The Tim Ferriss Show - #606: Balaji S. Srinivasan — 5-10-Year Predictions, How to Start a New Country, Society-as-a-Service (SaaS), Bitcoin Maximalism, Memetic Warfare, How Prices Are Born, Moral Flippenings, The One Commandment, and The Power of Missionary over Mercenary

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Starting point is 00:05:25 You can find him on Twitter at Balaji S. Balaji is an angel investor and entrepreneur. He has the first and second place records for longest podcast episodes ever on this podcast. We will probably keep it to two and a half to three hours, I say with great confidence. Now, formerly the CTO of... But people listen to them. They do. They do. People listen to them. A lot of people. These are two, the last two appearances were two of the most popular episodes, certainly in the last year to 18 months. Formerly the CTO of Coinbase and general partner at Andreessen Horowitz. He was also the co-founder of Earn.com, acquired by Coinbase Council, acquired by Myriad,

Starting point is 00:06:04 Teleport, acquired by Topia, and Coin Center. He was named to the MIT Technology Review's Innovators Under 35, won a Wall Street Journal Innovation Award, and holds a BS, MS, PhD in electrical engineering and an MS in chemical engineering, all from Stanford University. Balaji also teaches the occasional class at Stanford in his spare time, including an online MOOC in 2013, which reached 250,000 plus students worldwide. His brand new book is The Network State, How to Start a New Country. And we will certainly wade into those waters and explore all of the related topics in depth. But let us begin, if we can, Balaji, with the current state of the crypto market. I know a lot of people would love to hear your thoughts on what you're observing. And just to date this, we are recording July 1, 2022, and then perhaps hearing your thoughts on the India sphere. But let's begin

Starting point is 00:06:56 with those two prompts. Sure. So I'm not a trader, much more of a long-term investor slash angel slash VC. There's actually a fun tweet today by a guy, Travis underscore Kling. I've been doing this for 46 straight months. I've never seen one like this before. And he's just got a list of all the carnage in the markets. And the thing is, that carnage is in the crypto markets, but it's also in the non-crypto markets. And it's a little more pronounced in crypto, but it is definitely like a systemic type of thing. And the way I type, kind of think about it is I was, there's very few spaces that I get into where I don't have an all-weather thesis that works independent of the price. And so I was in genomics way before people were talking

Starting point is 00:07:46 about genomics. I was doing machine learning way before people were talking about machine learning. It's kind of weird to see people talking about stuff that you're doing like 10 or 15 or whatever years ago, not to say in a thumb chest way, but just that you want to try to identify these things that have value independent of that. And the fundamental value of cryptocurrency is, can you have a system where the root permissions are independent of the U.S. and Chinese establishments? That is the fundamental question, is one of digital freedom. And I can kind of tease that out, but it's fundamentally, do you actually have property rights on the internet, digital property rights? Or can somebody with a police badge from the US or Chinese establishment, depending on what side of the world you're on, get into all of your stuff, surveil all your stuff, take all of your stuff, freeze and seize all of your stuff,

Starting point is 00:08:37 and so on and so forth. So that fundamental question of whether digital property rights should exist and whether they will be valuable in the medium to long term is what gives me confidence in the space, not the specific price. I can talk more, but that's prices down, prices up. I would only invest in those kinds of things that I believe further that aspect of freedom and control. Question for you. In our first episode, I think at some point you mentioned for someone who is not going to make a full-time study of things, splitting their allocation to crypto. And this is not investment advice. This is two people talking for informational purposes only, but splitting 50-50 Bitcoin ETH. Does that still hold or would you, based on what you've seen since and what you're seeing now,

Starting point is 00:09:27 maybe any developing theses change that? No, I'd say stick with that. I mean, again, not investment advice and so on, but basically those ecosystems are just still absolutely massive. If you look at, as I said, I think I said something like, buy it and then hold it for 10 years. And let's see where we are in 10 years. The fundamentals in terms of not just number of users, but conversation. If Twitter was open source, or rather more specifically, if it was open state, that is to say not just the source code was available, but the backend was available, the database

Starting point is 00:10:00 was available. Okay, not just through an API, but that you could just hit a key and see every tweet if you wanted to, every public tweet at least. If it was open state and you could plot the number and the depth of interactions on Bitcoin and Ethereum and all of their offshoots, not just those keywords, but the thousands of keywords and memes and communities and so on that would be built on these, these are like countries that have built out. And those are things that just have mass to them. And you can mark them to market. They've got downs and they've got ups, but they are absolutely massive things with tens of millions of dedicated people around the world. And they've come out of nowhere. So yeah, I don't believe that they're

Starting point is 00:10:38 going to go away. But again, not financial advice. It's just my personal belief. You can get much more sophisticated than that. But the absolute worst thing to do, by the way, and this is maybe obvious, but I'll just say this, is the worst thing to do is buy an asset when it's in the news and sell it when it's in the news. And what you instead want to kind of do is it's inevitable that something will pique your attention. And then what you do is you set a calendar reminder, let's say 30 days, 60 days, 90 days, so that you are almost like retargeting yourself. And then you go and you actually do

Starting point is 00:11:12 research on it outside of the scrum, outside of people yelling about it. You intentionally do it async to the market sentiment. There's a famous cartoon. It's a guy, he's like, this looks like it's a good buy. And someone over here is there like, buy, buy, buy, buy, buy. And then the guy's like, this stock could really excel. And then someone over here sell, sell, sell, sell, you know, like this, right? And it's this hilarious sort of loop, which you don't want to be the current thing. You don't want to be the person who is buying high, selling low. And I think the only way to not do that is set calendar reminders, assess your portfolio, like whether it's a quarterly basis or something like that, and try to make async decisions. You almost never want to sell on bad news, buy on good news. That's my macro outside of any given specific thing. Yeah. Let me add one thing to that, which is humans in general, and I succumb to this sometimes too, overestimate their predictive abilities.

Starting point is 00:12:11 So what is very helpful is set a time, it could be once a year, Jan 1, Jan 5, doesn't really matter, where you sit down and you identify, say, I'm just picking a time frame, six months from now, and you grab a bunch of potential asset classes or stocks or indices. So maybe it's Bitcoin, barrel of oil, S&P 500, and make your predictions. And then set a reminder to look at them three months or six months later when you may, as you are influenced subconsciously by chatter on Twitter, trends in the news, and so on, to think that you know where things are going. Let's see how successful you were over the preceding six months. So that's also a good way to check your cognitive biases. Let me talk about, can I talk about that for a second? The predictability.

Starting point is 00:13:08 Okay. So this is something I actually write about in the book, which is we're sort of reentering high volatility times. And the thing about this is most people don't think about it this way, but companies and governments shield people from volatility to an extent that we don't really think about that much. And now that shielding is going away, for example, when you go and buy like a laptop from Apple and they quote you some price, let's say, I don't know what it is, $14.99 or $19.99. I don't know what the number is. Okay. I'm just making that up. When they quote you that price, that's a price that they are, they're, you know, selling it for, but the price of aluminum is bouncing around the price of their rare earth elements on the back end. That's bouncing around their cost of goods is if they were just buying at spot prices bouncing around every day.

Starting point is 00:13:59 And so in theory, their margin could shrink or grow or whatever on a given day. Now, what do they do to deal with this? They buy in bulk. They have various futures contracts and so on. They buy and sell collars. So they give up some of the upside on that margin to bound their downside. They're getting aluminum for X dollars per kilogram as opposed to greater than X or lower than X. So those companies actually buffer all kinds of crazy

Starting point is 00:14:25 variations to give you that clean, dependable 99 or 29 or 1499, whatever price. And governments do this as well in lots of other ways. That's why you don't have people walking down the streets of the AKs. That's why you don't have mobs pillaging and so on and so forth. Wait, wait, wait, hold on. Can you tie those two things together? So I followed you on the futures contracts and maybe if they're dealing with currency, certainly they would have other protections in place. But how do we go from that to preventing people from walking around with AKs? Sure, sure. I believe there's a connection.

Starting point is 00:14:57 I just would love for you to elaborate. Absolutely. So it's social and financial volatility. And the way I think about it, so let's start with financial because it's a little more quantitative and people know better. There's this concept called market depth. And if you've ever looked at Coinbase Pro or any crypto exchange, you see this V-like thing with the buy orders on one side and the sell orders on this side. And this is like how a price is born. Normally, most people in normal life are price takers. You go to the store and you buy orange juice for whatever the price is now, 50 bucks or something. I don't know what it is today, but you know what I'm saying, right?

Starting point is 00:15:36 Okay, a gallon of orange juice is, I don't know, some price, okay? And you're a price taker. It's set price, 4.99 or something like that. The thing is, if you start emptying out the shelves, if you buy 100 units of orange juice, and then you go to the next store, it might be $5.50. And then the third store hears you're coming, and they set it to $7, and so on and so forth, right?

Starting point is 00:15:56 You start moving the market price. You are now a price setter, in a sense, when you start clearing out units. So you've got 100 units at $499 and then 200 units at $550. And now you can get 300 units at $7. And your supply increases as the price increases. And then conversely on the other side. And so that is actually how a price is born. Most people don't usually think about this because you're buying single individual consumer units. You're not like a bulk purchaser. But when you're purchasing in bulk, suddenly people are negotiable. They can make more money on it. They're okay with negotiating. Okay, what's my point? This idea of market depth, just like we see a price shift back and forth

Starting point is 00:16:35 with sentiment, that's the same concept in financial terms as the Overton window. The Overton window is the set of what things are politically acceptable. And sentiment shifts back and forth. There's a thing, here's the current center. And as radicals push, that thing that was totally unthinkable moves to the center. Or conversely, conservatives push, and suddenly it gets pushed back. That's kind of like buy and sell pressure. In fact, you can think of it a lot like that on any given issue. And you have essentially almost like votes. You have a thousand votes for this level of the policy and 5,000 votes for this level of policy and 10,000 votes for this level of policy. And then you have some on the other side. And when you can shift over those vote banks, you shift that midpoint, which is a policy,

Starting point is 00:17:22 just like if you can shift over the order book, you shift over the price. Yeah, that's clever. I like that. Once you see that as the macro of how I think about prices and policies, when people say, oh, it's getting political, what they're really talking about is, just like with the price example, most people are price takers. As I said, you go and buy the orange juice. Just like most people are law takers, the policy is as I said, you go and buy the orange juice. Just like most people are law takers. The policy is just applied to you. But if somebody is like powerful enough or it's like a weird enough situation, that law flexes.

Starting point is 00:17:54 Concrete example, Singapore, you know, a couple of taking example that's like out of our time and place, you know, and so on. So people don't get mad. Singapore, like two and a half decades ago, I think in 1987, there was an American citizen, Michael Fay, who was vandalizing things in Singapore. I remember this. You remember this, right? And Singapore was going to cane him

Starting point is 00:18:13 as per Singapore law. And frankly, had he been a Singaporean or he'd have been anybody other than an American, he would have been a law taker. Okay, the law would have just been applied. But all kinds of pressure got applied on this side of the policy market. And Lee Kuan Yew was like, OK, we're going to like reduce the number of strokes of the cane. He didn't set it to zero because that would have been too much of a give.

Starting point is 00:18:40 But as a consideration for that, like the U.S. government made it like a diplomatic situation and like the president got involved and all this stuff for tiny Singapore. So the pressure for Singapore was significant on the policy side. And so now the law was negotiable. That's what it means for something to quote, get political, is that you have huge masses of people that assemble and they shift the midpoint of the Overton window, just like huge masses of people that assemble and they shift the midpoint of the Overton window, just like huge masses of people shift the midpoint of a price. The thing is, as I mentioned earlier with Twitter, that backend is not open state. So because it's not open state, we cannot see sentiment moving as we can with price, not as easily.

Starting point is 00:19:23 Not as easily. There are other tools that I also, you probably don't know this, but I pay a good amount of attention to this type of thing on a number of fronts. So Google Trends, I mean, they're not open state exactly, but you can track certain types of sentiment or interest or fear longitudinally. But continue, I didn't mean to interrupt. No, no, no, you're right. In one sense, we've got far more information than we ever had. In another sense, I know we have 100 or 1,000 X left to go.

Starting point is 00:19:55 And the reason is that, think about the difference between, and this is a tech analogy, so you might be like, well, think about it, huh? Think about the difference between AT&T, Unix, and Linux, okay? Now, most people, all right, so if you're an engineer, you're like, yeah, dude, AT&T, Unix was good, but it wasn't hackable. I couldn't customize it. I couldn't take it apart, look at the engine block.

Starting point is 00:20:20 I couldn't make it work on tiny devices and giant servers. I couldn't make it work on tiny devices and giant servers. I couldn't make it mine. And so currently it's good, yes, that we have Google Trends and that we have, like you can kind of get some sense from the Twitter API and so on, but they're very locked down in a certain way where there's queries you can't easily run. You might have to pay a lot for the API. And so it's over versus if that data set was open, we'd have a completely different understanding of society and history and politics. It would be at the same level as the unlock going from AT&T Unix to Linux or the unlock of going from PayPal to Bitcoin. what some of the, to you, most foreseeable technological developments are that you,

Starting point is 00:21:06 say, almost treat as assumptions in building out your vision for the future over the next X years. And you can choose X. And this might be a place also where we can sneak in, and I'll let you do it, one very primitive way. Maybe it's primitive, you tell me, but it's a lo-fi way of identifying possible trends through, you pointed out, a stealth topic that showed up in my most popular episodes in the last 12 months. I'll let you take that wherever you like. What's the stealth topic? So I saw the list of the top 10 Tim Ferriss podcasts last year, where I was number one and number two, despite how long they were. So hopefully the listeners got something out of it. It was an honor just to be nominated. I'd like to thank the Academy. Very importantly, by the way, to my knowledge, the Tim Ferris rankings are not juiced or editorialized and so on. Did you know that you're probably aware of this? Maybe your

Starting point is 00:22:02 listeners aren't. The New York Times bestseller rankings are an editorial product? Oh, absolutely. I'm 100% aware of that because I had, just to give an example, one launch week with one of my books, which came out through Amazon Publishing, which put me squarely in the crosshairs of almost everyone in the traditional book slash publishing world sold, I want to say 120,000 copies through Nielsen Book Scan for that one week. And it was number four on the New York Times bestseller list in my category. And the book that hit number two sold somewhere between 10 and 12,000 copies verified through Nielsen Book Scan. So do you know about the Exorcist lawsuit? I don't. I do not.

Starting point is 00:22:50 So basically, back in the 80s, the guy who wrote the book The Exorcist, which actually got turned into a movie, sued the New York Times because his book hadn't been, a different book, Legion, hadn't been included in the bestseller list. And in their explicit written defense in the courtroom, NYT said the bestseller list was actually neither mathematically calculated nor was it an objective measure of sales. Rather, it was editorial content, and as such was protected as free speech under the U.S. Constitution. So it's actually the most charitable interpretation is like Google's rankings. Google's rankings, you know, what is the number one hit for Sinatra? Now, what's funny is you'll get a different, you know, if you Google it, you'll probably actually be surprised.

Starting point is 00:23:33 For a long time, it was the Sinatra web framework, and now it's Frank Sinatra, you know, the Wikipedia article. And the thing is, that's a great example of what should it be. Most people who are looking for Sinatra are probably looking for the web framework, but most people on the planet... That is the most apology statement ever. But continue. Do you think that's true?

Starting point is 00:23:54 Right. Most people who are querying Sinatra, as opposed to Frank Sinatra... I see. I see what you're saying. Okay. All right. Fair enough. Because it's like a very proper noun to query, right?

Starting point is 00:24:04 So if you could measure it, and Google is the kind of company that when it was good, it was measuring this kind of stuff, their intent, basically you could argue as to what was number one. Is it the thing that people want to get? It's like searching for Apple. Should it be the fruit there or should it be, well, actually, if they look for apples, they want the fruit. If they want Apple, then they want the company, that kind of thing. Anyway, but Sinatra is a good example. Point being that that's something at least Google people kind of know that the ranking is not objective.

Starting point is 00:24:32 When you call it a bestseller list, the impression is that it's a numerically ranked thing and it's not editorialized, but it is. Anyway, point being, coming all the way back up, Tim Ferriss's unjuiced, unedited list was interesting because I looked at that. That's actually kind of some open source analytics itself. And when I looked at that, I was like, you know, this is interesting. There is a stealth topic here, which I'm also really interested in, that Tim's listeners are interested in, and I'm not sure it's being named as such, and that is transhumanism. And that's Huberman Lab, that's Life Extension, that is Brain Machine Interface, and it's Limer Generation. It's all your fitness stuff.

Starting point is 00:25:10 It is all the recovery stuff and so on. All of that is sort of a whole growing, in my view, positive trend. The problem is people have pathologized it. They think transhumanism is like the, I don't know, the Klaus Schwab version from the World Economic Forum where you all become mishappened monsters and you're edited and, you know, you're... Harvesting adrenochrome from orphaned children in Romania. That's right. So we need probably a different term for it. And I've got some terms that I've been thinking about. Often you have the positive and the negative version of any term. Like you can, you know, Russell conjugate it positively and negatively. Like, you know, he was righteously angry or he was incandescently mad or whatever.

Starting point is 00:25:56 You know, you can like, you can change the tone of how you- Yeah, the sweat, transpire, glisten, depending on who you are. Exactly. You know, I sweat, he perspires, she glows, right? What was I saying? Transhumanism and alternate terms. That's right. So whatever else you might call it, you could call it, I like to use the term optimalism as opposed to optimism. You are optimizing yourself. You are being positive. There's an objective function. Transhumanism, you might say it's just a change

Starting point is 00:26:25 or that change is positive or negative is unstated. But optimalism is in a sense, you're improving, you're getting better. It is like optimal physical fitness. It is optimal health. It is taking care of oneself. It is optimizing finances. It is optimizing everything very in tune with, I think, what a lot of your listeners are for, right? So that, to me, if you ask about foreseeable futures, transhumanism is an all-weather thing, or let's call it optimalism. People will want to get better. And I think science is now really starting to catch up there. And this is actually one of the good things about the state sort of receding and coming

Starting point is 00:27:02 back and not being able to—like, the over to window on this is absolutely moving. People are much more skeptical of the FDA and that actually has good aspects because it means that more treatments and so on can get through. All right. So you asked about foreseeable future. So one of them is optimalism slash transhumanism. A second one, which I think is, this is, this will be completely obvious to pretty much everybody who's in, let's say big tech,

Starting point is 00:27:23 but maybe not as obvious to people outside, is augmented reality glasses. Should I talk about this? Yeah, absolutely. So in the late 90s and probably the early 2000s, people talked about the so-called convergence device. And you can go and look at the LexisNexis archives and so on. Bill Gates would talk about the convergence device. And what did he mean by that? He thought it was going to be like a television, which would combine a computer and a phone and all of these other things. Why? It's because in the 80s and 90s, everybody had a TV and everybody talked about the TV. And the household gathered around it and they interacted with the remote. So it seemed like a reasonable thing

Starting point is 00:28:04 that people who'd been habituated to using a TV could do something else, right? And it turned out to actually the convergence device was not the television. It was the phone that acquired all of those characteristics, but they were correct that there was going to be a convergence device. And there were also people who were interested in quote mobile prior to the iPhone. Jack Dorsey, actually, the reason Twitter, I believe has 140 characters is it was some like SMS payload constraint that, you know, he understood how important mobile was going to be years before the iPhone even came out, right? Most people were not seeing that most people, even after the iPhone came out, there's this

Starting point is 00:28:40 great core thread. That's a time capsule. That's something like, what's the point of mobile apps? It was like in 2010, actually. And they're like, what's the point of mobile apps? It was like in 2010, actually. And they're like, what's the point of mobile apps? Is it just going to show me coupons as I walk by a store? Do you know this thread? Have I talked to you about this? No. So my friend, Yashan Wong, he actually, I think he replied to this.

Starting point is 00:28:58 Let me see if I can find this. Without mentioning coupons, why and how is mobile the future? Or will the next revolution really be based around deals and incentives? I think it was from 2010 or something like that, right? And the thing is, that post is a great time capsule because from today's standpoint, we're like, what are mobile apps good for? Everything. Everything is good mobile, right?

Starting point is 00:29:22 There's Uber and there's Airbnb and there's Google Maps and on and on and on. And then when you actually go and think about it, the issue is that a lot of the, because people have been so used to operating computer in sessile fashion, meaning immobile, their imagination wasn't enough. They're like, why would I just want to do that on the go? I don't have a full mouse. I don't have a keyboard. I have to tap on a screen and so on and so forth. And Yashan's point was humans are mobile. And so therefore, even if the interface is smaller, even if your UX is worse, even if it's more constrained and it can't do everything, it has that thousand X value proposition that it's always available to

Starting point is 00:30:02 you at all times. And that alone means that every app will become a mobile app. This is totally obvious today. It's probably pretty obvious by 2015. It was absolutely non-consensus by 2009, 2010 when that thread came out, except for within the tech people who are investing in mobile. What is kind of similar to that? And of course, not every future comes to bear and so on and so forth. But what would I consider something which in like five years or 10 years are going to be like, duh, super obvious, of course, huh? And now today,

Starting point is 00:30:33 they think you're a weirdo and that's never going to happen. Okay. When it goes from you're stupid and insane and that'll never happen to obviously that would always be the way it was. I love that because there's a very short gap in the middle of that exponential. You know, other things that were like that were like masks during COVID or pseudonymity, actually, in the crypto community. You know, what is it? What is PIVACON? So AR glasses.

Starting point is 00:30:55 So AR glasses, if you combine a few things, so Snapchat spectacles, which to Spiegel's immense credit, he has persisted with after tons of criticism and hardware is really hard to iterate on. Right. So, you know, he's persisted with that. He's made that a big thing. And I give him a lot of credit for that because it's very difficult to do that over multiple generations. It's the kind of thing that your CFO wants to cut. It's the kind of thing that the street doesn't like. It can be low margin, blah, blah, blah. Anyway, spectacles are out there. I'm not sure how well they're doing, but they've definitely improved a lot. I like them. I have no Snapchat stock, by the way. I'm just saying, whatever

Starting point is 00:31:32 thing, it's a good product. Spectacles, Facebook's Oculus Quest, again, something which Zuck deserves, I think, a huge amount of credit for putting $2 billion into that 10 years ago. They're only now really starting to recoup it because there were several iterations. And there was a lot of technology that needed to go into Oculus Quest to get it to where it is now. Oculus Quest, Spectacles, Oculus Quest, Google Glass Enterprise,

Starting point is 00:31:54 which I think is doing reasonably well. Google Glass Enterprise, basically, they're using it for industrial applications, not walking down the street yet, but for industrial applications like a surgeon or a mechanic or something like that. Less likely to get punched in the face when you're using it that way. Yeah. Right. Well, so come to that point, Apple's AR kit, AR kit is like, you can hold your phone up and you can see like a glowing orb or something like that. And the

Starting point is 00:32:19 other side, or, you know, for example, you've got a ruler app in the phone and you can hold it up and it'll just, boom, it'll show you blueprint style what the measurements are of your walls. And then apps like Pokemon Go, which are augmented reality apps. And you put all of that together, and what do you get? You get something which looks and feels just like a normal pair of glasses that you'd get from from lens crafter or something like that but you tap it and you get terminator vision over the world and maybe you tap it again and it darkens and you're in vr and it's as lightweight as normal glasses which we know are a form factor that people do use millions of people use them every day they look like normal glasses so they don't

Starting point is 00:33:03 like stick out to the world at large. But what they do is they now make you hands-free. So remember the thing we were saying, humans are always mobile. Well, why would people want AR glasses? They want the use of their hands. They want the use of their hands, and they want to be outside, and they don't want to be stuck inside all the time. And so this will make us truly mobile again,

Starting point is 00:33:25 because you won't be, you know, mobile phones will be seen as this intermediate stage where you go and walk around and you're like, you know, like this all the time. Right. And I'm not sure if it's Huberman who said this on your podcast or something, but he was like, you know, the way to wake up to be alert is to like, look up. Do you know that trick? Yeah. I think he did share that on his and my first conversation on the podcast. I believe that was in that episode. It's almost like, you know, you got like this primitive caveman and he's coming out of the cave and he's like, who will all smash today? You know, and looking, looking up like this, you know, and he's like kind of surveying and he's alert or whatever, right? That maybe that's the adaptation. But the opposite of that is staring down at your phone. And actually,

Starting point is 00:34:08 Sergey Brin many years ago remarked that it was emasculating to do that. And who knows what the biomechanical feedback loop that's going on is, but heads up is heads up. Just a quick thanks to one of our sponsors and we'll be right back to the show. This episode is brought to you by Athletic Greens. I get asked all the time what I would take if I could only take one supplement. The answer is invariably AG1 by Athletic Greens. If you're traveling, if you're just busy, if you're not sure if your meals are where they should be, it covers your bases. With approximately 75 vitamins, minerals, and whole food source ingredients, you'll be hard pressed to find a more nutrient dense formula on the market. It has a multivitamin, multimineral greens complex, probiotics and prebiotics for gut

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Starting point is 00:35:47 training data and better tech so that it can be ported over to mobile use in some type of application with AR-enabled glasses? I mean, it's a really good business in its own right. I mean, they've sold tens, if not hundreds of millions of those devices. So, but yeah, the training data helps, helps a lot. And all three companies, you know, Apple, Google, and Amazon have, you know, these smart speaker things, which are, they're kind of interesting, right? You know, like some, if you Snapchat today, and then you think back 30 years, the kinds of things that have converged, the clock radio has become this. That's like the closest analog to that in the 1980s household for an Amazon Alexa thing is that. And the phone obviously has combined lots and lots of different gadgets. And then we're going to now see, if you look at like the Solana crypto phone, when you walked out of your house in the 80s or 90s, you'd have your wallet and your keys, and then maybe your credit card. And then later you have your phone and it literally a physical wallet and a physical key and a credit card and so on.

Starting point is 00:36:53 And eventually that's all going to converge into a different kind of thing because it's amazing that your cash and your wallet and your keys to your car and your credit card can all be thought of as a private key on your phone. Yeah, I suspect we're very close to that, right? I mean, you have Tesla, which is phone tethered, and then you have, say, Apple Wallet, and then you have fill in the blank. We're very close to that, I would imagine. We're close, but it's one of those things, it's sort of like gathering threads. So you have to gather all of the skeins together so that now a Tesla car can be basically opened

Starting point is 00:37:31 by your phone. And then you have to sell so many Tesla cars that that's like 10% of the market, you've educated the market. And then you do it for your wallets or your private keys, and then you do it for your passwords and so on. You're gathering all of these different skeins, and then you know make that tapestry or that coil what is that word that you're using so skein s-k-e-i-n e-i-n all right new word it's like a length of i think the official length a length of thread or a yarn loosely coiled and knotted got it maybe i'm maybe

Starting point is 00:38:02 i'm mispronouncing it but i think it's's skein. No, you got it. Skein. All right. Yes, you gathered the skeins. Sorry to interject. So you asked for a foreseeable future. So first is transhumanism slash optimalism. I have this tweet, which is super soldier serum is real. Have you seen this one? I have not. Okay. So you'll like this one. I may have mentioned this before, but if not, Super Chills of Shoddard Israel. Okay, this article is from PLOS. It's like 15 years old or whatever. Oh, this is like myostatin inhibitors or something, possibly.

Starting point is 00:38:33 Yeah, exactly. And so on the left-hand side, wild-type mouse. On the right-hand side, myostatin null. And look at the chest on that guy. Like, holy moly. So that's why I put like the Captain America before and after. If you are able to work with knockout genes and so on, you end up with animals like bully whippets. So people who have seen a whippet will envision this very, very, very thin

Starting point is 00:38:57 dog that looks something like a greyhound. But if you look up a bully whippet, you'll see something very, very different indeed. And there are also cattle breeds that have been bred selectively, which is the slow way to do it, for this type of myostatin inhibition. So they end up looking like Arnold Schwarzenegger times 10, basically. Exactly. That's right. And the thing is that there's this movie Limitless that I really like. And the reason I like it is it changes the normal Hollywood formula at the end. See, normally many Hollywood movies about science fiction stuff nowadays have a sort of Icarus thing to them. bold and he flew too close to the sun and his wings melted and he came back to the earth and and you know so he should not have ever flown in the first place and it's basically like you arrogant technologist you added there's always some constraint and it will be subtracted from you you'll never learn right this kind of intrinsic conservatism and uh what's awesome about it's a 10 year old movie so i'm spoiling it for people but what's awesome about it's a 10-year-old movie, so I'm spoiling it for people. But what's awesome about the end of Limitless is that he engineers away that constraint. And because in real life, guess what?

Starting point is 00:40:10 All of our planes don't crash either. We managed to outdo Icarus. It wasn't like some arrogance of thinking we could fly. We could fly, right? We could figure it out. Yes, there were some crashes. We figured it out. We got it down to, you know, not just the science, but to an engineering.

Starting point is 00:40:24 And so similarly, a lot of people, when you show stuff like this myostatin thing or whatever, they'll be like, oh, but it'll give you cancer or, you know, steroids will screw you up, man, or whatever. I'm like, that may be the case if you are not throwing all the science and engineering in the world at it. Okay. So here's a kind of controversial statement. You know, Lance Armstrong, the Tour de France winner who cheated and right. I may be getting some of the facts wrong on this, but my understanding is he had serious testicular cancer. His doctors gave him some kind of treatment and then he did, you know, he came back to win multiple Tour de France's like he was out racing other guys, many of whom were also juiced. Okay. But the point is yes,

Starting point is 00:41:06 within the game, sure. He broke the rules should be punished. I don't dispute any of that from an abstract perspective. I want to know what his chemists were doing because that is some like Nobel prize worthy stuff to bring back somebody from testicular cancer to that level of physical fitness is insane. whatever it was that they were doing. Now, is it possible? People, again, they'll come up with the Icarus line. What are you talking about? He probably dropped five years off his life. Okay. Maybe he did. I actually don't know. But if he did, I think a lot of people might still take that trade-off in the trade-off space to come from testicular cancer to like ridiculously ultra fit and so on, but five years less of life.

Starting point is 00:41:46 Let me hop in here because this is one domain where I have some familiarity. So for people who want to get an idea of how doping functions at the highest levels or the higher levels, at the highest levels, you'd need to get the, actually there's a film called Icarus, of all things. Oh, really? A documentary which goes into the Soviet state's use of doping. And from a biochemical and also even just mechanical logistics perspective, it's just staggeringly complex and fascinating, I think. There's a book also, it's quite old, but called Game of Shadows, Barry Bonds, Balco and the Steroid Scandal of the Professional Sports, which is also a, a,

Starting point is 00:42:30 quite a good read when it comes to assuming you don't want to get into too much of the biochemistry, but let me say just two things. So one is related to Lance. Their arguments have been made that until he lost muscle mass through cancer treatment, primarily in his upper body, that he was an excellent cyclist, but not of the caliber that we saw afterwards. And that part of the success, not all of it, but a component to the increased level of success was- Again, it's a new version of bulk and cut. It was the recomposition of his body and distribution of muscle mass. I do think the Lance example is super interesting. And I would just also pick up on one lost skein.

Starting point is 00:43:15 I'll use skein from earlier. If people want to see examples of... Literally, they're referred to as double-muscled cattle. So these are mutations due to mutations in the coding sequence of bovine myostatin belgian blue is the one that you can most easily find and this the photographs of this are quite mind-boggling oh yeah belgian blue is great yep yeah so people can that the the traps on that thing are just crazy that the everything it doesn't look like uh it doesn't doesn't even look like they should be able to Yeah, so people can check that. The traps on that thing are just crazy. The everything. It doesn't look like,

Starting point is 00:43:47 it doesn't even look like they should be able to walk. And in some cases, due to selective breeding and other types of interventions, that is the case with chickens now who are bred for consumption. They can't support their own weight on their legs past whatever it is, making it up, something like week six.

Starting point is 00:44:04 But I don't want to take us too far afield we're going to come back to the network state but wait i i actually i want to talk about this thing you just said let's come to the network state okay so so one thing that's kind of important about this is and this relates to the network state thing you know the title that book game of shadows and some of the words cheat and you know fraud and you know so and so forth the fundamental issue and of the words cheat and fraud and so on and so forth. The fundamental issue, and even with the Soviets and so on, all of this stuff is being done in the shadows. It's on the border of the system. It's by the bad guys. What it reminds me of is actually in the Soviet Union itself, there were two kinds of groups that talked about capitalism. The first were the dissidents, you know, the guys

Starting point is 00:44:48 who eventually, you know, became reformers and so on and so forth. That was a tiny, tiny, tiny minority of people. They're the people who could get outside of their childhood and all the propaganda on how evil those capitalists were. Weren't they imperialists? Weren't they pointing guns at us? Hadn't they killed our brave Soviet soldiers? Hadn't Lenin's revolution, hadn't everybody sacrificed so that you, the worker, could have this bountiful life and you're so ungrateful and evil? So there's that small group of academic types who could get outside their head. But there's a much larger second group of capitalists.

Starting point is 00:45:20 You know what those guys were? Tell me. The black marketeers. And they lived down to every stereotype of capitalists. You know what those guys were? Tell me. The black marketeers. And they lived down to every stereotype of the regime. They would cut you for some vodka. They were totally unregulated shadow capitalists. So are those guys team Bology? I'm just trying to tie this together. No, no, no, no, no, no. Tying this together. My point is that when our moral premise, in the Soviet Union, the moral premise was capitalism is bad and if capitalism is a crime only criminals will be capitalist and it took enormous amount of effort

Starting point is 00:45:52 over 70 years to flip that moral premise and be like look capitalism is at least acceptable if not good and then what happens is all of this stuff, you unlock the basic dispassionate gears of civil society. You have accounting and you have supply chains and you have financing. You have all this stuff that we think of as like boring corporate stuff, where it comes out of the shadows into, you have courts that deal with edge cases because in the abstract, basically, once you've denounced capitalism and pushed it into a corner, the Soviets could say, and what happens if someone cheats you, huh? Well, that's what happens under capitalism. And the answer is, yes, it does. True, that scams or whatever do happen.

Starting point is 00:46:36 But we have courts and we have mechanisms. And, you know, in the abstract, the whole thing can be denounced as obviously unworkable and so complicated. You have all these edge cases. You have the chancery court, which determines in the liquidation who gets what kind of outcome. You have senior debt. You have all this type of stuff, right? Sorry, I know I'm mixing a few things. Point is, you have like Delaware law and corporate law. You have liquidation preferences. You have- Went from Belgian blue to Delaware corporate law in 27 seconds. I like it the range point is basically that there are a lot of details when you actually come and implement capitalism

Starting point is 00:47:11 and from the outside if you haven't done that it makes it sound like too complicated a rube goldberg machine that'll never work why don't we just you know seize everything comrade and redistribute it from the state and the thing that's already there is the thing that functioning. And the thing that isn't there is the thing that seems can be attacked in a thousand ways is the system that doesn't exist. Point is, once that moral premise got flipped, once it was allowed for the bulk of 99% of people to engage in this, yeah, there's a whole machinery that comes in. And so once we can flip that moral premise and we can say, look, life extension is good and more muscle is good and the whole Icarus narrative is wrong. The Wright brothers are right.

Starting point is 00:47:52 Icarus is a myth, right? Wright brothers, that's a reality. We actually were able to fly. Icarus is just a mythical thing. The reality is a Boeing 747, right? Or whatever, Airbus, you know, name some recent aviation company that hasn't had some issues, but whatever, right? Overall, you know, planes work. So in the same way, once we flip that moral premise and say, optimalism, good, you know, enhancement, good, then we start shifting it out

Starting point is 00:48:16 of Game of Shadows and Soviets and, you know, the doping scandals and cheat, all those negative adjectives. And we start going to the positive stuff of, you know, what Huberman is doing and what David Sinclair is doing and so on and so forth. The reason I just want to identify this, I actually think that moral language, that moral premise is everything. And it's often not articulated. No, I agree with you. And just like making the market, setting the price depth charts, we talked a bit about the Overton window and sort of shifting that depth chart as a way of becoming political if you're an active player, so to speak.

Starting point is 00:48:53 And I think that also applies here. I just want to say a couple of things about the doping and performance enhancement just for people who may be interested in going a little bit deeper. Another documentary, and you could learn a lot just by watching. First, I would suggest Bigger, Faster, Stronger.

Starting point is 00:49:10 Well, it's Bigger, Faster, Stronger, but I think for trademark purposes, they probably flipped it. Bigger, Stronger, Faster is a documentary that was made in 2008. And it is a fascinating exploration of performance enhancement. And it also shows the advantages that richer countries have in performance. And in a sense, doping and competition at the highest levels is very similar to, let's call it tax optimization on the positive side, tax evasion, if you want to look at it through that lens or with that legal painting, is they will look at something like, in this documentary, use of erythropoietin, so EPO,

Starting point is 00:49:53 used to increase the oxygen-carrying capacity of your blood, which is why athletes also will use blood doping. So they might have use of EPO banned by WADA, right? So you cannot do this in the realm of sports. That's against the rules. Then you have blood doping, which at different points and in different capacities has been either allowed or not allowed. It's the same thing, right? If you train at altitude and then you develop blood that has more oxygen carrying capabilities

Starting point is 00:50:20 and then you infuse yourself with that, that's kind of quadrant two. Then you have quadrant three, which is like sleeping in an altitude simulation tent. And there are different paradigms. What are the axes? Sorry, I missed the axes. Forget about the axes for now. It's just comparing four different options. And then there are a few others. And it's just to point out that the... And again, I don't want to dwell on this too long. You can look at four approaches to achieving the same ends with different legal status or different status with respect to the rules, which doesn't automatically mean all of them should be allowed, in my opinion. But secondarily, there are countries that do not have Olympic-sized swimming pools to train in and nonetheless have athletes who are sent to the

Starting point is 00:51:05 Olympics to compete in swimming, right? So I do think that there are, in some respects, incentives that are aligned with athletes to preserve the current state of doping. Because with more money, with more state support, you can actually game the system more effectively than not necessarily lesser players, but less resourced players. So I would just say that I don't think all athletes would want to agree to, nor teams, nor states, to say the All-Drug Olympics. If people haven't seen the All-Drlympics skit from saturday night live they should look it up it's actually pretty entertaining so let me poke on this a little bit because let me add one more thing then you can poke on this too i would also say definitely i'm

Starting point is 00:51:55 not a doctor i don't play one on the internet but people should muscle mass is good to a point preserving muscle mass avoiding age-related muscle atrophy, like sarcopenia, super important, bone density, et cetera. But there are arguments to be made that stepping on the gas with anabolism could be contraindicated for longevity past a certain point. So I would just say there's a balancing act between sort of autophagy and a number of things we know work for longevity as it stands right now, at least in mice and possibly in canines. And that balance is something I think people should look at. There will be a future guest on this podcast, Dr. Matt Cabraline, that conversation is going to get into a lot of that. But please

Starting point is 00:52:46 feel free to push back or tease apart. I just want to poke on one thing, just one thing. Actually, I love this. It's great. I'm learning stuff also. But the framing of it in terms of athletes and the Olympic Games or drug Olympic Games and so on, the thing is, as you're aware, in this century or in this phase of humanity, we're moving away from spectator sports. And I don't really care that much about the Olympics or the NFL or something like that. But I do care about physical fitness and running and lifting and so on and so forth. And fine for somebody who wants to go and do it professionally. But I do care about the average person's health.

Starting point is 00:53:22 And for the average person or any you know, any person that's not a game, the absolute metric is what is their personal muscle mass? What is it? You know, when, when, when a hundred people run around a track, maybe one of them wins, but all of them, the other 99 also get a cardiovascular benefit from that. And that's kind of what I'm focused on is not the zero sum aspect of who wins this zero sum competition, where it's like this artificial and constrained environment, but rather the non-zero sum of how do we improve people's health across the population generally. Even if it is true that these guys who are like extreme elite competitors have something to teach us broadly, like nothing on the field really matters to anybody outside the field beyond the

Starting point is 00:54:05 entertainment, unless there's some cool discoveries that come out of there and we're curing testicular cancer or we're having treatments for them that make them, you know, run around like Lance Armstrong after, after his thing. That's, that's kind of where I'm coming from. Yeah. I think we're more on the same page than you might imagine. The, yeah. What I would say also is the point I'm making is that the dose makes the poison, right? Paracelsus with so many things. And this includes a volume of exercise. It includes drug intake. And much like we were talking about technology and looking around corners and seeing what will be obvious or at least widespread, say five years from now.

Starting point is 00:54:45 You can do that with performance enhancement in sports very easily, too. You look at racehorses, and then you look at, say, patients with wasting diseases who are using various interventions because it is their, or they view it as their means of last resort. And then you have bodybuilders, and then professional athletes, and then you have rich people, right? So if you just kind of track that progression, you can spot a lot of things super early. I mean, you can spot modafinil 10 years. That's a great funnel. Yeah, you can spot modafinil, provisional, things like that 10 years before it's widely known as a possible performance enhancer for cognition,

Starting point is 00:55:22 which I would not recommend people do, by the way. It's still pretty poorly understood. Honestly, just monitoring that funnel and publishing that funnel on a quarterly basis would be one of the most important newsletters. Yeah. That would be an awesome funnel to kind of track. I put it into the 4-Hour Body when I wrote it in 2008, 2009.

Starting point is 00:55:39 It's still reliable. You can track that stuff. It does require some manual labor just because uh your competitive horse trainers aren't just going to sit down with you over a cup of tea the first time you meet and tell you all about their doping regimen right for a lot of a lot of understandable reasons we need a different word though but i agree with you on like you know the exact dose of something more is not always but i agree with all that the only thing that i'm saying is just and it seems like a small thing but it's like i just

Starting point is 00:56:11 don't like to even use words like doping shadows cheating etc because that is conceding territory to folks that want to pathologize improvement. That's the only thing I'm coming at. Is it like to sort of pull that chip that's that limiter chip that's in our heads, you know, and remove that chip and basically like actually no limits. Well, so I think it is important to develop an awareness of the words you use, because at least if you understand those words, they sort of form the concepts and the boundaries of your thinking, at least the boundaries of what you deem acceptable and unacceptable, right? So you should be very aware of the language you use. Again, I don't want to dwell too long on this. I will just say that if the opposite of pathologizing use of,

Starting point is 00:56:59 just to choose one class, like anabolic androgenic steroids. If the opposite of pathologizing it is freedom in the form of anyone taking however much they want, whenever they want, I don't think that swing to the opposite end of the pendulum is going to be a net positive for people. So the awareness is important, but as is the due diligence, right? I have used a whole slew of these compounds post-surgically to ensure full recovery of my left shoulder, which I had completely reconstructed. And I've talked about this publicly because I'm not ashamed of it. I think it was absolutely strategically, medically the right thing to do. I'm not recommending people do that.

Starting point is 00:57:44 There are both medical and legal consequences that can follow from all these things so speak to your gp speak to your physician if you want to discuss this kind of thing but i just want to make it clear that i'm not just an observer in this sphere i do think there are times and places where it makes a lot of sense to use these extremely powerful molecules, but they can be misused with long-term consequences. Totally. So two things there. One is the reason that the Soviet example is actually quite good is they would also kind of jump to, oh, so you're for capitalism? Well, then everyone can auction everything at all times and everything is always, you know, prices and evil hedge funders will take

Starting point is 00:58:32 your house. And the thing is that all I'm saying is let's not pathologize this. Let's not put this in a box. Let us actually think, I mean, you don't have to go to the other extreme of roided up whatever whatever you know the thing that jumps to people's minds there's an entire infrastructure an entire continuum that can be built out when we're not just balled up in the corner of game of shadows and cheats and doping and and pathologization that's all i'm saying it is a great title though it is a great title just the fact that you remembered it and have said it so many times it's a good title you got to be i mean i know it's not your style it's a great title that's yeah yeah well no no that's it's like death tax it sticks it sticks in your head right it's deliberate so that's exactly right i

Starting point is 00:59:19 mean here there's actually this amazing app you know that people it came out recently dolly too okay yeah and what i love about have you ever heard about this i have i have access to you There's actually this amazing app that people... It came out recently, Dolly 2. Yeah. And what I love about... Have you ever heard about this? I have access to Dolly 2. So you can synthesize. You have access here. Great, good.

Starting point is 00:59:31 And there's also open source. Not open source. There's more public versions that people can master out. So the thing is, that shows the power of words more... To somebody who's of a quantitative bent more than anything i could say because you can write three words into dolly 2 and get an image out from that and it's it's effectively like an extremely compact programming language i say like i don't know bology you know improving musculature i don't know something like that you know, improving musculature. I don't know, something like that.

Starting point is 01:00:05 That would be funny. Whatever, we'll see. But the point is that if you were to actually write that out in computer code to build some of those images, it would be thousands, tens, hundreds of thousands of lines of code for some of them. But you can literally do it in like three words. And, you know, when people say, oh, you know, I'm not a number, I'm a name. There's actually a wisdom to that because words

Starting point is 01:00:25 are like these super high dimensional vectors. And you can combine them to these really complicated manipulations in just a few phrases. And what's kind of interesting is that three different technologies are all converging on the power of really, really short phrases. And those are AI, as we just talked about, you know, where you just give a few words and the computer is able to figure out all of this stuff. Crypto, where you have 12 words or 13 or 14 words in a mnemonic, which stores all of your cryptocurrency, right? I mean, literally, you could store like $100 million in like those words, you know, you could store all these possessions. And then obviously, social media, where a few words can be a hashtag or a phrase that starts an entire movement and that is on every building and everybody quotes and so on and

Starting point is 01:01:11 so forth. So those three points, by the way, why those three technologies? I know it almost seems trite to say AI, crypto, and social, but those three technologies are, in a sense, cognitive or social technologies in a way that rocket ships and internal combustion engines are not because those don't interact with humans these do you know these touch humans in different ways so basically i used to kind of think that all the word games that they played in academia in the humanities weren't that important and it just bore me as to why they were doing this.

Starting point is 01:01:51 And now I realize it's insanely important because a slight tonal shift in a word, that Russell conjugation thing we were talking about, you would get a totally different looking Dolly 2 image based on the tone. And that makes it concrete. Building our own vocabulary and thinking about it consciously from the beginning, sometimes coming up with words. For example, you know, this guy, Peter Turchin, okay, who I like some of his work. Do you know him? I do not. Have you heard of him?

Starting point is 01:02:15 Yes, no? Nope. So he came up with a term which he calls Cleodynamics. Cleodynamics is, Cleo is like the muse of history. And essentially the concept is he named this term. It's like the science of history. It's like a quantitative form of history. And so he just took that term Clio, and he put it in front. And it has kind of a nice sound to it. And it's kind of cool. And he just made that word. And he's using that word. And I think it's a great word, right? And what this is similar to, by the way,

Starting point is 01:02:43 is if you're an engineer, and you're writing code, what you'll find is, and you probably do this actually when you're writing your book, you'll find that you write a hundred or a thousand or 5,000 lines of code. And there's certain concepts, certain nouns and verbs that you keep using. And then you, you know, sometime on line 3,700, you're like, oh, that noun is actually the core data structure of my entire program and that verb is the core function of the whole thing it's a little bit like you're writing a book and on chapter three you're like wow that should be like the title of the chapter yeah yeah you know you you abstract that out you that's how a lot of people or the book yeah yeah they cut or the screenplay right right. They come up with the title on page 78, where it somehow emerges as a theme with a label.

Starting point is 01:03:30 Let's start with the simple question, which is, what on earth is a network state? We were just talking about words, and you know something which is chosen for this purpose to kind of have several different definitions so i've got i've got a definition of it and then i've got like several different ways of talking about it so here's a definition and then it won't seem informative then i'll go through it or at least it'll seem like a mouthful so a network state is a social network with a moral innovation, a sense of national consciousness, a recognized founder, a capacity for collective action, an in-person level of civility, an integrated cryptocurrency, an archipelago of crowdfunded physical territories,

Starting point is 01:04:14 a virtual capital, and an on-chain census that proves a large enough population income and real estate footprint to attain a measure of diplomatic recognition. Okay. Now you might be like, Jesus, that's not a sentence. That's a paragraph. That's a, you know, right? And the thing is that there's tons of things which are very simple to describe or interact with, but very complicated to implement. And, you know, for example, Google has this really

Starting point is 01:04:45 simple interface of you type something into it, but to implement Google is actually quite difficult. And in particular, if you asked me to define not what a network state is, but what a nation state is, people will kind of have a tough time doing that. You know, they might say, oh, it's kind of like regions on the map or something like that. It's a country. But when you want to give like a precise definition, it's not like a circular definition. The term nation state, for example, first, nation and state means something different. Nation comes from the root word, same root as like natality. It's like from common birth. And so a nation, that's like a group of

Starting point is 01:05:25 people with a common culture like the japanese people and they have a japanese language and japanese culture and they're ethnically japanese and so on and so forth and then the state is the system of laws and government that that nation sets up to manage its own affairs. And they're as different as, let's say, labor and management in a factory. And the same nation could have very different states on top of it. A place like France is aware of this because they have had many different kinds of governments and so on on top. But in our day-to-day language, the nation and the state are conflated. For example, you'll hear the term national security or multinational or national as a synonym for federal.

Starting point is 01:06:14 As national meaning like the entire, but they're actually conflating things because really a multinational, it's not like it's operating with the Japanese nation and the Catalonian nation and the Kurdish nation and so on. It's multi-jurisdictional. It's operating in this jurisdiction and that jurisdiction. So the word underneath has kind of gotten abused. Similarly, like national security, it's really like state security. It's not really the security of the people. They're sort of abusing a term, right? So there's been this drift and this kind of confusion. And the reason for that is that states want to identify themselves with the nation in the same way that, like, you know, management wants to identify itself as being the same

Starting point is 01:06:56 as labor and to not have a division between the two. Now, sometimes that's good and sometimes that's bad. It's good if management is actually aligned with labor and economically aligned and so on. It's bad if management is disaligned and in the stereotypical case of like the evil CEO exec with the golden parachutes, that's a bad case, right? And so in the same way, when people try to make this extremely tight identification between the state and the nation, it's not actually the case. The people can have a totally different government if they so choose. They shrug it off, and that tiny layer

Starting point is 01:07:29 of folks that are in the government just gets deprecated and a new government is set up if people pull their pointers away and they set up a new thing. That's what happened, for example, in the former Soviet Union when the Soviet governments fell. Okay. So my point is that these things that we interact with on a daily basis, we don't usually have to go to first principles and define them from scratch, right? You know, if we just talk about the definition of a nation state, this itself, the reason I want to talk about that for a second is it will be more clear why the nation state is a complicated thing and why a network state has a

Starting point is 01:08:06 multi-clausal definition, because each one of those clauses takes care of a different failure mode. Because there's all these different people who've tried to start new countries, and just like a venture capitalist deal will have this term and that term. It'll have drag along, it'll have liquidation, it'll have pro rata rights. And so on every single term in this contract, anticipate some conflict or failure that had happened in the past. And that's why it's a more complicated contract. And the same way this definition of a network state goes through a ton of different kinds of failures from, you know, just putting a flag on an oil platform and trying to call that a country to going and trying to start a war and so on. There's many different ways that people have failed to start new countries. And this definition I think is constructed to route around all of them.

Starting point is 01:09:00 Okay. So that's why it's a complicated definition. All right. But first, let me just kind of talk about like the definition of a nation state. So first, the nation itself, we just talked about how that is this body of people that's united by common descent, history, culture, what is a nation? You can actually drill into it. And all of these thinkers, all these famous thinkers, Rousseau and Hegel and Marx and Mill, all these guys that you read about in school, you may vaguely remember it, all of them are now actually something that an entrepreneur or someone who's very applied would have to think about. Why is that? Because if in the 2010s, we started to ask a

Starting point is 01:09:46 question that we had never really asked in the 2000s, and that question was, what is a currency? Okay. In the 2020s, we're going to start asking the question, what is a nation? And it actually becomes something where the thing we took for granted that we thought of as- Sorry, Balaji, just a quick question. Yes. Nation or a state? Nation, nation first what is a nation what is a nation because the nation comes before the state you could have a nation without a state for example the kurds are a group of people that have a common ethnicity and culture and so on but they don't actually have a state

Starting point is 01:10:21 the catalonians you know they're in the territory where the Spanish state governs, but there are people without a state. And actually, when you think about this, the United Nations is actually a misnomer. It's more like the selected nations that happen to have their states. There was actually a guy, the guy who's currently running Kazakhstan, and he's like, we can't endorse the principle of self-determination for every nation because we'd go from 192 in the UN to like 600 nations because all of these new states would pop up rather because there's all of these hundreds of nations around the world that do not have their own state. You know, the thing is when you start seeing it this way, it's a lens

Starting point is 01:11:00 on the map that most people just don't think about. You're turning a constant into a variable. And that is when we talked about earlier about volatility increasing. The biggest way that you can increase volatility is you turn something that you were at total consensus on and 100% of people agreed on into something that only 80 or 70 or 60 or 50% of people agree on. And when you do that, when you take that constant, you turn into a variable, all kinds of assumptions change. If you're a programmer, for example, the difference between operating and assuming that it's just the United States or just in English versus coding your program to work in every country and every language is an enormous change.

Starting point is 01:11:42 It can be done, like it's a significant difference concretely why do i say constants are becoming variables well there are pc examples i can point out and there's un-pc examples let's do both all right let's do both okay well constant two genders variable and genders okay that's a great example of a constant that became a variable where there was something that was simply an assumption in the 2000s that very much turned into a variable and literally all kinds of backends and, you know, databases had to get rewritten, turning something that was assumed as a constant into a variable. Another example is the U S dollar before Bitcoin. No one really thought that that was a variable. And now it is. It's a huge variable. It's something that a significant fraction thinks of every day as

Starting point is 01:12:32 something that they can swap in or swap out to at some percentage. And it's no longer the thing that you must reform. It is the thing that you can exit from. And once you start seeing this, that constants are becoming variables, you start seeing it across life. And once you kind of start seeing this, that constants are becoming variables, you start seeing it across life. And very roughly speaking, you have, I'll just use this phrasing, all right, but you have the woke and the tech who are both sort of in different ways, disaligned with each other, but also aligned with each other in terms of turning all socio-political constants into variables and all economic things into variables. Let me give you the tech side because it's easier to talk about. For example, is a meeting, is it in person or is it virtual? Now we have to actually choose, right? Oh, when you're reading

Starting point is 01:13:17 that book, are you reading that book physically or are you reading the digital copy? Simply the digital version of everything starts introducing combinatorial complexity, right? Oh, you're talking to somebody? Was it on the phone? Or is it one of these like 10 different apps? Are you watching the news? Well, it's no longer CBS, ABC, NBC, but it's like whatever number of different things, okay?

Starting point is 01:13:37 Now, there's a good to that. There's alternatives. There's choice. There's all this type of stuff. Obviously, people have said there's a bad. Oh, my God. You know, people are living in their own filter bubbles. Really, they're mad that there's more than one filter bubble. But basically, this is great decentralization, great fragmentation.

Starting point is 01:13:50 So all these constants are becoming variables on the economic side, and tech is pushing that. And then on the political side, woke is pushing that. And lots of things that people just sort of took for granted, for example, the police, right? Do you have a society with police? People kind of just thought of that as a constant. And then you have a significant double-digit percentage of the population, less today, but that was actually saying defund the police, right? Abolish the police. And you have an NYT op-ed that says, yes, we really mean defund the police. That's a big variable. That's a huge, enormous change. That is what I call in the book, I call that a moral flippening or moral inversion, where something that was good

Starting point is 01:14:32 becomes bad, or bad becomes good. And when you have something like that, you start to actually create different nations. Because you have the fundamental premises of what are good and bad in a population change. And the US is not really a nation state. Arguably, it never was, but it's not really a nation state. At a minimum, it's a binational republic, which has the red and blue nations underneath it. And you can see this. There's graphs. For example, there's a CGR article from 2017 that I link where you can actually see on social media that the red and the blue are literally different clusters, and it pops out to you. They just literally only link to each other. And one way of looking at this that's really unambiguous is if you look at marriage

Starting point is 01:15:23 patterns. people typically will say that they will marry across their race, but you know what? Democrats will only marry Democrats to a higher percentage, and Republicans are tending to only want to marry other Republicans, and that is being growing, right? And the thing is that you iterate that out one generation, and what happens? That becomes ethnicity. Ideology becomes biology. If your political party is so important to you that you are not going to marry outside it, then in one generation, it becomes at a minimum like Protestant Catholic or Sunni Shiite or something like that, Hutu Tutsi, whatever. It becomes something that's actually tribal as opposed to ideological. The ideology changes the biology. So these are things where they're extremely deep questions where you just

Starting point is 01:16:13 didn't even have to think of them as variables because you're born into a world where they've been fixed as constants. How does the network state solve for this or codify it up front or allow for those types of moral flippinings? The short answer is that it says that the nation is the network that forms online that is defined by the moral premises they share. And you literally have a survey, which is the good-bad survey. And sometimes explicit is like a survey, which is the good bad survey. And sometimes explicit is better than implicit. For example, you have the founder of this community actually has something which is like, I believe, you know, capitalism is good, bad. Law enforcement is good, bad. Entrepreneurship is good, bad. Human improvement is good, bad. Two genders are

Starting point is 01:17:03 good, bad, and so on and so forth. You have a set of preferences, right? And some of them are going to be not the extremely hot button issues, but they're going to be things like carbs, good, bad, and so on and so forth. Okay. And I'll come to that actually. I know it sounds funny, but one of the things about this is once you define a community on the basis of what they think is good and bad, it's so strong. It's ridiculously strong because they agree on the basic premises. And then they can crowdfund. You don't have politics in the same way because they don't have internal disagreement. They have alignment. They agree on what the good world should be. And then they can crowdfund things. They can appoint leaders. They are essentially organically aligned for a cause. And that filtering of the internet into these

Starting point is 01:17:53 network nations is actually the first step. What it's not, and the reason this, the whole, you know, the definition is all these clauses to give you some examples of failure modes, right? If you go to YouTube and you look at like how to start a new country or whatever, you know what all the things start with? Like they're kind of joke videos, but they're kind of funny. You know what they all start with? Get some land. And they're like, but all the land is spoken for, blah, blah, blah, blah. So it just immediately, like the first step they take is the wrong step. Why? Because land is the most contentious, zero-sum, insanely fought over thing. I mean, you know, like Russia and Japan are fighting over like the corrals and

Starting point is 01:18:35 like, you know, there's little islands in the Mediterranean that Turkish and Greek states are fighting over. People fight over land so much over the stupid, you know, Canada and Denmark were fighting over this stupid uninhabited piece of land. Did you know what I'm talking about? Like the sun. No, it doesn't surprise me, but humans like to fight. Yeah. Hans Island. Okay. Here's the thing. Why would they fight over something like Hans Island? If you go and look at it, okay. It's this uninhabited, frozen island in the middle of nowhere. The non-obvious thing, very non-obvious, I think, is that they can see it on a map. In the 1800s, there was this fight in the conflict that was called 54-40 or fight.

Starting point is 01:19:16 Are you familiar with this? Say that one more time. Probably not. 54-40 or fight. No. I was stuck looking up the Falkland Islands because I was thinking about the Falkland Islands in this context as well, the Islas Malvinas. But I don't know 54-40 or fight. Okay. So 54-40 or fight was basically this mid-1800s conflict over the boundary in the

Starting point is 01:19:41 Pacific Northwest. And the thing is, is basically like the Americans wanted the border with what we would now call Canada to be at 5440, or they would fight a war. Now, in actuality, I think it turned out to be like the 49th parallel rather than 5440. But the thing is, think about that. The latitude and longitude, this thing, this map construct that everybody could share, became something that lots of eyes were on, and then they were fighting over it. Now, you might say that's like the most obvious thing in the world of biology. Of course, they'll fight over a map, they can see a map, etc. But let me complicate that picture. First is, the map was actually not always visible. In know pre-1492 much the world was unmapped

Starting point is 01:20:27 the entire quote new world was not mapped and maps actually just got better and better and you know for a long time there was like there be dragons you know there were parts of the world that were unmapped there was what's called terra incognita and there was this time of mystery it was the frontier but as a frontier to the nth power because you didn't even know the land existed. And it kind of seems like we'll never actually have that again until we get to space. But I argue it's actually existing again already in a non-obvious way, and that is on the internet. Point is, when people can see something, they will fight over it.

Starting point is 01:21:00 You know, the concept of mimesis, right? If they can see it, they'll fight over it. If they can see Hans Island, they fight over it. They see a border, they fight over it. The concept of mimesis, right? If they can see it, they'll fight over it. So you can see Hans Island, they fight over it. They see a border, they fight over it. And you can see, for example, the Franco-German border between France and Germany. The border you can't see is the border between Twitter and Facebook. And what do I mean by that? What is the border between Twitter and Facebook? Well, Twitter has like 330 million users. Facebook has 3.6 billion. And for each person, you could define the border as for their time spent on. So let's say there's that's 3.6 billion Facebook users, 330 million Twitter users. The total is 3.93 billion max. It might be like 3.7. There might be an overlap there. Okay.

Starting point is 01:21:40 For each person, you can define a zero to a hundred% in terms of the time that they would spend on either their 100% Twitter or 100% Facebook. The border region would be those people who are 50-50. And that might be a group of 70 million people in the world who spend exactly 50% of their time. And there's people who are farther from the border who are 30-70 and people who are really far from the border near the capital who are 100-0 and vice versa. Okay? What I'm describing there is literally something that you could compute. It's not an abstract thing. If you had access to all of Twitter's dataset

Starting point is 01:22:11 and all of Facebook's dataset, you could compute this. Here's the thing. Nobody has access to both. So nobody can compute it. Or you can estimate it and so on, but unless Twitter and Facebook got acquired, they wouldn't be able to literally find out who was on the border region.

Starting point is 01:22:28 They could do sampling and stuff, but there's a cloud that has descended. These gigantic networks cannot really see their borders that well. They can see themselves, but they can't see what people are doing outside. They have less control, in a sense, and less visibility. And so instead, what they fight over are the visible things,

Starting point is 01:22:52 like the use of the network and so on and so forth, but they're going to fight over border regions less. The only way they can fight over a border region is to make their product so attractive that they can pull people from that border region. Now, by the way, Lestat said said that these are like trivial things to talk about, Twitter is 330 million people, Facebook's 3.6 billion. Both of those are bigger than France and Germany combined.

Starting point is 01:23:11 These are enormous, enormous networks. It's like a huge chunk of humanity. And the fact that we cannot see the border region means that the entire geography of like how humans operate is actually changing. You have to kind of remap how you think about geography because in physical space, for example, two people, you know, they're near each other, there's a physical distance metric and so on. In digital space, it's like a bunch of islands that

Starting point is 01:23:36 can snap to like I can be near you as I am right now and then snap away and be really far. And that applies not just for individuals, but for entire continents. So for example, in the physical world, Russia is basically always going to be adjacent to Japan and Ukraine and Iran and so on. Russia, the country, doesn't move around that much. I mean, its borders can expand and contract. With the Soviet Union, it's bigger. When the Russian Federation is smaller. But it's not like it's suddenly adjacent to Argentina. It's not suddenly adjacent to Mexico. It was involved in the Cuban Missile Crisis at the height of its power, but it's not like projecting power all over the world. By contrast, somebody like Vitalik of Ethereum, his network of people, or the Solana network, suddenly this network can be adjacent to another network

Starting point is 01:24:25 solana can start taking users from ethereum it's like this huge island of like 30 million people just surfaced out of the ocean next to japan and started like pulling people from them godzilla yes godzilla anyway yeah exactly right so it's like atlantis is real digital atlantis is huge island what the heck and and it can then disappear and vanish and you can also vanish your your thing can kind of be like hey you know we want to we want to cut off those network relations we want to move our island somewhere else so the thing is that i'm downloading one of about, I don't know how many, 10, 15 different things that turn constants into variables. One of them is the nation that we take for granted. The single group of people is breaking up into multiple nations that are defined by networks. Another is the currency is breaking up.

Starting point is 01:25:18 Okay. A third is the geography is changing. A fourth is the moral principles that underpin society are changing. And so when all of those things are in flux, you kind of need something to catch it on the other side because otherwise what people will do is they will sort of try to assert that old thing that just doesn't exist anymore. It'll be something that does not acknowledge the reality of the situation. It's like closing the barn door and then expecting to get all the horses back inside when there were forces that were more powerful than that thing that spread them all out, those entropic forces. You have to kind of go to where those horses are and loop them up and maybe have new ranches or whatever there to

Starting point is 01:26:02 extend the metaphor. Okay. So what I'd love to do is, and this is just how I like to think about teaching in general, like if you're teaching someone a golf swing, like you show them once, you do it side by side, then you have them take a couple of free swings and then provide feedback after that. What I'd like to do is just paint a picture or get your help to paint a picture of where we might be going. And then we can back into digging into some of the nuts and bolts and concepts of the network state.

Starting point is 01:26:33 So I'd like to break that into two pieces. So let me just set a framework, if I may. So it could be five years, it could be 10 years, or whatever timeframe. But let's just kind of pick a timeframe. Maybe it's five years, but you can pick. The first is just take a few minutes to paint a picture for where you see America in a handful of years. And again, you can pick the distance just so we have an idea. And you have had some predictive accuracy with a number of things over the last handful of podcast conversations. So just to set the stage for like, okay, if your

Starting point is 01:27:10 default is kind of do nothing, don't move, this is what you might see coming based on A, B, and C. And then just a few minutes on that. And then after that, painting a picture of if you were taking the pro side of a bet. So let's just say you're talking to some politician and they're like, ah, biology, you're full of shit, blah, blah, blah. US is going to be this, this, and this, and not much is going to change. And I'm going to bet a million dollars that this network state thing is not going to be a thing. And you said, okay, I'm going to take a million dollars on the other side of the bet. And here's the picture I'm going to paint as a possibility. And because when I hear network state, you know, a lot of things come to mind. I'm listening very carefully. I'm thinking on one hand of like e-citizenship in Estonia and how that might be tweaked because

Starting point is 01:27:59 most of the people who are getting this e-citizenship have no plans to actually reside in Estonia. And then I'm thinking on the other hand of like Christiania, this basically started as a sort of squatters territory within Copenhagen in Denmark that has its own social structure of sorts, its own economy of sorts. I have a lot of these free-floating ideas, but if you could just talk about like, okay, a handful of years out, what your vision of the US looks like and what might change. And then if you had to paint a picture of like, if I had to bet on a nation state coming into existence and getting some traction, this is what I could see happening. And then we can back into the rest of it. So let me start with the first part first. This is just a scenario analysis. Don't want to say it's a base case. Let's say I think it's probable. I can't say it's a hundred percent. And there's always, there's things that happen

Starting point is 01:28:53 that are reactions to trends you predict, but it's hard to predict exactly what that reaction is, but here it goes. I call it American anarchy, Chinese control, the international intermediate and the re Recentralized Center. Okay, this is my sort of base level worldview for what happens the next five, 10 years. So what is American Anarchy? So I actually wrote about this for Barry Weiss's newsletter last year, How We Changed Our Minds in 2021.

Starting point is 01:29:17 But the short version is some groups think everything will basically be as it is, the so-called, what Tyler Cohen calls base raiders. They just think everything is going to be the same. Everybody's kind of agitated or paranoid or whatever, and it's just all going to be okay, whatever. And then you've got folks who think that the US is descending into either fascism or communism or something like that, essentially right or left authoritarianism. And they were reacting to that. And they're like, oh my God, you know, and you're seeing this every single day on social media, people are pushing back against this. And the thing is that while those two groups all share, you know, they've got huge differences. One thing that is true verbally,

Starting point is 01:30:00 rhetorically, conceptually, cognitively is even if there's left and right vectors that point like this, they're both pointing anti-authority. They're pointing against hierarchy. And so the left might say, we are all equal. And the right might say, you ain't the boss of me. But both of them point towards this kind of concept of, you can't control me. No hierarchy is legitimate. I do not trust authority, and so on and so forth. That is a subtle vector sum on one axis. Even if the left and right cancel, the anti-authoritarian aspect is summing. And if that is the case, then it's the thing that is not conceptualized that we're actually driving towards. The consensus is for anarchy. Because the left and the right can agree that the hierarchy is

Starting point is 01:30:48 illegitimate in some way, that the institutions are illegitimate, whether it's institutionally exist or if it's all the deep state. Both of them are tugging on it in a certain way where there's a vector sum towards taking it apart. And the thing about that is American anarchy is like the ultimate in liberty and equality. Everybody's equal because there's no bosses. Everybody's free because there's no laws or hierarchy. You know, there's an aspect of this that is the ultimate of democracy and the ultimate of capitalism. Everybody's doing whatever they want.

Starting point is 01:31:22 And that strain exists in American culture on kind of both sides. You know, there is a deep liberty, you know, kind of thing. And then you've got folks who will, you know, actually say anarchy is good. And they might say it as good as anarcho communism, or they might say crypto anarchy, where you're, you're imposing, you know, something like Bitcoin on top of it, basically, it's like, the physical world is very chaotic, but you have a digital world and digital property rights that are there for some kind of structure online. But the issue here is we have sort of seen what the transition to anarchy looks like in many countries around the world over the last couple of decades. There's a book by Barbara

Starting point is 01:31:58 Walter called How Civil Wars Start, which, you know, there's a lot of things I disagree with her on, but I actually give her credit for essentially pointing out that many American interventions and other interventions overseas, NATO and other stuff, over the last few decades, they've been in the intent of spreading democracy and they've caused anarchy. Like Mexico is way more chaotic than it was. Ian Grillo has this book called El Narco, where he talks about how Mexico's democratic transition attended this huge burst in the narco-terrorism and violent gangs and so on and so forth. Tunisia, Libya, Egypt, a bunch of these countries have essentially, we've sort of seen them go from reasonably okay to kind of anarchic. And there's a playbook for how that looks. And if you before and after, if you just teleported somebody from 2005 or 1995, 97, essentially today, you know,

Starting point is 01:32:56 you can track it back and be like, well, Oklahoma city happened in 1995. And there's a Unabomber. It's always something that you can say was a trend line all the way through. But Visual Capitalist, for example, has a graph of riots and shootings and bombings and stuff like that. And it's up and to the right. It is something where it's like surge in 2020 and it came back down, but it's rising. And it reminds me a lot of crypto, where what happens is it surges and it crashes and then people write it off and they're like, whew, it's over. You know, like that crypto thing is done like, it's over. That crypto thing

Starting point is 01:33:25 is done. But it's not done. It's coming back. And that surge of anarchy in 2020 that came down, yeah, 2021, 2022 is more peaceful than 2020, but it's way more anarchic than 2017, which is itself more anarchic than 2012. So American anarchy is on the rise. And what does that actually look like? There's lots of ways it can play out. I happen to think it's going to be something like maximalists versus wokes in the US. There's lots of different triggers. Okay, this is just a sci-fi scenario right now. I'm just spitballing. And by maximalists, you mean like BTC maximalists or what kind of maximalists? Yes, Bitcoin maximalists versus wokes.

Starting point is 01:34:01 Are there enough Bitcoin maximalists in the US to constitute a critical mass for that? So I think Bitcoin maximalism is the most important ideology in the world that people don't know about. Okay. And why do I say that? I can hear people clapping through the silence. A lot of people listening are going to be getting out of their seats for that one. So please continue. Well, the thing is that from the outside, people would think I'm a Bitcoin maximalist, but it's a log scale. To a truly devout, orthodox Bitcoin maximalist, I'm a status cuck. Okay. So I'm, because I'm fundamentally like a pragmatist, basically, right? You're a very middle of the road, crypto anarchist. I'm fundamentally like a pragmatist, basically. You're a very middle-of-the-road crypto-anarchist.

Starting point is 01:34:46 I'm just kidding. Well, but I'm not a crypto-anarchist. The thing is, in this book, I'm actually not a crypto-anarchist. No, no, what you're saying is actually, it's extremely important because, all right, there's so much I could say. Let me see if I can download it. First is, one of the chapters in the book is centralization, decentralization, re-centralization.

Starting point is 01:35:14 The thing is, when you say re-centralization, what happens is both the centralized and decentralized guys look at you like you've got four eyes. The centralized guys say, wait a second, we're running America, we're running China, the U.S. establishment exists, CCP exists. Why would you want re-centralization? We have an operating centralized system here okay and the decentralized guy would be like why would you want re-centralization you know we're talking about taking power away from these totally illegitimate establishments with bitcoin we're talking about breaking the state and defunding the government and so on we're giving them defunding the police we're defunding everything right and you know we're talking about breaking these tyrannies and getting away from the

Starting point is 01:35:46 surveillance state. Why would you ever want to rebuild something like that, right? So the thing is that re-centralization has the smallest constituency right now, but I think it's the right constituency. And the reason is, I believe, the helical theory of history. So the linear theory of history is we're just progressing. We're just improving. We're getting more equal. We're just improving. We're getting more equal. We're leveling up. Everything's getting better and so on and so forth. There's something to be said for this. On some axes, on some measures, humans have been improving. Our knowledge of math, for example, that is a roughly cumulative chart. It has drops when you

Starting point is 01:36:18 have the dark ages and stuff like that. It's not all the way up to it, but it's up and to the right. Then you have the cyclical theory of history, which is—and actually actually one of the things I talked about in the book is about the left and a right and a libertarian cycle of history. But the right cycle of history is strong men create good times, good times create weak men, weak men create hard times, hard times create strong men, where it's basically like this Nietzschean band of Spartans build- This is the foreturning, right? Yeah, yeah. So this Nietzschean band of Spartans. They go and build a great society, and then these degenerates take it down, and then we have to, from the chaos and ashes, rebuild again, and so on. What's funny is the left has their own version of this, which is the zealous revolutionaries manage to fight the man and overthrow it, and then a Stalin-like figure comes and compromises the revolution. And the new boss

Starting point is 01:37:06 is the same as the old boss. And then it comes back to this, right? And then the tech libertarian has a version that's also like this, which is the startup founder goes and rebels against the bureaucracy. They managed to build an operational thing that is actually much more egalitarian, and it's got a flatter hierarchy and takes care of all the bureaucracy, and it's actually more competitive. And then what happens is the bureaucracy encrusts this and the libertarian founder rebuilds the state. And one of the points I make is all three of those cycles are the same cycle because it's not just the right cycle of being strong and it's not just the left cycle of being zealous and it's not just the libertarian cycle of having an innovation. You kind of need all of those at the same time to actually go all the way around the cycle to

Starting point is 01:37:48 fight that establishment. So what do you think the US looks like in five years, just if we could paint a picture? Oh, sure. It's like BLM and Jan 6th all the time. You mean in terms of events or in terms of discussion? In terms of there will be mobs that are gathered online. It's like stochastic network warfare between two groups. Is it five years? Might be 10 years. I don't know the exact timeframe. It could happen faster. It could happen slower. But fundamentally, I think the catalyst is if you look at interest rates and you look at the graph, have you ever looked at, look at like the longterm graph of interest rates?

Starting point is 01:38:27 Yeah, I have actually, but we should put it in the show notes for people. We should put it in the show notes because I just want to find this graph, a longterm chart. So if you go to this graph and you click max. All right. So this is trading economics.com slash United hyphen States slash interest hyphen rate.

Starting point is 01:38:47 Yeah. So United States interest rate, United States Fed funds rate at tradingeconomics.com, right? And you click max on this chart. I'm looking at max. Okay. And so what do you see? You essentially see something where over a 40-year timeframe, you have a trend which is very much down and to the right.

Starting point is 01:39:08 Yeah? Yep. And what that is, is it's basically, this is something where one of the things I write about is, and Dalio's actually also talked about this. There are trends that affect humans that are longer than the cycles that we're intuitively familiar with. For example, you're familiar with the cycle of your breath. That's a few seconds, right? You're familiar with a day. You're familiar with basically the seasons of a year. And that's actually what most people are familiar with. Beyond that, maybe the election cycle, you know, in four years, or the longest thing somebody might be familiar with, frankly, are venture capital funds or startups, which are like 10-year cycles. That might be the longest thing where you can run an experiment and

Starting point is 01:39:48 see a few reps of it in a five or 10-year time frame over your life, right? A venture capitalist might see hundreds or thousands of five or 10-year long experiments that most people don't really track things over that time frame. And any normal human cannot really track things over 40 or 50 years. You have to kind of dedicate your life to that, right? Same thing that's happening over multiple decades. You really need really good charts and stuff to see what the heck is happening. This graph is one of the best and most important because it's so unambiguous. And what it shows is essentially that the US economy, we have run out of juice. The Federal Reserve being able to print money and so on,

Starting point is 01:40:27 it just keeps going down on this trend like interest rates. And if you notice, every time they try to jack it up, it has to be pushed back down and kept down for longer and longer and longer, if you're seeing that in that graph. And now the next time when they're going to be forced probably to bring interest rates all the way to the floor maybe before the 2024 election and i think you will see very serious inflation as a function of that because they'll print money and we'll actually have genuine goods shortages because we have all these supply chain things that are hitting you have china doing its crazy you know stuff with the ports and the COVID lockdowns. You have the slow steaming regulations.

Starting point is 01:41:09 I do not know the slow steaming regulations. Basically, like some ESG thing. This is a great example of how the moral flippening. I'm getting this secondhand, so I might have it wrong, but I believe it is reducing the speed of cargo ships to cut down carbon emissions. Let me just define two things real quickly. So you mentioned Dalio, just for people who don't know. Ray Dalio, former, let's just call him head principal at Bridgewater Associates, at least at the time that I interviewed him, largest hedge fund in the world, about $175 billion or something

Starting point is 01:41:42 like that. ESG, environmental, social, and governance factors. So just that bleeds into what you were just discussing. So please continue. Just to summarize it, basically, we have more money. They're eventually going to need to print again. We have literally fewer goods where China's cutting off supply. There's sanctions. There's wars like Ukraine. There are COVID lockdowns. There's stuff like slow steaming, which is this huge self-inflicted wound by the ESG thing where every single container ship in the world has to slow down now. So you have a lot of things that can sum up into something where it gets nonlinear fast. And if that happens and you do have not just the inflation

Starting point is 01:42:23 we have now, but genuine serious inflation or even hyperinflation, that is when society comes apart in the US. Because, I mean, people have been so freaking angry at each other during the 2010s in a relatively booming market. Like in the 2010s, up until 2019, things were like decent economically, but man, were people mad at each other. And when there's like actual genuine scarcity, if that does happen, if physical goods are hard to come by and inflation has destroyed your currency and so on, and you have a country

Starting point is 01:42:53 where people are heavily armed and they're yelling at each other on social media, and you've got 50 governors, you've got a very potent cocktail for bad things. And we've sort of seen this in lots of other countries that, frankly, America was involved in, you know, partially destabilizing, like look at Libya or something like that, or Mexico or what have you, but that people just really do believe on some level, quote, it can't happen here. But I think American anarchy, unfortunately, is sort of where we're heading. And what exactly does that mean? You know, try and paint a picture. So first of all, in 1861, if you go and look at the map in 1861, you have the Union and you have the Confederates, and it's the ideological and

Starting point is 01:43:40 the geographical coincide. You have the North and you have the South. And we take for granted that the victory condition was for the North to just invade the South. Because by invading their capital and burning and so on, they didn't just destroy their supply chain, they also killed their morale. And eventually they got the entire South to concede and they could flip them ideologically and emancipation proclamation and reconstruction. They uninstalled the software in their heads and installed software with new moral premises. Same in World War II, invade Nazi Germany, denazify them, capture the capital. The ideological and geographical coincided, and that's how we think of wars as working. Now, today, though, if you go and look at a map of the U.S. and you look at Republican-Democrat, it's not in clean states. It's very fractal. It's at the individual

Starting point is 01:44:26 county level. You've got a little red here, a little blue here, purple here. It's extremely grouped together. It's fractal. And so what that means is that in physical space, these two nations are cheek by jowl. But in digital space, as that graph I showed you showed, those two social networks are just clustered apart in digital space. They're separated in digital space. Did I show you that graphic? Did you see it? Yeah, you did. Yeah, I got it. jowl, but in digital space, they're far apart. And that's where the battlefront is. And you can reconceptualize the last several years as a social war. Because if in a physical war, the goal is to invade territory, in a social war, the goal is to invade minds. And now when we think about cancellation, deplatforming, hashtags, et cetera, et cetera, the point is that what you're trying to do is get

Starting point is 01:45:27 a node on their side to flip from blue to red or red to blue. And how do you do that? Because they're now uttering your hashtag slogan, right? BLM or MAGA or something like that. They're uttering that slogan. That node is flipped. It's like capture the flag. You're seeing from their utterance that they are saying the thing that indicates that are now on your team, that are raising a flag over their company, et cetera. And you are able to cancel and silence those people who are saying things that are contrary to your view and so on and so forth. It is essentially something where, because you are constrained from using physical violence, since what are you going to do, invade a cornfield, invade a city that doesn't actually work, you're winning digitally. It's

Starting point is 01:46:05 digital warfare. Now, when I say constrained from using physical violence, as we've seen, that's actually, we're starting to see stochastic digital violence. You know, the Proud Boys and Antifa and so on punching it out in the street, that's actually an extremely unusual thing in the 90s and 2000s America. You just never saw left and right-wing militias punching it out in the streets. But you see that now. That's actually something which is de rigueur. I don't know. We're on the 100th or 300th. It's like an event. You wouldn't be totally shocked that that's happening, that political violence is happening in America, but it is. And it's on a ramp. And so you put all that together. And basically what I see is serious inflation, Bitcoin mooning, and then the US government

Starting point is 01:46:50 trying to freeze or seize the Bitcoin with something that's similar to executive order 6102. My question for you just quickly on Bitcoin mooning. So we have not yet seen, I don't think, in the charts, Bitcoin act as an inflation hedge. As an inflation hedge. In the same way that, say, gold perhaps has. Why would that be different this time around? So this is not 100%.

Starting point is 01:47:16 It's possible that I'm wrong about this. And I say this as someone who owns quite a bit of Bitcoin. Totally, totally. So here's the fundamentals argument for that. Sometimes there's certain things where the correlations only are visible over the very long run, like the interest rate graph we were just talking about. In this case, we haven't seen a long run with Bitcoin, but what we have seen a long run with is gold.

Starting point is 01:47:40 And the fundamental thing is Bitcoin's core value proposition is seizure resistance. That is to say, all stocks can be seized by hitting a button, as was done with the truckers, the Canadian truckers, as was done with the Russian sanctions on 145 million people. Billions, billions, you know, hundreds of billions of dollars, I think, was just frozen because those assets existed on servers that the US establishment had root control over. When I say the US establishment, that's not exactly the US government. There's the government, but there's also the network of people who are loyal to the US establishment.

Starting point is 01:48:17 Those are certain tech CEOs, certain newspaper publishers, and so on. It's all the folks who are basically supporting the current order. If those folks can hit a key and freeze your assets, you don't really own your assets. In a wartime scenario, as would happen with Russia just now, the assets aren't theirs. Now, outside the US, this has meant that a lot of countries are re-examining whether they want to have so much exposure to things that the US government has root access to. Powell actually had a speech on the dollar's role in competition just a few weeks ago, where he mentioned actually stablecoins. You can probably find a better version of this, but it's basically, rapid changes are taking place in the global monetary system that may affect the international role of the dollar.

Starting point is 01:49:07 A central bank digital currency is being examined to help the dollar's international standing. So that is not some random person. That's the chair of the Federal Reserve mentioning, A, that the dollar's international standing is being called into question, and B, that cryptocurrencies and stablecoins are related to the preservation of that standing. So when you zoom out, signal and noise, that's remarkable. Relative to where Bitcoin was in 2010, 10 years later, the Federal Reserve chair saying the dollar's role in international finance is being reexamined and cryptocurrencies are part of the mix of policy responses, that actually shows we are, whatever you want to call it, winning, certainly affecting

Starting point is 01:49:51 and changing things. So the thing is, only those assets that can't be frozen or seized are your assets. And Bitcoin has a root system that extends way outside the United States to hundreds of millions of people around the world that value it. And that is not the case for your frozen assets on a stock exchange, for your valueless dollars, your chair that you can't move across borders, and so on and so forth. There's a shelling point that has been built up, which is probably going to be Bitcoin. Now, why is it not gold? Well, the thing is, there's either physical gold or you have some certificate which has counterparty risk. So if it's a certificate, you're back to square one where it can be seized.

Starting point is 01:50:36 And even with physical gold, Executive Order 6102 showed that a sufficiently motivated central government can defeat gold. We have not yet seen that Bitcoin can be so defeated. It is in question. Executive Order 6102, for those who don't know, is FDR's gold seizure. So the very organized US government at that time was able to seize the gold and then resell it on international markets at a markup. It was just this giant tax on all Americans. And something like that, I think, is quite likely to happen because it just takes all the rhetoric on abolish billionaires, tax

Starting point is 01:51:11 these rich guys, blah, blah, blah, all that type of stuff, which is people won't care that someone took on risk to invest in Bitcoin or hold Bitcoin during the drawdown. They won't care about any of that. They will care if Bitcoin is a million dollars and the dollar is inflated and it's 2027 or 2028 and you need this to fund the US government. I know that sounds crazy, but think about it like this. In 2010, there are people who had seen the Arab Spring and they'd seen how important social media was abroad. If nevertheless, having seen that, you projected that by 2020 or 2021, the most important political issue in the world would be whether the president could tweet for a time period.

Starting point is 01:51:50 That literally one bit flip on a server in Virginia. You remember the thing we were talking about with mimesis and what people fight about? 54-40 or fight? This account, like the bytes on this server in Virginia. When I say Virginia, it's probably Amazon's servers there that Twitter is hosted on. The bytes on that server, those little bytes that record what somebody was saying, that's where the fight is. Whether this person can or cannot tweet is literally a matter of like billions of people around the world wanted to know whether

Starting point is 01:52:23 that bit would flip this way or that way. That's insane from the perspective of 2010, even knowing that Twitter and Facebook had done the Arab Spring, that they've caused social revolutions abroad, that they had connected hundreds of millions of people. If you had written that, the entire politics of the world would depend on whether the United States president could tweet, it would be an extrapolation. But that's what I'm trying to tell you is I do think that if in the 2010s, social media became what all politics is about, by the end of the 2020s, cryptocurrency becomes what all politics is about. You will not be able to fund your government without it. All right, let me hop in here. So there are three things that I'd really love to cover, and we'll see if we can

Starting point is 01:53:06 do it. So the first, just because I don't want to let this go too quickly, because I know it's a question that is on a lot of people's minds. So you're painting a picture for Bitcoin, appreciating in value based on the difficulty in seizing Bitcoin by a central actor like a government. Many people, right, not your keys, not your crypto, will have their crypto in trusted third parties and will not have cold storage and be going through all the Jason Bourne steps necessary to sort of implement all of that well.

Starting point is 01:53:42 Or they'll do it in a B-min- fashion and it'll all be trackable anyway. So if they throw you in a jail cell, you're going to give up your keys, probably. But my questions are, so I do want to make sure we hone in on, all right, if you had to bet on what the first- Extremely important question. Yeah, let me just lay out my kind of menu,

Starting point is 01:54:00 my wishlist here. So, and we might tackle it in reverse order, but the first successful network state, what does it look like? That I would love to hear your answer to. Then you have Bitcoin maximalism is the most important ideology no one has heard of. I want to double click on that and understand why that's the case. And then coming back to the most recent conversation we've been having, what would need to change for Bitcoin to actually behave from a pricing perspective as an inflation hedge? Because it has seemed to be, up to this point, a risk-on asset with instant liquidity in a market that never closes.

Starting point is 01:54:40 And when shit goes sideways or people get afraid, there's a sell-off. So it doesn't seem to mirror the behavior of, say, gold in the perhaps traditional way that some investors view it as an inflation hedge or hedge of other types. A lot of people who participate in crypto are not going to have cold wallets and therefore not a critical mass, perhaps enough of a critical mass to move the market. And again, there are a lot of assumptions baked into this question, but what would need to change for Bitcoin to suddenly behave in the way that you are describing? Is it the international devaluing. When I say devalue, I mean more perceptually of non-US governments and central banks and so on with respect to the US dollar. Even if that happens, I kind of fail to see how that makes the hop. So could you just paint a picture of what needs to happen for Bitcoin to behave in the way that Bitcoin holders would like it to behave?

Starting point is 01:55:52 The reason I'm not a maximalist is many reasons. But one of them is I don't think everything can be reduced to money. I actually think maximalists often, in some ways, sort of how wokes are like the opposite of Nazis. They're both racially obsessed, but white people are the best, white people are the worst. But you get a lot of the same things like separate graduations and all this stuff. Maximalists are like the opposite of communists in the sense that they're both economically obsessed and the communist thinks everything should be within the state and it's the fault of business. And the maximalist is actually often the opposite. And the issue is, why am I not a maximalist? Well, for example, there's many things you can't just buy. If you're in Syria and you have 100 BTC, what do you actually want to buy? You want to buy peace. You want to buy a walk down the street in a high-trust neighborhood where there aren't bombs flying around.

Starting point is 01:56:35 Balji, just for people who don't have the definition, could you define what is a Bitcoin maximalist? What is that ideology or that belief system? There's different definitions, but I would define it as somebody who thinks that any digital asset other than Bitcoin is a sin. And it is. And people have made the comparison of wokeness to a religion. In my book, I actually talk about it as a doctrine, which is related to a religion, but not exactly the same. More than a technicality, the Wokes, they actually don't worship God. They worship the state and or the network. That's to say they're not about thoughts and prayers. They're about pass a law. And they're not all employed by the state. They're outside of it, and they act through it on a network. Maximalists are similar in that

Starting point is 01:57:20 they've got the zeal of a monotheist or of a monostatist like a communist, but they're a mononymist for a coin. And one of the things that's interesting is, you know, like a communist would be pathologizing profit, and a Christian fundamentalist or religious fundamentalist would pathologize interest. And a maximalist pathologizes digital issuance. So just to kind of click on that, right? Like a communist, they think of all profit as exploitative. That boss is obviously screwing somebody because, you know, he did a markup, didn't he? Why couldn't he give it away for free to the community? He's stealing some for himself. There's 50 arguments you can make against this, but the problem is that it's intuitively appealing to people that profit is sort of getting a, you know, is getting one over on somebody, right?

Starting point is 01:58:09 It feels like a scam, right? And communists were able to get hundreds of millions of people to buy into this notion. And it was something where rather than say, look, there's good profit and bad profit and manage this, they just pathologize the whole thing. Interest is similar. Christian fundamentalists, other religious fundamentalists, there's things about usurious interest rates. Are you familiar with this concept, like usury? Yeah, usury. Yep, I am. Yeah. So what is the concept? It's basically like they take the good and true thing that debt is bad. And I would actually also agree that most Americans are in way more debt than they're supposed to be or should be. And it's like a power tool. They take the valid concept that interest can be abused, is being abused, has

Starting point is 01:58:50 been abused, and they turn it into something which says interest cannot happen. Okay. But if interest cannot happen and interest is banned and because all interest is usury, you break the economy. Yeah. And let me just hop in for a second. So usury, I'm just going to give a definition here. The illegal action or practice of lending money at unreasonably high rates of interest. Yeah. And everything is in unreasonably. Yeah. Yeah. Everything is unreasonably right. So if, anyway, we get into what that means, but yes. Yeah, exactly. Because any rate of interest is unreasonable in some, under some religions, like Islamic finance, for example, or very religious Christian groups were against interest of any kind at all.

Starting point is 01:59:34 Then what happens is every single financial model breaks. You cannot figure out, okay, should I allocate money into this building project or this tech? Basically, the power user tool goes away. You might say, and I might agree with you, that the average Joe should not be buying all this stuff on credit and debt, and they're getting screwed by it. And I might agree with you on that, but I don't think you can take away the power tool because it just breaks the economy. And then we go to issuance, right? If the communist pathologizes profit and the fundamentalist pathologizes interest, the maximalist pathologizes to issuance, right? If the communist pathologizes profit and the fundamentalist pathologizes interest, the maximalist pathologizes digital issuance.

Starting point is 02:00:08 They're okay with the issuance of equity, paper equity. That's to say, you know, you can go and incorporate a company and pre-mine the shares of the company for the founders. That's like an accepted thing to do. Every single company is like that. You know, you're pre-mining the shares. Oh my God. And the thing is that you

Starting point is 02:00:26 get people to buy into it or not. And it's your own efforts. Why do you issue that new currency? Why do you have that stock? Why doesn't everybody just get paid dollars in your company? Why is it not all dollars? Why, why equity equity is a scam, right? Like, you know, that's what, you know, lots of folks on hacker news will say, They'll say all startup equity market is zero. It doesn't, it's not worth it. Well, the reason is that if, again, going back to first principles, the value of an equity or stock is the net present value of, you know, the future dividends that would go to that share.

Starting point is 02:00:59 And so, you know, basically you buy a stock and then you assume that in 10 years or 15 years, Facebook goes public and it pays out dividends and you pay $10 down, you get, you buy a stock, and then you assume that in 10 years or 15 years, Facebook goes public, and it pays out dividends. And you pay $10 down, you get $50 in dividends in 15 years. And that's actually a win, right? Now, of course, in practice, for tax reasons, other reasons, companies will do buybacks. And there's lots of ways where that econ 101 or microecon 101 concept of the dividend has been abused, granting all that. But fundamentally, there is an income stream there. And the reason that you don't just have

Starting point is 02:01:29 somebody just give dollars to everybody at a company is that through their efforts, they can go and close sales, they can close deals, you can go close the sale for $10 million. That brings in revenue into the company. In theory, that could be dividended out to the shareholders. And therefore, your individual efforts can boost the value of that equity in a way that you cannot really boost the value of the dollar. Your elasticity, the dollar economy is so massive that your individual efforts will be a drop in the bucket relative to a million other people who are doing things, right? So your effort results in results. Effort and results, that's capitalism.

Starting point is 02:02:07 That's the thing that Deng Xiaoping's key insight, the reason that China boomed, is he allowed the farmers to keep some of their grain that their effort led to results. So effort leads to results. That's what equity is. It gives you a shot. I know I'm explaining like super basic things,

Starting point is 02:02:19 but honestly, this community has gotten its head into this sort of religious fundamentalist mode. This community meaning BTC maximalism. Maximalist, yeah. Because they've gone their head into a religious fundamentalist mode where, and by the way, some of the fault here lies with the SEC as well. Fundamentally, we have not been able to make the analogy between digital equity and paper equity. Why? Because the SEC has tried to say,

Starting point is 02:02:48 oh, they're all unregistered securities, and so we're going to throw everybody in jail, and so on and so forth. So what does that mean? That means that, look, do I think that a digital asset is the same as an equity? No. I think it's like a horseless carriage versus a horse-drawn carriage. At first, you make the analogy, but it's also got fundamental differences. With a digital asset, you can issue it to all of your users. They can use it in programs. It's on-chain. It does all its slices and dices.

Starting point is 02:03:18 It does tons of things a paper equity does not. But it is similar in one sense, which is that a paper equity is something that incentivizes people to build out a company, and a digital asset incentivizes people to build out a network. Now, the problem is that the SEC, you've got a pincer attack of the journalists and the maximalists, basically, okay, the bureaucrats and the maximalists. Because on the one side, you have these guys who are stuck in the past with Orange Groves and Howie, the SEC guys who are trying to pathologize the issuance of digital assets and saying ah we're going to go after that that's like unregulated you know issuance of of assets and the crucial thing by the way is they're not like going after the bad actors in the space

Starting point is 02:03:55 they're going after for example they went after kick you know which is uh like a fairly reputable you know company they just randomly targeted them for enforcement they're just going after not the bad actors the actors they can get the maximum headlines on. What that does is it forces Web3 people to not make the analogy to equity. When they can't make the analogy to equity, and they have to shy away from it with all kinds of stupid word games and so on and so forth, people do get the sense, oh, there's something up here. They're not being totally straightforward with me. Then that pushes it. It's like this trampolining. And then the maximalists attack

Starting point is 02:04:28 it as, ha ha, it's actually equity in disguise. It's like an illegal crowdfunding or whatever. And the thing is, that same maximalist is typically anti-Fed, yet pro-SEC. They're like the most selective crypto-anarchist ever, where you're

Starting point is 02:04:44 against the Federal Reserve. You know what I'm saying? For the discerning crypto-anarchist ever where you're against the Federal Reserve. You know what I'm saying? For the discerning crypto-anarchist. I don't often engage in crypto-anarchy, but when I do, yeah. Yes. And the thing is, it is fundamentally, in a sense, unprincipled, right? It is basically something where it's like, there is a rationale for it, which is number-go-up technology. Anything that seems to make the price of Bitcoin goes up is good. And if that means banning every other coin, so the only coin people can buy is Bitcoin, well, that's good. Again, though, this is like the communist zero-sum mentality, because if the Web3 crypto economy didn't exist, I don't believe that Bitcoin would be where it is. You need all of this infrastructure around it to build a thing up.

Starting point is 02:05:24 I think that's super obvious. You need more cultural awareness. You need the zeitgeist to shift. All of these things, or a lot of them, contribute to the rise of Bitcoin, also indirectly. To me, that's insanely obvious. But the thing is that the 21 million, again, there's an aspect of it that's zero-sum, like the communists, which is one person's gains, another person's loss. If you're getting Bitcoin, I must be losing Bitcoin. One of the ways you see this is in the Bitcoin community, you don't see that many crowdfunders. You see actually fairly large crowdfunders in Ethereum and so on, right? Now, what does the maximalist community have?

Starting point is 02:05:56 I've criticized it, but let me actually say certain things that it's very complicated because maximalism has many of the things that they say are things where I agree with some or all of it. But it reminds me of, it's like somebody who's a progressive and they would agree with many statements about how you need to have equity and not discriminate against people and so on. But then they see people saying those things going and burning down Black businesses. And that's completely the opposite of what you actually seem to want ideologically. This is harming these people that you're claiming to help. So the words don't match the actions necessarily. If the words are, in this case, for greater freedom and so on, why are you arguing for governments to crack down? Why are you arguing for willing buyer, willing seller to stop? Why are you trying to pathologize capitalism? That doesn't seem to make any sense. And that's because I think it's gotten sort of maximalism

Starting point is 02:07:03 got twisted in this ideological knot, which unfortunately is going to be very helpful. That's the paradox. You're like, what? That's an unusual. Here's the thing. I know I'm digressing, but I'll bring it home. I'll bring it home. Okay.

Starting point is 02:07:15 And then I also want to hear what Bitcoin would need to do or what would need to happen or what will happen to make Bitcoin behave in the way that so many holders such as myself would like it to behave? Totally. So the answer is, one of the things I've learned over the last 10 years, 15 years, is the value of irrationality. All the other people in Web3 are in it for technology or finance or something like that. Maximalists are in it for fundamentally political, moral, social, ethical kind of things.

Starting point is 02:07:46 I think there's a continuum where, as I said, some of the words I agree with, but a lot of the actions and behavior I don't. Still, I recognize the zeal. And zeal really, really, really matters. Zeal matters because zeal is the difference between selling when it's low and zeal is the difference between selling never. Zeal is the difference between talking when it's low and zeal is the difference between selling never. Zeal is the difference between talking to everybody about it all the time and making it your life and just having it be one component of an otherwise healthy life. Zeal means putting it at the top of your identity stack, putting it in your profile, having it be part of your existence. Like, you know, the top of your identity stack, that's really precious space.

Starting point is 02:08:20 You know, what you identify yourself as, you might live in Missouri, but you might not identify yourself as a Missourian. You might identify yourself as a Bitcoiner or as a Christian or as a Republican or something. That top identity thing is really important. And that's something that Max must have. And so what I think is actually going to happen is the political spectrum will rotate. I think, imagine adding yellow, a splash of yellow, so that red-blue becomes orange versus green. And orange versus green rotates it. And so it's Bitcoin orange versus dollar green. And on the dollar green side are actually quite a few Republicans, a lot of the security state people, military people, neocons, folks who basically side with, at the end of the day,

Starting point is 02:09:04 they will choose the American flag and they'll choose the US government and so on. And the other side is Bitcoin Orange. And here, actually, lots of Democrats will actually choose this side. And for example, Jack Dorsey, Glenn Greenwald, a lot of the sub-stackers, like a lot of the tech founders. These are folks who would never fold into Trump, but they also are just fundamentally anti-establishment. They have that rebel DNA, that fundamental rebel DNA, just like a lot of those Republicans who will side with Dollar Green don't really like the current U.S. government, but fundamentally it's my country, right or wrong. So it's a rotation of the spectrum. You know, if the normal political spectrum is left versus right,

Starting point is 02:09:50 this is like top versus bottom. It's like the authoritarian is dollar green and the libertarian is Bitcoin orange. And that rotation is a pretty big shift. You know, I'm not sure what percentage of both parties shift. It might be that, you know, Orange is like 60% Republican and 40% Democrat or something. But one of the most underappreciated aspects is many, many non-white people will shift to Bitcoin Orange. And the reason is, is that inflation hits African Americans, Latinos, Asians, and whites all at the same, you know, and if you look, you know, the more equities and other assets you hold, in some ways, you're kind of more buffered from this, at least you can have some ups as well as some downs. But inflation is absolutely crushing people of color. And that is something I think, you know, for example, Jack Dorsey, who has Square Cash, that's actually very popular among the African AmericanAmerican community, among other communities. And it has a different user base than your typical tech app. And in fact,

Starting point is 02:10:52 he's gone and talked about that, given talks about that and tweets about that. And so he's probably seeing this in the numbers that inflation is hitting this group harder. So because of that, the moral legitimacy of the establishment is called into question because they define themselves. If you read again, like something like Barbara Walter's book or something, she imagines that this future civil war or conflict will be between a tolerant, diverse establishment and some like 4chan Nazis. But that's a wash. That's an easy win. That's a 90-10 win, right? That's 95-99-1 or whatever, right? When you rotate it and instead it is basically all pro-freedom people who are Bitcoin orange and against inflation and probably maybe more people of

Starting point is 02:11:42 color than not than on the other side. And then you have, well, it's still our flag. It's still our country. It's still our state. That's now set up for something that's much closer to a 50-50, right? That's actually something where a lot of people would be torn between those two groups. And when it's 50-50, unfortunately, that's when conflict is maximal. So that, unfortunately, is how I anticipate things to go. When do you think digital gold will behave like gold, if ever?

Starting point is 02:12:12 All right, so now let's talk about that. So now the practicalities. These practicalities really matter. Why do they matter? Well, the question of whether Twitter could censor somebody's account and so on was an abstraction because people just assumed that they wouldn't hit it. You should assume every single thing gets weaponized in crazy ways.

Starting point is 02:12:30 We have not yet had total cyber war. We're going to see some crazy things as a function of that. And that's going to push people to truly not your keys, not your coins type stuff. Problem is right now, yes, a lot of coins are on exchanges. What I think we're going to see is every possible edge case and failure mode will happen, but maximalism is not freeze and seizure orders given to centralized exchanges. They may have, however, the moral support from their community to not comply. They may be located in red states where the governor says this is a sanctuary state for crypto.

Starting point is 02:13:20 Because if you think about the concept of sanctuary state for immigration or for abortion or for gun laws, all of that groundwork has already been laid. One of the things I predict in the book I talk about is I think that maximalists will introduce a constitutional amendment for no seizures of Bitcoin, just like free speech or right to bear arms can't seize Bitcoin. Fundamental right. And I actually think you'll probably be able to get that through in a fair number of US states, maybe not the full constitutional amendment ratification process. Like you may not get like the quorum that's necessary, but I think you'll get that ratified

Starting point is 02:13:53 in some states. And then those states that are ratified, it can point to that and say, we ratified it. Therefore, it's a law of our state. Therefore, we're not seizing the Bitcoin and companies could put their servers there. I mean, this is the level that I think things are going to get to. They're going to get really intense or they keep them in El Salvador or they keep them, you know, somewhere else. Right. And then the question is, you know, like the Andrew Jackson thing, the court has made its judgment, let them enforce it. So in 2010, would it have seemed insane to say that billions of people would care about the position of some bites on a server in Virginia

Starting point is 02:14:25 where Trump has access to tweet or not, you know, like that would be insane. I'm telling you, people are going to really care where that money is in five or 10 years. They're really going to care, you know, if they can freeze it or not. A few other things that can hit. Quantum computing could hit. It is possible that the Chinese who are working heavily on this. This is the thing about the book. I talk about there's so many different billiard balls in this theater. It's like a world war, you know, in the sense of there's all these different theaters happening and you could just be absorbed with the American theater, but there's like the Asian theater and there's this theater and there's that theater, you know, the Chinese are working

Starting point is 02:15:00 very aggressively on quantum. And there's a scenario, I'm not an expert in quantum computing, I know enough to be dangerous, but there's a scenario where quantum decryption advances fast enough and quantum encryption isn't there or it's expensive and you can do decryption

Starting point is 02:15:15 with these high qubit systems that are in one location, but encryption you can't do outside or something like that. Quantum safe algorithms just don't get distributed in time. I've seen people argue about this. I'm not saying I'm strongly on one side or the other, but that's like a wild card that could come through that breaks some of the assumptions

Starting point is 02:15:31 on the cryptography. There's other attacks that could happen, firewall attacks, where you try to block the packets that are going through and then the people pipe them over Starlink or they try to do port randomization or they try to encry encrypt the traffic so it looks like you're sending an email when you're sending a Bitcoin transaction. There's so many things people try. One of the issues is the Bitcoin network itself is not extremely high capacity for on-chain transactions, so it's hard for everybody to use it on-chain all the time. But people can go and hold large amounts of money with one transaction. I am seeing stats which show coins coming off exchanges since I think early 2020 or

Starting point is 02:16:11 thereabouts. I am seeing those numbers. I think Glassnode has some of those numbers. So you can see, I think, a decline in this. Why? Because actually, you know, one of the funnier things, it's hilarious, it's actually pulling money off of exchanges. You know what it is? DeFi. DeFi, because you can only engage with it through a decentralized wallet for the most part. I mean, there are centralized exchanges that let you do it, but regulations make it hard. Because of that, people have moved funds more and more funds locally. There's been a financial incentive to pull funds locally. And that, I mean, incentives ultimately work. So it's a funny thing where DeFi may actually, the thing that lots of maximalists hate

Starting point is 02:16:51 may actually have pulled more funds. Okay, that's a hypothesis. It'll be the avenging, the unknowing avenging angel for the entire sector is this demonized, decentralized DeFi. Yeah, yeah, yeah, exactly. Like, exactly.

Starting point is 02:17:06 And sometimes things are like that, you know? I can't prove it, but my strong hunch is people will bring the BTC locally. They will transform it into something like WBTC or RENBTC or something like that in a DeFi thing and then do something with it, right? There's several different operations that are like that. I don't have, probably somebody like Dune or Nansen or something could support my hypothesis, shoot me down or confirm it.

Starting point is 02:17:31 Anyway, coming back up. So the thing is, the Bitcoin seizure resistance point, there's many holes in the story in the sense that there's many things that people can and will press on from central exchange seizures to lower capacity on the chain and whatnot. But the pushback to that, and this is kind of an important and subtle thing, I'll try to articulate it. When you have the state coming after you, you can double down on the network, meaning internet-type technologies, but also peer-to-peer network of people and so on.

Starting point is 02:18:01 And you can do things like Zcash, which encrypts all transactions. You can do digital nomadism. You can move overseas. You can do all these run and escape and exit things. And those can be good, but it's a tactic. And ultimately, you can't just only exit. Sometimes what you're doing is you're exiting with a tactical retreat, and you then get to higher ground. You get to a more secure position, and then you can push forward. The Puritans made it all the way to the US and escaped persecution. And then 170 years later, the power they had built up, they were able to invade Europe. Or Google, they escaped this corner, which is search, and they built up their resources there. And then they had billions of dollars, they could invade Microsoft's territory with Google Docs. Sometimes you retreat to a corner, you fight hard enough so that you're not being invaded yourself. You build a power there, and then you can come back. That's kind of what the maximalists have done, though not super conscious necessarily. Maybe some of them are conscious. Fundamentally, their innovation, everybody else is thinking zero knowledge and all this stuff, and I think that's good. That's the network innovation. The maximalists are actually taking some of the state's playbook and using it.

Starting point is 02:19:07 So the El Salvador thing, various Bitcoin bills, their innovation is actually on the political level, not technological. They're basically like a, quote, political party, but really a political network. In this sense, they're like the wokes. The wokes exist really as a network thing. They exist in academia and so on. They're like a ghost that can animate a Democrat sometimes and make them do something. Sorry, that's good. Yeah, I like the image.

Starting point is 02:19:35 Like the image, right? And here's why I say that. If you look at Hillary Clinton or Joe Biden, and you look at what they were saying in the 90s or 70s or something, they're saying completely different things. These are, in a sense, a politician is inhabited by a ghost that speaks through them. In fact, a lot of things, this is actually a very powerful model for thinking about a lot of things. When you think about ideologies are like ghosts that occupy a huge number of hosts and then they animate them and their eyes glow a certain color to fight each other. And often, you know, for example, like Russia versus Germany in, you know, the 1940s, we think of that as communism versus Nazism, but now it's like flipped and the Germans are liberals and the Russians are nationalists, but they're still fighting. So the ideology is flipped, but the

Starting point is 02:20:22 tribes are like still fighting. And sometimes one tribe picks left tactics, another tribe picks right tactics, and then it flips. And one tribe's picking right tactics, another tribe's picking left tactics. The point is, this concept of a ghost that's inhabiting a politician is also happening with maximalism. For example, the guy who's running against J.D. Vance in Ohio, Josh Mandel. Did you see his tweets on Bitcoin? I assure you I have not. See, the thing is, this is the kind of stuff I track. And the reason I track it is because it's like- That's why we're friends. I'm just kidding. That's why I can have you on the podcast and then I can ask you. Yeah, so he sort of casually tweeted something,

Starting point is 02:21:02 which was like, Mandel was like, Ohio must be pro-God, pro-family and pro-Bitcoin. And the thing is that, look, as I said, I think, how good their propaganda is when you're seeing your money crumble underneath. In fact, the more they say it's transitory, the more they say things like, you know, one of the things that's going to be a big message, unfortunately, censorship is going to increase dramatically if inflation happens. Do you know why? Because in Argentina, in other countries where inflation has happened, the government argues that talking about inflation causes it because you're causing people's price expectations

Starting point is 02:21:52 to rise. Therefore, you're disloyal if you talk about inflation and you're undercutting the stability of our society. And so therefore, they publish public inflation stats that are fake. And then you have to actually have stats outside of Argentina that are real. And so now we are faced with the issue of that's something which the 2000s or whatever, you could tut tut sit outside, not Argentina, but outside America, shadow stats on inflation that are powerful enough to resist attempted censorship by the U.S. government. I actually wrote this post last year with the spec on this at 1729.com for inflation that actually goes through the whole problem, which is actually quite a non-trivial problem because you need censorship resistant hosting. You need to scrape lots of prices, you need to have maybe some instrument that is like an actual, not a stable coin, but a flat coin. You're tracking oranges, you're tracking bread, you're tracking milk, and you've got a coin that remains flat against those things. That's what

Starting point is 02:22:58 actually people care about, maintaining their purchasing power, not so much whether it's flat versus a dollar that's inflating away. And that post actually, it integrates, it takes everything that we've been doing in crypto and puts into one thing. It's the price signals, like all the price feeds. It is the decentralized hosting because states will try to take it down. It is obviously Bitcoin, but it's also Ethereum with the dApps, blah, blah, blah. It's crypto oracles. It's everything into one app, which is the inflation app that I think becomes like the new coin market cap. It's like the thing people refresh every single day that mainstreams kind of Web3 and BTC. I know that sounds like, oh my God, that's terrible, right? And there are bad aspects to it. There's no question about it. One of the things that I'm

Starting point is 02:23:41 talking about with this book is anticipating that level of instability. What do we build on the other side? Can we actually pause for one second? Just I'm going to share, you've been sharing while we're talking, we've been sharing things in the chat. I'll share one that you might enjoy. And we don't need to spend a lot of time on this, but you'll probably enjoy it. This is a post I put up in January 2021, and it's a picture of the Reserve Bank of Zimbabwe with a $100 trillion note. And in the description, I just say, I had it framed years ago to remind me of how quickly, quote unquote, money can change in value. And then went into a discussion of ultrainflation and the belief that some people have of that can't happen to reserve currency and on and on and on. So I'll include that in the show notes. What do you think one of the first successful attempts at a network state will look like?

Starting point is 02:24:35 And related to that, because you mentioned the carbs good, carbs bad as one possible decision to be made that is woven into the fabric of a network state, just as an example. And I'm wondering how you preserve, if this is important, sort of rational adaptability in the face of new evidence, right? Because evidence could come out, turns out carbs are good, right? Or whatever it might be. Insanely important. And so how do you prevent wild, wild country and some disintegration into, not disintegration, but the formation of a calcified religious state when setting the parameters for a network state?

Starting point is 02:25:15 So what might a successful network state look like? What would you wager? And how do you prevent the calcification that I mentioned? But you were going to say something else with respect to the Zimbabwean $100 trillion note. There's people who say, oh, the reserve currency can't fail and so on and so forth. They're actually like the inverse of the maximalists.

Starting point is 02:25:36 You're not having a rational argument with them. You're having an argument about faith. And the reason is one of the chapters or subsections in the book is, I call it God-State Network. The question is, what is the most powerful force in the world? Is it an almighty God? Is it the US military? Is it the government? Or is it encryption? Or in the past, you might have said capitalism, peer-to-peer networks, and so on. God-state network, the thing is, it's a generalization of religion. Religions worship a god, but a doctrine, if you look at that in the dictionary,

Starting point is 02:26:12 it could be a political or religious or other movement. A doctrine, you have as your Leviathan, it could be a god, it could be the state, or it could be a network. So communism is not a religion, but it's a doctrine because they worship a state. Maximo is not a religion, but it's a doctrine because they worship a network. Wokeness is sort of like partially state, partially network, where they live on the network, but they animate the state. Communism is actually also partially state, partially network because they had this international network of communists, but they were primarily state. The mid-century US, for example, was like half God, half state because it was like for God and country, we'll fight the godless communists. But it was mostly state, but with a God dosing.

Starting point is 02:26:50 So you can make hybrids, not just pure forms. But God-state network is actually a really useful lens to start looking at movements. Because the reason that guy is saying to you that the reserve currency can never go away is he worships the US government in a sense. Even if he doesn't understand it, he really thinks currency can never go away is he worships the U.S. government in a sense, even if he doesn't understand it, he really thinks it can never go away. You know, there's a series of books or a series of essays when communism didn't work out, and it was called The God That Failed. People put religious-level faith into that. You know, people, you've probably heard the term America's civic religion, you know, the constitution as similar to the Bible.

Starting point is 02:27:31 And so one of the issues is that those people who are really asserting that the reserve currency won't fail are often the ones who kind of suspect on some level that maybe it could, and they just can't imagine a world without that. And they don't want you to undermine their God. And you're kind of a traitor or you're like unpatriotic and so on and so forth. And sometimes if you talk to somebody who's very religious, they'll say, well, if you didn't believe in God, people would just commit all kinds of crimes and so on, right? There's actually, by the way, there's more argument for that than you might think because if you actually believe in hellfire, then it's like decentralized law enforcement. You know, the law might only catch you at some probability, but if you actually believe in hell, then doing this little crime, even if the law doesn't see you, well, you're

Starting point is 02:28:08 going to hell and that's more of a penalty than the, it's like scalable law enforcement. If you can get people to really believe in it, it's actually like a meta logic to it, but okay. People who don't believe in God, where they believe in, they believe in the boys in blue, they believe in the state. Okay. What if you don't believe in either? You're not just an atheist, but you're an atheist. Then you believe in the network, then you end up in something like maximalism or crypto tribalism. So the thing is that that dispute, you know, Carl Schmitt wrote this book called political theology. And he's like, all these religions, I mean, he himself, you know, was like a Nazi jurist or whatever, right? So, but basically, Nazism, communism, etc. These are all, you know, many people have observed,

Starting point is 02:28:43 these are all effectively like religions. They're either religions themselves or they're God replacements. And they animate huge numbers of people to fight as if a religious kind of thing. So therefore, we're not just having like a scientific discussion. It's like a fundamentally like religious discussion. So just something that one should think about when you're talking about this kind of thing. There's some folks who look at it dispassionately. And why would you be able to look at it dispassionately? It's because you may not realize this, you have some island of stability on your own. You're either, you had this great phrase before, you're like a tech-enabled Jason Bourne. And actually I thought about it after, I'm like, that's much more you than me. I'm not

Starting point is 02:29:19 going to be doing all the stunts in the movies in the same way that Tim Ferriss is, right? But the thing is, if you have very high sense of agency, if you're like a CEO or you're a founder or you're president or you're very driven and so on, then you can kind of find your footing on something. You're not a joiner of a movement. But if you need to have, if you don't feel like that, and most people don't for lots of good reason, you need to have a movement that kind of supports you in some way where, you know, you can't just create one from scratch. That's actually one of the things I want to help build. So that brings me to your next question. Basically, if it's not these ideologies of conflict, because in an era where everything is cracking people like these ideologies, these ghosts are

Starting point is 02:30:03 set up to recruit, they're set up to pull you in and you're like you know for example if you were if you were unfortunate enough to be in eastern europe between 1939 to 1945 all these guys had to choose between like the nazis and the communists that is an absolutely horrible you know the answer is neither like the answer is gtfo good both those are dead ideologies you know on the ashy what are you gonna say no just for people get the fuck out is what that stands for yeah exactly it's true like those people who were caught in between that vice nobody ended up well off right and and so there's this false it's like the iran-iraq war you know

Starting point is 02:30:43 who wants to be in the middle of that that's like like Shiite versus Sunni. My answer is neither. I do not want to be involved in this, this false dich, sorry, five years ago. He was like, people have a fantasy of how political violence works. You smite your enemies in a grand and glorious cleansing because of course you're better. But grand and glorious smiting isn't actually how violence works. I'm not sure how to really describe it so people get it, but this is a stupid comparison. But here, imagine that one day Godzilla walks through your town. The next day he does it again and he keeps doing it. Some days he steps on more people than others. That's it. That's all he does. Trudging through your town back and forth. Your town's not your town now. It's a Godzilla trudging zone. That's kind of what it's like. And that is, I mean, if you think about BLM or a giant riot, it's not like some surgical, you know,

Starting point is 02:31:47 kind of thing. It's just like burning things down, blowing things up. It's in the name of some higher cause. That's why people do it, but it's extremely non-targeted. It is simply, you know, that's why friendly fire happens worse. Like people get blown up, people get blown, immense damage and destruction on both sides. War really, really sucks. And I know that's super obvious to say, but all the wars that, you know, with the exception of the military class that's actually gone overseas and fought, the U.S. like hasn't actually had experience with that in living memory. It's got all these violent video games. You know, I like some of these games and so on, but it's all fantasy-type stuff, and it's not a reality. Once you actually live through that in World War II or the Korean War or something, you don't want any more of it, and you go back to a peace mode.

Starting point is 02:32:34 You understand that things can spiral in a bad way. But having had that go for 70 years, people are now being drawn to these ideologies of conflict. And what is the alternative, right? So the thing is, and this is, I think, one of the more important concepts in the book, these abstractions I pulled out. One of the concepts I have there is the one commandment. Okay. So I mentioned God's state and network and how you can make hybrids of them. So the network state actually requires a one commandment.

Starting point is 02:33:02 So you actually have something that's like, it's not just technology and politics, but something that's similar to faith. Okay. So what do I mean by a one commandment. So you actually have something that's like, it's not just technology and politics, but something that's similar to faith. Okay. So what do I mean by a one commandment? I mean, you take society at large and you have one focused moral innovation relative to society at large, and then you have an opt-in startup society. It could literally be you buy some land in rural Pennsylvania or Minnesota. It could start as a digital community that crowdfunds land around the world.

Starting point is 02:33:32 Okay, so it could start digitally. It could start physically. I recommend starting digitally for a variety of reasons. But you have this community where you have a moral premise. Let's say I give several examples, but there's different tiers of how aggressive that moral premise can be. It could be something like cancellation is bad. You know, cancel culture is bad. It could be.

Starting point is 02:33:51 So that's something that you could do purely online. How do you do it purely online? You form a guild where people are there and they're helping each other out in just some general work matters. But if one of them is canceled at one point, which is a rare event, that group all defends them as one. So that's something where there's a moral innovation relative to society at large, where society at large is sort of neutral to negative on cancellation, but isn't actually able to stop it. This group actually says that is a danger to our life. It's a big enough deal that I'm going to join a society that's like an anti-cancellation

Starting point is 02:34:24 society. I'm going to pay some percentage of my income effectively in cancellation insurance by being part of this society. And I have a thousand people and I will work with them on just normal, fun stuff. 99% of the time, we'll just share each other's content, launch each other's products, advise each other. 1% of the time, we'll have to defend each other online. And it's like a guilt. So that moral innovation, crucially, that group is not saying change the traffic laws. They're not saying change everything else. They're just innovating on one focus dimension. It's very similar to a startup, right? A startup is all about focus. One thing you're changing. Let me give a second example of the one commandment. Carb is bad. So this is something, if the first, you would need what I call a network union, like a digital-only thing. Carb is bad. You need actually some physical

Starting point is 02:35:09 component. You need what I call a network archipelago. So you've got like a physical network of spaces. It could be small cul-de-sacs or gyms, things that your community has crowdfunded around the world. And what do you do with the moral premise, carbs bad, that moral innovation? Well, you basically implement keto kosher at the border. You have, you intradite it, you take it seriously. And if you really seriously take sugar and carbs bad, and you take that to the nth power, and you have a small town that really thinks sugar is bad, what happens? Well, first of all, it changes everything on the store shelves. Every single grocery store, there's no cookies. There's no candies. There's also no high fructose corn syrup stuff. A lot of the prepared stuff, a lot of that stuff goes away. It changes every restaurant. They can no longer add syrups and things to their food to make it tastier. It

Starting point is 02:36:02 changes every meal. So first of all, that alone is a lot. Changing every single meal and every single grocery store and every restaurant within these borders is a pretty big deal. As I said, keto kosher, there's a precedent for it, which is kosher and changing food, but that's pretty big. You go further. Once you've got this done, probably people lose like 30 pounds coming to the community. So you have photos that showed before and after that your moral innovation led to a technological innovation. Progress used to be thought of as moral and technological progress together. For example, the public health innovators in the early 1900s, public sanitation like sewers, that was both, you know, cleanliness is next to

Starting point is 02:36:42 godliness. And it was obviously a technological innovation for all the pipes and stuff. But the will came first, and then the way. Those things were actually highly related. Then what happened is those split over the course of the 20th century. And so now you have the tech innovators over here who do startups and stuff. Then you have the moral innovators who are political activists, social entrepreneurs, and so on and so forth.

Starting point is 02:37:04 We don't usually think of those as the same kind of thing, but actually there's a market for revolutionaries. So on the tech side, it's obvious you have venture capitalists and you have founders. Do you know what it looks like on the political side? Tell me. Do not. It looks like activists and philanthropists. So you have activists on right and left, and you have

Starting point is 02:37:25 philanthropists on right and left, who are backing these activists. And those activists can be activists, activists, they could be, you know, aspiring young politicians, they could be NGOs, they could be like, you know, various kinds of things, folks who want to foment social change of some kind, like a technological innovator who sees a problem in the market and wants to build a change here, these people see a problem in the law or in society, and they want to take something that was a one and turn it to a zero, something that was bad and turn it good or vice versa. And they get funding from a philanthropist, or they do it themselves, and it's like bootstrapping, and they try to drive change in society. And when you start thinking of them as like a moral innovator, just like a tech innovator,

Starting point is 02:38:04 so what is the ultimate win of a moral innovator? It's like Obama is a community organizer and then he becomes president. That's like a guy starting a company in their dorm room and becoming Zuckerberg. And when you see this, you're like, okay, there's actually a term that we use both in the corporate world and in the political world. You know what that term is? It's president. You know, like the president and CEO of a company and the president of a society. So the president of a startup society has aspects that are similar to the technological innovator, but they also have aspects that are similar to the moral innovator. And they started that moral innovation. So I've mentioned two so far, like the cancellation proof culture or the carb-free zone. Now, you take the carb-free zone, you start iterating it. So first, does everybody drop 30 pounds? There's no sugar. You're buying more and more territory. People are like, whoa, this is amazing. And crucially, you have border control. You have an immigration and application process. People sometimes get mad about this. I'm like, look, if Harvard can do it,

Starting point is 02:39:06 if the New York Times can do it, if they can filter aggressively everybody who steps into Harvard Yard or into the New York Times company Slack, then you have license to do it. You have complete moral license to be as ruthlessly selective as they are. On the institutions they care about, they're highly, highly, highly, highly selective. So you have moral license to do that. So you have moral license to be selective. So you have moral license to be selective. Now, by the way, being selective on entrance is different than not letting people exit. It's like you don't let everybody into your house, but if they want to leave your house, of course you let them leave.

Starting point is 02:39:34 So they are different, entrance and exit. So you have selective migration in, and you're looking for people who have written about keto stuff. You mean physical migration or is this digital presence? Yeah, digital and physical. Basically, they don't just get an account. See, the difference is in the 2000s, people just wanted everybody to sign up online. Social networks were just about quantity, quantity, quantity, quantity. Just get everybody online. That was the right decision at that point. They were just meant to be super viral. The thing is, there's a network effect, but you know what we also have is we have a network defect. When you get to a certain scale of a network, everybody

Starting point is 02:40:08 starts fighting with each other because they weren't selected on the basis of aligned moral values. What happens is the network effect, normally the whole Metcalfe's law, N-square, the more people, the more interaction, assumes those interactions are a positive sum. But you have to very carefully engineer a network for that to be the case. Something like Twitter has a global leaderboard, which is inherently zero-sum. If you're rising the leaderboard, I'm falling or vice versa. So that results in coalitional zero-sum behavior, a group of people aligned with each other to get to the top of the leaderboard and knock others down. That means that you have a network defect because people polarize around certain moral beliefs, and the network actually starts becoming less valuable

Starting point is 02:40:44 as it increases in scale. Just like a company, hiring more people is not necessarily the optimum strategy. The network defect means that in this era, you don't just want to be super viral and grow to the moon. You want to grow to the limit of what makes sense for your community to work. That could be very different for different kinds of one commandments. I'll give several other examples. So the carb-free one, right? If you take that further, so first you've, I would say carb-free, obviously I should really mean sugar-free, low carbs. Actually, may I pause you for one second? Just to ask a logistics question. So on the physical migration piece, I'm wondering how that would need to be formatted so you wouldn't run afoul of state or federal-

Starting point is 02:41:27 Paris laws. Exactly, right, discrimination laws. And I would imagine, I mean, let's just say it's a small town. You mentioned archipelago, so there could be a distribution of islands that are very small, like private residences or gyms or whatever it might be. But if you want to make it a little larger, such that you could actually have a sizable community, it seems like it would have to be maybe privately owned, such that the town was actually considered a sole residence or something like that. That's right. So there's the entry U.S., outside U.S., and so on. So there's something called the bona fide private club exemption to those laws, which basically says, if you are a bona fide private club with dues paying members, then you can have restricted access to the facilities.

Starting point is 02:42:12 For example, 24 hour fitness basically has dues paying members and not right. Harvard is very selective about their admissions. New York times is selective about their admissions. So you, you have, you have a genuine community online that you start with, that you're selective on admissions, and then that community goes and buys land together. Now, might there be lawsuits and stuff like that? It's possible there's lawsuits, but this is a global thing. And just the concept of a selective online community, I mean, every Facebook group is selective. Every single Google Doc where you can add and remove permissions is selective. Every Twitter group DM is selective.

Starting point is 02:42:50 Like that's actually something which is so baked into the culture and society that we sort of take for granted that you have permission control over things. So I do believe that that is coming, that you're going to be able to take those opt-in networks that people can select into online and then materialize them in the physical world. Now, laws are going to be different all over the world and people will lose their minds in different ways and different aspects of this. Other things you can do, by the way, is you could, if you need to, just literally set quotas. And so you are hyper-selective, subject to having X percent of Y group and A percent

Starting point is 02:43:26 of Z group and so on and so forth. That's also potentially an approach. And different countries actually do things like that. They just literally set quotas. Schools do it too, even though they don't like to talk about it. Yeah, that's right. So quotas are actually not terribly bad necessarily, because at least it sets a numerical target. You have to hit that target, then subject to the target, then you're done.

Starting point is 02:43:43 And you've basically shown that you're fine. So point is, I do believe that if colleges and workplaces and private clubs and so on exist, if Facebook groups and Twitter groups and signal groups, if selective admission exists of any kind, which it does, then that group should be able to crowdfund territory. And if it can crowdfund territory, then it can erect a border around it. Now, crucially, this is not a typical corporation. It could be literally a co-op. There could be many structures. It could be all coin holders. So it has more legitimacy than just like a company doing it. So it's like a hybrid where it is really a group of people. It's hundreds or thousands or tens of thousands of very highly motivated zealots and activists who believe in this.

Starting point is 02:44:28 So it doesn't feel like, oh, it's just like some CEO or whatever doing it on their own. This is why I also wouldn't call myself a libertarian. You know, going back to that thing about, oh, just go and get some land. A lot of people will try and be like, oh, I'm going to be the prince of so-and-so

Starting point is 02:44:44 and I'm going to go and put a flag in some random unclaimed territory, like Sealand is like this, or there's a spot in Eastern Europe that's like this, or a spot in the Sahara Desert. I'm going to be the prince of this, right? And the fundamental thing that libertarians, they have half the picture, which is, yes, starting new countries is good, but they don't have the other half, which is the obvious thing, which is, okay, you and what army? Or more specifically, you and what nation? They don't have a nation.

Starting point is 02:45:10 They don't have a community. They don't have a people. And they start with these tangible things like land and laws that actually come last in the evolution. You know what it's like is people have lost such track of history. They don't understand the organic formation of communities, and they just skip to the laws and the explicit stuff as opposed to all the implicit agreement that precedes those laws, of which those laws are simply an encoding of those agreements and acculturations that happened over a long period of time. Right? Yeah, totally. With me so far,

Starting point is 02:45:40 right? Yeah, I am. I have another question in a few moments, so I might jump in and it's like, but please continue. Okay. So I've talked about a one commandment society, which was like the cancel proof one, just to extend the sugar-free one for a second, like keto kosher, sugar-free society. So step one is all meals change, all restaurants change, all grocery stores change. On the one hand, that's a big thing. On their hand, it's focused. You're not saying, again, you're not saying traffic lights change. You're not saying there's 50 other regulations, thousands of regulations that apply. You're not trying to change building codes. You're not trying to have self-driving cars. You're focused on

Starting point is 02:46:14 one thing in that community. Do one thing really well. That one thing of sugar-free, after people lose 30 pounds, then what happens? Maybe then everybody gets equipped with a CGM, continuous glucose monitor, right? Or you start rolling out other quantified self stuff to the community. That moral innovation unlocks another moral innovation and another, and you start going from one commandment to 1.5, and you start actually building it out. Now, to your point earlier about how do you know that this isn't like some kind of cult? How do you know that it doesn't go wrong? It's check by exit. Everybody can leave at any time. It's literally got to recruit subscribers.

Starting point is 02:46:51 And if you don't like it, you don't subscribe. And if you do like it, you keep your subscription. And if you liked it, but now don't like it, you cancel and you leave. It's society as a service, SaaS, the next SaaS, except, isn't that good? Yeah, that's good. Clever. And that is something where it also does something else, which is it's 100% democracy rather than 51% democracy. 51% democracy is what it sounds like. 51% democracy is 49% dictatorship. 49% of people did not vote for this guy at any time nowadays. And for the last 30 years or something like that, these elections have been very, very close. And they feel rightfully so that they did not get their guy in power and they do not feel

Starting point is 02:47:36 empowered. This is not just in the U S and lots of countries at any time on the order of 50% of the country feels the election, you know, they don't agree with the election, right? I'm not talking about any particular situation, simply the fact that you just keep getting 51%, 49%, 49%, 51%. The alternative to that, where it's like the Fosbury flop, if you talk about the Fosbury flop of democracy, is 100% democracy where every single person in this community has agreed to be there and can leave at any time. They have consented. And it's a consensual society. The consent of the governed is actually the upstream thing of which voting is only this very downstream thing.

Starting point is 02:48:12 And voting can be manipulated. Voting in the Soviet Union. You know how they voted in the Soviet Union? You went there and you had a ballot and it had nothing on it if you wanted to vote for the communist. And you could write the name on it if you wanted to vote for the communist and you could write the name on it if you wanted to vote for a non-communist and everybody would look at you and be like you really want to do that right the poke is in that quite a few counties in the u.s there's also

Starting point is 02:48:36 only one party on the ballot so it's actually not as dissimilar in the sense that the smoke-filled room of the primary is the actual election. And then the public just simply ratifies whoever's at the top of that party's selection process. So that's the poke, is that laughable communist process that we talked about is not that far away from a primary or a party selection process that's a real election and then people just pick their party candidate in the general okay go okay and go here all right i'm warmed up so i am just to be clear to everybody listening very deeply interested in this entire conceptualization of the network state which is why I'm asking all these clarifying questions. So you mentioned 100% democracy. People have to be recruited. If they don't want to be part of the community as a subscribing member, they can leave. Now, one could say,

Starting point is 02:49:38 well, even if we will look at the 49% ruled by dictator effect, if we want to call it that, in the United States, people could leave. They could leave. Now, taxation would follow them unless they renounce citizenship and so on and so forth, but they could physically leave. But a lot of those people either don't have the means or the will or fill in the blank to relocate. So I'm imagining you brought up El Salvador earlier.

Starting point is 02:50:05 It's like, all right, if someone burns their bridges socially and professionally, moves to El Salvador to be part of a crypto-centric community, and then they end up, I'm not saying this is the case, but they're like, oh shit, this is turning into the Mosquito Coast and animal farm all wrapped into one. This is a mess. They could, in theory, leave, but there may be any number of factors.

Starting point is 02:50:32 Maybe they married someone and had kids with someone who doesn't want to leave. There are all sorts of attenuating factors that could influence their ability to migrate. So my question following up on that is what are some of the most interesting attempts at anything related to network state that you could mention? And the reason I bring it up is, for a while I remember in Silicon Valley, there was a lot of talk of seasteading, seasteading, seasteading, seasteading. Sure, I talk about it a lot.

Starting point is 02:51:03 Yeah, right. seasteading, seasteading. And certainly there are experiments being run and have been run for a long time with intentional communities that have, on some level, let's just call them tenets of a doctrine or agreements or commandments. So where would you point? What are some interesting things that you're seeing that you think are worth mentioning? One important thing I just want to say is that in the book, I make a distinction. I talk about startup societies and network states. I define a network state as actually one that has diplomatic recognition from an existing sovereign, which is an unusual definition because you might say, wait a second, why do you care whether

Starting point is 02:51:45 Florida or Denmark or the United Nations recognizes you? Why should that matter? You should be able to just do it totally from scratch, right? And the reason that I have that, that's a very high bar for diplomatic recognition. The analogy would be Bitcoin starting as a pure internet phenomenon and then eventually getting listed on Bloomberg, and eventually, eventually becoming the sovereign currency of El Salvador. It attained diplomatic recognition, but it took like 10 years. The reason is that that, as I can get into diplomatic recognition is actually very important because it means the existing, it's almost like the crypto fiat exchange, you know, the exchange between crypto and fiat, the ability to be halfway dollars or

Starting point is 02:52:25 95% dollars and 5% crypto, that exchange turns out to be like a critical part of the entire transition to crypto. In the same way, the exchange or the interface between crypto countries and fiat countries is the diplomatic recognition of a network state. Okay, so that portability is one dimension of it. Another dimension is the one you're talking about, which is physical migration. And the thing is that there's several things I can say. So first is, if somebody plans poorly, you can't be their keeper. You can't necessarily look out for them on everything. What you can do is you can try to reduce the cost or the barriers

Starting point is 02:53:05 to exit. And one of the things I mentioned when I talked about earlier, I said American anarchy. On the other side of the world, what's burgeoning is the opposite of that, which I call Chinese control. And the scenario that I think might happen in China is there's this book by Roger Garside called China Coup. And various guys, George Soros has kind of hinted at this. There's this group, the Cywar group in the US that put out a video about a month ago that's talking about Cywar and has photos of China and how they're doing Cywar in China. Do you see this video, this ghost video? No, but I would love a link. We'll put it in the show notes as well. So short answer is, or short version is, I think it is possible, I can't say 100%,

Starting point is 02:53:48 but that some kind of China coup will be attempted against Xi Jinping or the Chinese Communist Party. So whether it's like actually US backed or not, I don't know. But for Garcet to put out a book like this, for Soros to make the comments he has, for this JSOC to put that video out there, for all the talk about, oh, they're not a democracy and so on, and a lot of the same energy versus Russia. I think it's quite possible that some kind of China coup will be attempted. I don't think it's going to succeed for a variety of reasons, but that's the thing that the Chinese system is armored against. And I think that the response to an attempt like that would be an AI eye, okay, the AI eye of the Chinese state ripping out any piece of civil society by the roots that possibly collaborated with that. The kinds of consequences of that, I couldn't imagine, but it'd be like that it could do cutoffs of physical goods as targeted reverse physical sanctions.

Starting point is 02:54:50 Okay, we'll sell you chairs, but not these key screws that you need for certain military things. It'd be viewed as this insanely hostile act. You might say, well, I mean, the U.S. government is smart enough that it won't try that. The U.S. establishment is smart enough that it won't try that. I'm like, have you noticed nuclear brinkmanship with Russia? Have we seen some of this stuff? Even if you agree, as I do, that the Ukrainians deserve freedom and so on, I don't think that some of the stuff where it's like being very casual about nuclear war is smart. And I also think that the fact that they're still poking on things like Taiwan and so on while they're in the middle of the Russo-Ukrainian war, you know, there's various statements

Starting point is 02:55:29 being put out on Taiwan. I think Biden put out some statement and pulled it back and put out some statement. This does not show a degree of caution on this topic. My point is, I think while American anarchy is happening or before it gets underway, Chinese control could follow a Chinese crackdown. And what does that happen? What does that mean? It means Chinese people can't leave the country. It's already happening where passport issuance is like down 95% over there. They're using the QR codes that they set up for the COVID stuff, for internal lockdowns. There's already the pre-existing hukou system of internal passports. They know that lots of Hong Kong people want to leave, but they don't want people to leave with

Starting point is 02:56:10 their money. And a lot of Chinese people now want to leave with their money. Okay. It's called runzu, R-U-N-X-U-E, or run philosophy. It's like, basically there's three responses, you know, for the upper middle class, middle class, you know, Chinese liberal, and those are rat race, lie flat, get out, or run zoo. So run zoo, the problem is there's reactivity on everything. And the more popular that becomes, the more it's going to be portrayed as some combination unpatriotic, some combination trying to take your money and leave after all China has done. So they're cutting off the exits in their own way, to your point. So Chinese control is on their side of the world. And you know what they're going to say is they're going to say, look, we just stopped this American-style anarchy.

Starting point is 02:56:53 And they're going to export that surveillance state to lots of countries. And they'll say, look, this is just total stability. And you will never have anarchy. And you will just be able to rule forever because our AI will pick up every possible form of organization against you, any possible form of dissent. That's just total order without any feedback signal whatsoever on power, whereas anarchy is the total opposite of that. You're going to get, I feel, this world that I'm seeing things tracking towards that, where you have just total disorder over here, which will be justified by saying it's not the Chinese all-seeing eye. And you'll have the Chinese all-seeing eye justified by the fact that it's not the total disorder here. And it's like the Nazism versus communism thing, except it

Starting point is 02:57:34 is total decentralization versus total centralization. And the alternative to that is many different examples of recentralization. What I mean by that is, you said, pick El Salvador, pick another country. The thing is that if you didn't like that is, you said, pick El Salvador, pick another country. The thing is that if you didn't like Jem, and you didn't like Ford, and you didn't like Chrysler, well, you could found Tesla. You could found something that actually, I mean, it's very hard. Elan's the first car that gets to be Elan, maybe, but it was possible to do so. And with software, if you don't like some software company, even like Google Docs, people could found Notion. Even a big company, you could tackle like this. So the thing is that that ability to start that startup society, even if it doesn't have the full diplomatic recognition of a network state, is how those options actually increase. Because you mentioned, oh, if you don't like the current options, go to El Salvador. But El Salvador is fine. I'm proud of it. No, I didn't say that. And I'm fine with El Salvador. I don't have personal issues with El Salvador. I'm just saying that most of the experiments we're talking about-

Starting point is 02:58:35 What I mean is of the menu. Yeah, the menu, it seems like the crypto tail is wagging the dog a bit in the same way that the tax tail wags the dog when people are like yeah it's great in this place and i'm looking at them in zoom and they're like tires on fire in the street behind them with razor wire around their compound and i'm just like what the fuck are you doing man like to save whatever you're saving anyway that's all i'm saying right yeah yeah so that's the thing is also one of the big things about what I'm talking about here is it's absolutely morality first and money second. And he essentially points out that the for-profit colonies in America mostly fail, but it was the religious ones that the cohesion and commitment to make it through the brutal winters. Just like the religious maximalist community has

Starting point is 02:59:35 the cohesion and commitment to make it through the brutal crypto winters. And, you know, bring it back around to what we were talking about earlier. And just like the situation that we're potentially entering in the US, it could be, you know be like the next Great Depression. It could be the Great Stagnation or the Great Stagflation or the Great Inflation. It could be not something that bounces back in a year or two years like our previous experience, but something where the government cannot print money and cannot fix it. And it has to actually be fixed with genuine innovation and not top-down control and silencing of all dissent and not anarchy and shooting people, but actually innovation that could be, by the way, very non-consensus.

Starting point is 03:00:14 The reason, by the way, I bring up something like carb-free or sugar-free, rather, is if you think about great startups, some of them are very ambitious sounding like SpaceX, and others sound incredibly stupid and trivial like 140 characters. But now today, both Twitter and SpaceX are big companies. And a lot of startup societies will be similar. They'll either sound totally trivial, like carb-free, or insanely ambitious, like FDA-free. And the thing is, you don't necessarily know which startup societies are going to work. You just have to run the experiment and allow people to set them up, society as a service, and allow people to opt into them. And that's what a lot of this book is about.

Starting point is 03:00:58 So I want to take one quick sidebar, and then we're going to come back to the main thread. In the very beginning of this conversation, I asked you to comment on the current state of the crypto market and the India sphere, and we did not get to the India sphere. Would you mind just taking a few minutes, not very many, but just a few minutes to share any and all thoughts, first defining what India sphere means, and then thoughts on the India sphere. Here's what I'll say about India. I will just give a couple of links because I can talk about it verbally, but Sanjeev Sanyal actually put out an economic survey of India. Here, I'm just going to link that here, about three or four months ago. And it just has tons of maps. And those maps show like nighttime luminosity, the National Highway Network, the airports, the water connections. The issue is, this is obvious if you're on the ground, but it is the most obvious for somebody who knows India enough to have visited, but it's not there every single day. Cause if you're there every single day, it's kind of gradual. It's an improvement, but it's gradual, but you don't necessarily

Starting point is 03:02:18 appreciate it. And if you've never come and you have nothing to benchmark it against, you don't see the changes, but for intermittent visitor it's astonishing what's happened and what's really good about this set of graphs is it shows it for the whole country right so lighting highway buildouts airports basic infrastructure has been dramatically improved over the last 10 years yeah tap water potable water right potable water exactly like so the thing is, India is becoming, and 4G and all the internet stuff, if you look at this whole thread, the second reference I point you to

Starting point is 03:02:51 is a article called The Internet Country by Tiger Feathers, substack.com, okay? And that is a ton of graphs and just the digital story. And it's showing the build-out of literally like a billion people now. It's like 800 million, something like that, got onto some of the fastest, cheapest mobile internet in the world over the last five years.

Starting point is 03:03:12 And so the H-1B visa doesn't even matter anymore. What matters is the TCPIP visa. The labor shock this represents, the culture shock this represents, most people haven't gamed this out, but the majority of English speakers on the internet are or soon will be Indian. English-speaking culture is going to be influenced by Indian culture. It's just like this total thing that's not on people's radars. They have not priced this in.

Starting point is 03:03:37 Most of your followers will probably be Indian by 2030 or something like that. Most of your upvotes, most of your comments and stuff, a very large fraction already are, but it's like two giant tanks of water that are now connected by the internet and that are like diffusing into each other. The other thing is also during that process for many years, Indians had, you know, like a, like my parents' generation, because they grew up in India, they came over with accents and so on and so forth. They had portable technical skills in engineering or medicine or something like that. But they weren't really culturally fluent.

Starting point is 03:04:12 They knew how to operate in India, but not really in the US or in the globe. The internet dramatically changes that because all those kids in India understand Instagram memes and TikTok and all that stuff. They are internet native. They've learned it as a second language. And maybe if they speak, they might have an accent, but even that it's like, you know, you're getting AI audio generation and so on and so forth. So the cultural fluency is there in a way that was absolutely not there. So there won't be like foreigners, you know, you won't know that they're Indian in a thread. That's a huge difference. That many people has not been culturally acclimatized that quickly ever before. So that's like on the internet component.

Starting point is 03:04:58 I don't think people have thought about. And then the government component, you know, look, there's pros and cons of any government. And in many ways, I think India's government is like two steps forward, one step back. There's a saying, India disappoints both the optimists and the pessimists. But two things about that. That's a good one, right? It's not mine, but somebody came up with it. It's pretty good. So this link that I just pasted in, if you just go and you read the India budget government document. And just to pause to tell people that I'll put all of these links in the show notes at

Starting point is 03:05:31 Tim.blog slash podcast. So you'll be able to find all these very easily. Please, please continue. Yes. So it's like, it's got digital universities, drone farms, telemedicine, open source. It is an extremely tech savvy, future forward thing, right? Like it's insane how smart it is. Don't take my word for it. Read it yourself. And then as contrast, go and read Mike Solana's article. Mike Solana's great guy, smart guy from Founders Fund. He's got a subset called Pirate Wires. His article he wrote called Trillion Dollar Paint Job from last year, August 11, 2021. Yeah, piratewires.com. Yeah, piratewires.com, and the article is called Trillion Dollar Paint Job. What he pointed out about six months before that set of tweets, about nine months ago, is this gigantic multi-billion dollar budget is, what are they building? The only thing they were doing was banning cryptocurrency.

Starting point is 03:06:32 He was like, the one exciting thing in the entire bill were the charging stations for electric vehicles. He's like, charging stations for electric vehicles account for a tiny fraction of expenditure and appear in almost every recap of the bill. Why such relentless focus from the media on so minor an element of our bold new infrastructure strategy? I think we're all desperate for a sense of forward motion. The charging stations at least represent something new, a physical change that alters the world for the better.

Starting point is 03:06:57 Beyond that, it's not at all clear what our political leaders are trying to build. I do, however, have a sense of what they're trying to destroy. Bingo, right? Essentially, the East Coast establishment, the US establishment, basically hates these tech interlopers. Rather than figure out how to have everybody take a cut or whatever and level up together, has decided to try to fight it, which is now resulting in, I think, going to be a bad... like some of it actually worked where they managed to wokeify and capture Google and these big companies, which is really bad because it means that they are going to be turned into surveillance machines already. Have you seen the Google AI thing that's trying to say landlord is bad language in your Google

Starting point is 03:07:38 doc? Do you see that? No, but happy to link to it for people. Yeah. Yeah. No. So it's like Google Docs landlord suggest thing. I mean, the thing is, look, it's Google, right?

Starting point is 03:07:51 There's this apocryphal story, which I believe is not actually true, but it's like the reason that Spanish people speak Spanish with a lisp is because supposedly the king spoke with a lisp and wanted people to do that, right? That mythical story, Google has literally billions of users. It has, if it decides to use it, the power to shape language and speech and thought with its suggests, with its autocompletes, with things like this. So that power in centralized hands is an insane thing. It's almost impossible to, because undetectable, you kind of, you think of yourself as paranoid. This is an explicit example where the suggest is explicit, right?

Starting point is 03:08:30 Anyway. Yeah, the sanitizing of cognition. Yeah, it's wild. So that will be a way that the social war is going to be fought where Google and things like that are weaponized against the population, which is why we need these Web3 and other services so that you can get off of Google and get off of Amazon and get off of these wokefied things. Anyway, coming back up, rather than trying to work with tech, they wanted to fight it, kill it, wokefy it, antitrust it, capture it. They've been partially successful in that. What they've also done is they've turned the latest generation of tech founders very much against the US establishment. All the guys who are running companies that are worth less than $100 billion are basically pro-Bitcoin and less aligned with the US government. I should say all, but let's say, I don't know, if they managed to

Starting point is 03:09:15 capture Google, they did so at the cost of splitting, alienating, and polarizing a generation of up-and-coming founders, not just in the US, but very importantly, outside. Tech is being pushed outside of the US, and the US is no longer the majority of tech. Most tech actually happens outside the US. So the whole concept that's very America-centric, that it's all in Silicon Valley. Silicon Valley is, have you heard the term metonym? Nope. But I guess it's like an antonym or a or a synonym but it's a metonym so it's a word that

Starting point is 03:09:49 what is like an umbrella term that captures a bunch of things so a metonym is when you use a place to stand in for a concept so like you know hollywood is movies and silicon valley is tech and so on and i had this tweet which was deprecate metonyms via decentralizing technology. So finance is not Wall Street. Advertising is not Madison Avenue. Film is not Hollywood. Education is not the Ivy League. Space isn't NASA. Cars are not Detroit. And technology is not Silicon Valley, as obsolete as Broadway. And the thing is, you can already see some of those things happening, like cars are not Detroit, it's Tesla. And space isn't NASA, it's SpaceX. And film, it's starting to move away from Hollywood as well. Advertising is already not Madison Avenue, or it's arguably

Starting point is 03:10:30 moved away quite a bit. But once you see that, and you apply that to all of them, you're like, oh, all of those things were like points in the US which dominated certain industries, and all of them are getting decentralized by technology at the same time. Anyway, coming back up. So with the India thing, A, there's Sanjeev Sanyal's survey, economic survey of India, which shows all the maps. B, there's Tiger Feathers, which surveys on the digital buildup. C, there is this link to the Indian government's spending bill. It's not just spending bill.

Starting point is 03:11:01 It's basically their budget, basically. And then D, the comparison of that to the American budget of, I think, the same fiscal year or plus minus one, and the enormous gap, absolutely enormous gap where technology is seen as a tool in the US. I understand why. It's because the rise of technology correlated with the relative fall of American living standards globally relative to the rest, but it didn't have to be like that in my view. With better leadership, it didn't have to be like that.

Starting point is 03:11:37 So that's a quick summary on India. Hopefully that's enough data. That's great. That's great. And we will link to all these things in the show notes. So Balaji, at Bology S on Twitter. Oh, wait, wait. Can I say one more thing?

Starting point is 03:11:50 Let me say one more thing. You can. Well, you absolutely have to also mention where people can find the network state, how to start a new country. Yes, you can say another thing. I will say one thing and I'll say that last thing. So the one thing I was going to say is going back to that God state network framework, I'mporic Indians connected to certainly many Indians within the Indian territory, but not necessarily the Indian government per se or Indian establishment

Starting point is 03:12:32 even. The Indian network I'm very bullish on. And actually, one of the dark horse projections I have in the book for the future is that by 1945, the 20th century was the USA versus the USSR, right? The Americans versus the Russians, the two guys who were on the edges, who everybody could see growing. They had huge populations in the 1800s, but they were kind of on the periphery. Europe just slugged it out between themselves. And eventually, in that title fight, it was the Americans versus the Russians. I kind of think that by 2040 or 2050, maybe sooner, maybe later, that there's a chance that this century is the Chinese state versus the Indian network. So the centralized Sinic state versus the Dharmic decentralized global network. I kind

Starting point is 03:13:20 of think that's how things line up. And the real sort of, you have to sort of squint to see this as an edge case, but in the same way the UK sort of handed the torch to the US, which was an English-speaking kind of thing, in some ways the US, I think, may hand the torch because the global English-speaking internet is going to become India. And insofar as the US as a country doesn't exist and you have all these startup societies and so on, that decentralized English-speaking internet will have very strong Indian representation around the world, and the opposite of it will be the Chinese control. Now, I know that's very speculative, and I'm connecting a bunch of dots and so on,

Starting point is 03:13:58 and that's not at all like one very important thing here is it's probably going to come out on the 4th of July. None of what I'm saying or I'm thinking in the book, I would not call any of it like anti-American any more than I'd say then Washington was anti-British or that Herzl or Ben Gurion was anti-British or Lee Kuan Yew was anti-British or even the Indian independence movement was anti-British. They were critical of the British for a time, but afterwards, after a little bit of distance, America, India, Israel, Singapore all have good relations with Britain. They're basically post-British. They weren't anti-British. And the key question is rather than be like pro-American, anti-American, if this won't last,

Starting point is 03:14:40 if this current Pax Americana won't last, what does post-American look like without any hostility, really, towards the old thing? Indeed, with gratitude towards everything it contributed, but recognizing that not everything can endure. People realize that the currency won't endure, but perhaps the state won't endure either. We need to think about positive new models for the future that do not involve condemning the past. I mean, any more than we don't condemn Britain all the time. We're basically grateful towards it or positively inclined towards it, but we're moving along another axis. So rather than be pro or anti-British, rather than define it as post-British, rather than pro or anti-American, what does post-American look like? And prepare for that. And you know what? Maybe I'm completely wrong.

Starting point is 03:15:22 Maybe all the base raters are right. Maybe everything just continues and so on. But if you think that we might want to actually try to build an alternative in the same way, the founder or an activist doesn't simply let things happen, but takes things into their own hands. I think I've got a model for that, a positive sum model, putting it out there. That's at thenetworkstate.com. You can also read it at 1729.com. And that's like an online book and so on. So by the time this podcast goes out, that'll probably be live. All right. So one more time, what were the URLs just so people catch them? So go to 1729.com and you can read the book online, download the PDF, and you can click.

Starting point is 03:16:01 And if you want to buy it on Amazon, so it's free to read online and you can check it out. Oh, and also subscribe because we're going to be releasing more chapters and so on. I know that normally an app is supposed to be dynamic and a book is supposed to be static. But I think of this as a book app

Starting point is 03:16:18 because you put something out into the world and people are going to react and there's going to be incomplete things or things I want to say differently and so on and so forth. And so I'll keep editing it and I'll keep setting out new stuff. So you can subscribe and get all that for free. If any of this interested you. 1729.com. And we talked about the origin story of that separately, so we won't get into it right now, but it's basically the publisher of the book. Yes. Apology. Very nice to see you

Starting point is 03:16:43 again. And for those who aren't watching the video, you know, these are two contrasts in style. You've got sort of my floral pattern full of all sorts of embellishments that I need to keep my mood stabilized to get even a modicum of anything done. And then you've got Balaji in his Spartan, what looks like tech war room preparing for the future with no golden fetters, no dross. I do have a plant here. It's just out of frame. And I have, it's like the Canadian girlfriend, right?

Starting point is 03:17:19 My plant that's just out of frame, right? And do you know the reference? I don't. I like it, even though I don't understand it. It's basically like, frame, right? And do you know the reference? I don't. I like it, even though I don't understand it. It's basically like, oh, I have a girlfriend, but she's in Canada. That's Balaji's plant, which is a cactus that needs water once every 70 years, just as a symbol of resilience. That's actually right.

Starting point is 03:17:40 That's right. That's right. It is highly resilient. And I have my whiteboard on the back for my math. So that's my... Oh, man. Well, Balaji, I really appreciate you taking the time. I'm excited for you. I'm excited for people to read The Network State, How to Start a New Country. You can find it on 1729.com. Check it out. Balaji, of course, you can find on Twitter. He is insightful and prolific at Bology S.

Starting point is 03:18:05 We will link to everything we mentioned in the show notes at Tim.blog slash podcast. And thank you, Bology. Always fun to see you. Thank you, sir. I appreciate the time. Alright, thank you. And to everybody listening, be safe, be kind, and thanks for tuning in.

Starting point is 03:18:23 Hey guys, this is Tim again. Just one more thing before you take off and that is Five Bullet Friday. Would you enjoy getting a short email from me every Friday that provides a little fun before the weekend? Between one and a half and two million people subscribe to my free newsletter,

Starting point is 03:18:38 my super short newsletter called Five Bullet Friday. Easy to sign up, easy to cancel. It is basically a half page that I send out every Friday to share the coolest things I've found or discovered or have started exploring over that week. It's kind of like my diary of cool things. It often includes articles I'm reading, books I'm reading, albums perhaps, gadgets, gizmos, all sorts of tech tricks and so on that get sent to me by my friends, including a lot of podcast

Starting point is 03:19:05 guests. And these strange esoteric things end up in my field, and then I test them, and then I share them with you. So if that sounds fun, again, it's very short, a little tiny bite of goodness before you head off for the weekend, something to think about. If you'd like to try it out, just go to Tim.blog slash Friday. Type that into your browser, Tim.blog slash Friday. Drop in your email and you'll get the very next one. Thanks for listening. This episode is brought to you by Shopify. Shopify is one of my favorite companies out there, one of my favorite platforms ever. And let's get into it. Shopify is a platform, as I mentioned, designed for anyone to sell anything, anywhere, giving entrepreneurs the resources once reserved for big business. So what does that mean?

Starting point is 03:19:50 That means in no time flat, you can have a great looking online store that brings your ideas, products, and so on to life. And you can have the tools to manage your day-to-day business and drive sales. This is all possible without any coding or design experience whatsoever. Shopify instantly lets you accept all major payment methods. Shopify has thousands of integrations and third-party apps, from on-demand printing to accounting to advanced chatbots, anything you can imagine. They probably have a way to plug and play and make it happen. Shopify is what I wish I had had when I was venturing into e-commerce way back in the early 2000s. What they've done is pretty remarkable. I first met the founder, Toby,

Starting point is 03:20:29 in 2008 when I became an advisor, and it's been spectacular. I've loved watching Shopify go from roughly 10 to 15 employees at the time to 7,000 plus today, serving customers in 175 countries with total sales on the platform exceeding $400 billion. What does that really mean? That means every 28 seconds, more or less, a small business owner makes their first sale on Shopify. More people in more places of all ages every single day. They power millions of entrepreneurs from their first sale all the way to full scale. And you would recognize a lot of large companies that also use them who started small. So get started by building and customizing your online store, again, with no coding or design experience required. Access

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Starting point is 03:23:24 half so your partner can choose a totally different temperature. My girlfriend runs hot all the time. She doesn't need cooling. She loves the heat and we can have our own bespoke temperatures on either side, which is exactly what we're doing. Now for me and for many people, the result, eight sleep users fall asleep up to 32% faster, reduce sleep interruptions by up to 40%, and get more restful sleep overall. I can personally attest to this because I track it in all sorts of ways. It's the total solution for enhanced recovery, so you can take on the next day feeling refreshed. And now, my dear listeners, that's you guys, you can get $250 off of the Pod Pro cover. That's a lot. Simply go to eightsleep.com slash Tim or use code Tim. That's

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The Tim Ferriss Show - #606: Balaji S. Srinivasan — 5-10-Year Predictions, How to Start a New Country, Society-as-a-Service (SaaS), Bitcoin Maximalism, Memetic Warfare, How Prices Are Born, Moral Flippenings, The One Commandment, and The Power of Missionary over Mercenary

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