the state government. I'm paying for the national government. Hiring is not the correct word.

Well, of course it is because I hired the state of North of New York. No, right. Because hiring is optional. Hiring is something that an employer of, I mean, hiring, like you're paying your taxes. Well, that's not the same thing as being as hiring somebody. But here's a good way. And I think maybe this is a difference of perspective. I hired the state of New York when I lived there and they provided me services.

And when I chose that, I didn't think I was getting my money's worth. I voluntarily hired a different state government and I moved to Florida. Right. You're just I mean, you're just using like inappropriate language from the private sector to describe your obligations to the nation state. But because they're not the same. But see, this is a difference. My obligations to the nation state is the government is here to represent the people. The people are not here to serve the government.

There are hundreds of thousands of people who fired California and New York in the last 24 months and they hired Texas and Florida. to the point where they literally lost political seats because people said, I am paying money and the services that I am getting do not fulfill what my needs or desires are. And so I think this is like one of the big things here is it's personal choice. Like you can vote with your dollars and you can vote with your feet. And what we saw over the last 24 months is usually just domestically. I don't think actually there was one talk track of people were going to like repeal their citizenship. They were going to move to some crazy country somewhere around the I actually don't buy that. I don't think people are going to do that. I think the U.S. passport

and U.S. citizenship is kind of the light on the shining hill. Everyone wants to become a U.S. citizen for the most part. Yes, there are some people who say no, but there's a lot of people who want to become U.S. citizens. But I 100% think that if a government is not fulfilling the needs and wants and desires of citizens, they will move, they will take their dollars elsewhere, and they will fire right again. And when we go to the ballot box, if you're an incumbent and you don't get reelected, you got fired by the people. Yeah, but you're misdescribed. You're using an appropriate language from the world of capitalism to describe the relationship between citizens and their government. But we have a capitalistic society. There's a reason why we don't mix those

two languages, because it's inaccurate and misleading. If you are a if you want to live somewhere um you're almost certainly going to pay taxes and it's not optional whereas it is optional about whether you hire somebody and you can just use you're just using confusing language when you describe the process of electing new governments throwing out old politicians but isn't that hiring and firing language for that aren't we hiring new politicians and firing old politicians like they have a job i mean i mean i think the fact that you want to kind of die on that hill of using inappropriate market language to describe politics and democracy and governance doesn't help your case because it actually suggests that there's a kind of hardcore

libertarianism there. Look, man, I mean, if we go to war with China, I don't care where the fuck you're going to move to in the world. Like the U.S. government is going to find some way to like if you have some ability to serve in that war, they're going to grab your ass and make you fight for america and similarly that's going to include grabbing all your bitcoin and being that's just what it would be to be at war and you know that as well as anybody because you served in the military but i think that like there's this idea that like oh god you know the cyprus government they took their people's money and what right do they have well the right they have is that they're the government it's the nation state and yes if they don't respond to what the people want then that

nation state that government will either be overthrown democratically or through violence or some other means. But that's politics. That's not consumerism. Bitcoin is trying to sort of, and this is metaphorical here, I mean, it's sort of introducing inappropriately a kind of political agenda and passing it off as a kind of digital revolution. It's not what it is. You know, there's a lot of beauty in the Bitcoin, in the initial Bitcoin paper. There's something really artistic and interesting about it. And then certainly blockchain technology is super interesting. And I don't know anybody that wants to get rid of it. But the claim that this is some alternative currency to like the dollar or the euro or the yen is just wrong. It's literally

false advertising. And even the word cryptocurrency is false advertising. And the reason for that is that you are a citizen of the United States. And if you want to go and renounce your citizenship and go and be an Israeli or a European or a Brazilian or whatever, yeah, you can do that, but then you're going to have obligations to that nation state. And there is no seasteading. And the reason is, is that that's just being a pirate. Yeah, I don't see it. I don't think that anyone in the well, maybe not anyone, but I don't think the majority of the Bitcoin community thinks that there's no obligations, right? In fact, what I think we're seeing is that politicians around the country, I've spent a bunch of time with many of them, both at the local, state and federal

level. They're competing to get Bitcoiners to move to their areas and to their kind of ecosystems because there's more tax revenue, right? This is one of the fastest growing sectors of the economy, both in terms of job creation, in terms of economics, and then obviously from taxation as well. And so that's why you see states like Texas, you see states like Kentucky, Florida, Ohio, et cetera, all competing to try to get these people to move there. But I think- Because they compete for Herbalife conferences too. Yeah, but of course, not on the same size nor scale as to what we're seeing from these politicians.

And real estate agents like to sell to drug dealers. I mean, so what? But if they want to sell to drug dealers, right? The U.S. banks wander more money than the Bitcoin ecosystem, right? So let's make it harder then, not easier. I mean, well, Bitcoin does make it harder. Ultimately, the whole Bitcoin thing is doomed because honestly, you're going to have guys like me who are going to fight on the right and the

left, especially as shit goes sideways in terms of the economy, that are going to fight to not allow Bitcoin to move from the black market economy into the mainstream economy. That's why I don't want to see it regulated. It's actually not a thing. All we should do is warn consumers to stay the hell away from it. It is part of a radical political agenda that the vast majority of people are not on board with because we actually prefer to have functioning nation states that have that's not true that protect us the white house disagrees that can defend it and so the white house disagrees though 14 of u.s citizens according to the white house own this asset yeah because they don't understand what it is because they've been scammed i mean

people buy herbal life and they buy but not 14 they bought bernie madoff and not 14 the f was the face of crypto. Not 14%. Not 14% of the U.S. population owns the asset. 150 plus million people around the world does more transaction volume than MasterCard in a given year. It's the biggest, it's a huge financial scam and it's crashing. But what's the scam? This actually, this would be interesting to talk about. There's no use value. But okay, so hold on. So if you were to criminal activity if you were to ask me what is the use cases for bitcoin right i would argue there's a store value just buy it and hold it for a long period of time the second and no different than gold a house uh i could literally say that do things with gold gold you can do things with gold

has a lot of purposes well no no but i'm just saying that there's store value i could it may be a bad store value but i could go outside and i could buy a bunch of rocks from somebody who's a rock dealer and just hold them in my house and say i think that in the future is gonna be worth more more money so store of value is valuable than your bitcoin for sure those rocks okay so hold on so store value the second thing is medium of exchange the nice thing is that uh rather than debate if it has no value then this exchange is pointless but i would argue that uh you think let's say for example why run away from the use question let's talk about that some more well because i'm walking through it if you can scan people into paying money for it but see here

That's the only way it's useful. Otherwise, it has no benefits in terms of digital transactions, zero benefits. So you're saying that 14% – So according to your kind of thought process here, 14% of the U.S. population has been scammed. These are consenting free individuals who come together. Family, my family. You're saying your wife was scammed. Yes, I am.

All right. So in all seriousness, you have store value, you have medium of exchange. The third thing, which we talked about earlier, is speculation. I actually think that is a use case, no different than a bunch of other assets. If there's no use to the, if it's completely just funny money, like Herbalife at the end of the day, or in Tupperware, my mom was Tupperware, you know, pyramid scheme. It was great. We ended up with Tupperware at the end of it.

Or you end up with a bunch of Herbalife. Yeah, it's more Herbalife than you need for yourself. But who cares? you have some herbal life. With Bitcoin, you have nothing. I mean, at worst, and even worse than that, though, you've basically legitimized and normalized money laundering so that it's easier if you were to make Bitcoin successful, it'd be easier to get drug money to be able to buy that big house in Miami. No, it's harder. It's harder. If you go talk to, and I've talked to FBI, DOJ, any of these folks, you go talk to them, they would prefer people use Bitcoin over any

other currency in the world because it is easier to track what criminal wants to conduct criminal transactions on a public ledger that is immutable it never can be changed and people can go back and look all the way from the beginning every single transaction that was done that's how all these guys are getting caught is because they're using i mean i mean there's just billions and billions i mean just just people can google crypto billions stolen crime and you just end up with too many news articles than you can read but hacks hold on hacks are different than money laundering the former cia director did a study and he estimated that point oh or i'm sorry point four less than half a percent of all transactions on the bitcoin blockchain have anything to do

with nefarious purposes so not just money laundering any nefarious purpose point four percent compared to they estimate two trillion dollars a year in fiat currencies and so when you go yeah because yeah but that's not relative i mean why is it not relative well you're because there's a lot more fiat currency okay but how how much more fiat currency 80 there's 80 trillion dollars anthony there's no there is no utility to this thing okay would you would you argue that there is utility if you buy your house and you live in it there's utility from living in it but also a use case of buying your house is the belief that it's going to go up in value so if i buy bitcoin and i just hold it you can't then go get rid of the house part of that story and then go

well because it's also a speculative asset of course i can't that are only speculative assets tulips had value herbalife has value tupperware has value pyramid schemes even made off i think that they ended up people ended up getting back like 80 of you know their money crypto ultimately should be zero like if people were rational it would have like zero value except for maybe some value as like an art project but it would really have zero value so you so so just so i'm clear you think that uh anti-censorship anti-caesarship private property rights and expression in the digital realm of free speech those have zero value well like i said i would give it a little bit of of value like as a burning man project all right so we're not at zero so we got some value

like one of those things like the burning man it's like a kind of like display of kind of digital interestingness and but it's also very wasteful in terms of i mean i'm not opposed to energy consumption um but i just don't think it just doesn't it's not it's just i look i just don't think i think in general you just don't there's no point to it so it's like it's like you can talk about all these other benefits like the speculative value or the exchange value but if you don't have if it's not a thing when you know if it's just a bunch of bullshit um and it's or it's an art project then it should be valued at an art project value not at anything beyond that well how do you respond to the fact that the that bitcoin has been the only disciplined

independent central bank over the last three years during all this chaos and uncertainty um it's it's not a central bank why not you might want it to be why is it not that's a fantasy but that's not what it is a central bank is the fed or the european central bank well those are human human-led central banks that have two activities right no it's just that's just that's just word salad that you're using in the same way that people say cryptocurrency when it's not a currency Well, currency is anything that people transact for goods or services, right? Nope. No? What is a currency?

I mean, it's not a national currency. Well, a national currency is different than a currency. Yeah, I mean, I think that the point is that it's meant to mislead. Like that language. Take the central bank example. Here's the things that are meant to mislead. The word currency, the word central bank in reference to digital assets, Cyprus, claims that there's more fiat currency crime than crypto digital asset crime. These are all things meant to distract people from the fact that there's no there there, that there's no product of value here.

It's just a kind of fantasy. It's a postmodernist, media-driven pyramid scheme on top of a criminal enterprise, on top of an art project slash nothing burger, you know, and I look, I mean, this is why it's good to talk. And unfortunately, I have to go back to working on this article I'm working on. But I mean, the great thing about free speech, and we agree on all these things, I can tell you that your product is worthless. i mean that's the best part of it yes and you can disagree but i also can in free speeches i can fight for your right to say that a hundred percent like we we are fully aligned and i'll fight for your right to sell you know nonsense no i i think that um i i don't think that we are going to come to uh uh eye to eye in terms of what bitcoin's value is the one thing that i would say is um Your view of the world in terms of many of the things that you've described today, I actually think align much more with the Bitcoiner view of the world than you may realize. No, I have many, like I said, family and friends. Yes.

Balaji is like probably one of the smartest people I've ever met. I agree with that. It's not a, you know, he's just trapped in a really bad idea. And, and ideas are really powerful. I mean, people get trapped in all sorts of bad ideas. I've been trapped in bad ideas. I've just been working my way out of them by writing two books about those bad ideas. But ideologies are powerful. But reality is more powerful. I think that's a great place to leave it, Michael. Thank you so much for taking the time to do this. Appreciate you, brother. I really enjoyed it. And hopefully we'll meet in person at some point. We'll be right back.