What Bitcoin Did - DID THE US GOVERNMENT CREATE BITCOIN? W/ Mark Goodwin

Episode Date: January 17, 2025

Mark is the former editor in chief of Bitcoin Magazine and the author of The Bitcoin-Dollar: An Economic Monomyth. In this episode, we discuss the evolution of the Bitcoin-dollar thesis, Tether, and Bitcoin as a tool for challenging state power. We also get into the Strategic Bitcoin Reserve, if Bitcoin was created by intelligence agencies, and Mark's latest article, The Evolution of the Militarized Data Broker. MASSIVE THANKS TO OUR SPONSORS: IREN: https://www.iren.com/ RIVER: https://river.com/wbd CASA: https://casa.io/ LEDGER: https://www.ledger.com/

The fun thing about this is we do have a chance to attack the dollar system here and minimize this chokehold that the U.S. Empire has in the world. So why would we encourage the opposite when we have a chance? You know, if the bee shows you its neck, you fucking better not miss. And right now, not only are we missing, we're like, hey, hey, hey, over here. Like, I'm over here with the fucking javelin. Like, look at me. And it's going to eat us, you know? So let's not get eaten.

You know, let's fucking stab it in the neck. We'll get into that. So good to see you, Mark. How you doing? Good to see you, too, Danny. Great, man. Yeah, can't complain. A little under the weather, but, you know, it's nice to find out.

We've cut the weight here, you know. No Peter, no Whitney. This is the show everyone wanted. So here we are. Yeah, exactly. No, yeah, super happy to be here, man. Thanks so much. Good.

I'm sick as well, so we'll try and get through this. But we're going to get into your latest piece. Has it actually dropped yet? When's that dropping? It will be out tomorrow morning, so by the time the pod hits, it will be out. But before we do that, we need to talk about strategic Bitcoin reserves. So I've only done like 12 shows or something, and it's come up in almost everyone, and everyone is insanely bullish about this thing.

And then we have Mark Goodwin, sat on the other side of the fence. You wrote the Bitcoin Dollar, which kind of laid a bit of the groundwork for this. And so I want to get into it with you. So do you want to, I think probably a good place to start is for you to give kind of an overview TLDR on the Bitcoin dollar and we'll go from there. Yeah, totally. So it's actually kind of ironic that we're now having discussions about like literally, you know, the federal government becoming a hedge fund and holding Bitcoin, right?

Because that was actually never the thesis of the Bitcoin dollar. The Bitcoin dollar was not really a direct peg in any way. It was more akin to like an analog to the petro dollar where, you know, there never was literally a petro dollar peg where it was like X amount of dollars from. a barrel of oil. That was never the situation. The situation was, you know, coming out of, you know, the highly inflationary era of the early 70s when we, like, got off the gold standard, the Nixon shock in 71. Obviously, a lot happened before that, that, you know, got us there, London gold pool exploding and all this stuff. But, you know, formally anyway,

dollar leaves the, you know, the buy metal standard, the gold standard in 71. And so what we do is because the cool thing about hard money is that, you know, it limits growth of the monetary supply because it's how much gold is coming out of the ground, you know, two and a half percent a year or whatever, that's how much the, you know, your economy can grow from a, you know, a monetary inflation standpoint, not like a price inflation standpoint. But we sever that tie, and then all of a sudden, you know, we're printing a lot of money and, you know, things are inflating. And that's, you know, the first real moment where we're seeing a lot of, you know, negative stuff from the dollar system affecting U.S. citizens.

And so as a way to sort of counterbalance that, we need to find demand for treasuries. If we're going to be printing all these dollars, we need to find someone to buy dollars to buy their country's debt because it's not just a simple one-to-one peg with gold anymore. So we pretty much immediately invade. I don't know why I'm laughing, but pretty much immediately invade the Middle East

and start establishing this, you know, this, you know, de facto monopoly on the price of oil. And we say, hey, you know, you want to industrialize, you want to buy oil, you got to buy dollars first. So we found, you know, this artificial demand, basically, for U.S. debt. And that system grows and grows. And the petro dollar system, you know, kind of encapsulates the euro dollar system. And we start to see all these kind of offshore dollars that aren't pegged directly to, you know, in the euro dollar's case to treasuries, but we're seeing this net demand for dollar-based liabilities. So the idea of the Bitcoin dollar was, it's the next evolution of that.

So in my thesis, it's, you know, the COVID government lockdowns are super associated with the birth of the Bitcoin dollar. So that second week in March, we see that crazy event that, you know, sort of infamously, you know, oil futures go negative. And so, you know, again, it's futures, but it's like, you know, We're post 9-11 kids or whatever. It's like the U.S. has just always been invading the Middle East and doing weird things there all of a sudden where someone's getting paid if futures work this way, but like $100 to grab a barrel of oil or whatever to take it away. That doesn't make any sense.

And gold collapses, Bitcoin collapses. Bitcoin goes to $3.300 or whatever, $3,000. And then in the next year, it's 20 X's. we pull out of Afghanistan and we begin to sort of demilitarize our presence in the Middle East. There still is one there, but less is less like national security interest level. And of course, we start to see a huge embracing of Bitcoin. And I think the thing that is really interesting about that is, you know, that's about six weeks before the next halving, which was like May of 2020.

And that having was really important because it was the first time that the relative issuance, the inflation rate of Bitcoin fell below the target rate of the dollar at 2% and fell below gold coming out of the ground at 2.5%, 3%. So kind of mathematically, it made more sense to be in Bitcoin from a debasement standpoint than it did to be in the two other kind of commodities of, or currency of the world, the two other big store of values there in gold and the dollar. And obviously, we're creating this new financial system. How does this tie into the dollar at all? Well, like the

petro dollar, we basically create a de facto monopoly where if you want to buy Bitcoin, you've got to get dollars first. Again, same with the petro dollar. It's not a literal monopoly. You could settle in euros and there were some other settlement

payers at play there in the petro dollar system. But really it was dollars. You want it to play with the big boys. You got to buy dollars. And we've seen that sort of replicated in the Bitcoin system through the, you know, perpetuation of stable coins. So at the start of 2020, Tether's like not even $10 billion, I don't think. You know, they're barely, maybe they crack double digits, 10 billion that year. And now they're at fucking 150 plus. They're like the most profitable per-. Are they making something like 10 billion a year profit now? Something like that. It's in.

sane. Yeah, off of buying U.S. debt, interest rates are really high. So that's the other big part of the COVID lockdowns is obviously central bank coordination, central banks around the world bring rates to zero, if not below zero in some cases. And

then, you know, we raise rates faster than ever in history, not higher than ever. Volker in the 80s brought us to double digits, but, you know, we're seeing Jay Powell bring us to five and a half, basically. and, you know, tethers of the world are able to buy these short duration T-bills, you know, secure it, you know, U.S. debt and make a pretty penny on these yields. And then, you know, specifically

with tether, you know, then they get to, you know, just buy Bitcoin with it and kind of grow their company, invest in a whole bunch of things, buy rumble, do whatever. And, but yeah, they go from being under 10 billion at the start of 2020 to now being like, you know, a top 20. level buyer of U.S. debt from a nation state standpoint. And basically the money market, the liquidity pair of Bitcoin has become these dollar stable coins. And this system sort of kicks off in earnest, where if you really want to play in the Bitcoin system, you know, you got to play with dollars. You want to cash out serious money in the Bitcoin system.

Sure, there are other pairs, but the volume on them is very, very low. So we've created kind of, I mean, I think the tether name is very funny because it's kind of literally doing what it says it's doing and more or less tethering the dollar system and the debt-based system of the U.S. to this neutral, you know, decentralized distributed asset, you know, very similar to kind of, you know, people have flowed to this driven dilemma thing of, you know, how does a nation with 36 trillion dollars in debt? you know, pay its debt. You know, Luke Groman, who I know you've talked to a bunch of, you know, points out these

kind of important metrics of when tax receipts, you know, are no longer, you know, paying and servicing the interest rate or the, or rather the servicing of the interest of the debt and the defense budget. So, you know, these are kind of the three big things to look at. And so right now, you know, we're paying more to just keep the dollar alive. and interest payments just servicing the debt than we are paying our military and certainly way more than tax receipts that we're getting in, you know, from citizens of the country. So the growth is really like we have to find a place to sort of shovel, you know, trillions of dollars of debt. Well, how do you do that? You know, you could argue that you would create a neutral asset sort of in line with, you know,

sort of this SDR, you know, the bank or kind of concept of this neutral, you know, reserve asset. And then you basically inflate into it by creating some sort of mechanism that still pethers it to U.S. debt. So Bitcoin basically is that. You know, it's a really good, useful tool. Sometimes I worry that my book is a cookbook and not a warning here, but, you know, we're seeing basically, the U.S. government embracing Bitcoin, Donald Trump is literally saying, we'll cut him a little crypto check. Obviously, he could mean something that's not Bitcoin,

but I think practically what would make the most sense and would be able to actually achieve a market capitalization large enough to give us an ability to get out from under this 36 trillion, it would have to most likely be Bitcoin. And stablecoins, being the kind of way that Bitcoin scales. It's a great store of value asset.

It's a great reserve asset. It really does compete with the treasury system. It doesn't really compete with the dollar. If there was currency failure somewhere and billions of people wanted to come into Bitcoin tomorrow, they wouldn't be able to. There's just not enough block space. Certainly wouldn't be able to service their day-to-day transactions. Opening lightning channels even would be a disaster at the current optionality, right?

So stablecoins sort of present themselves as the natural money market to Bitcoin. So Bitcoin goes to $200 trillion or whatever. Stable coins be at 10 to 20% of that. And now of a sudden you got $20 trillion of demand for treasuries, and the U.S. can sort of begin to crawl its way out. And the interesting thing there is you don't actually need to buy Bitcoin at all to do that. You can do the petrodollar analog. And the U.S. doesn't even need to touch Bitcoin.

holding on the books at all, and they can kind of allow the, you know, through influencers, through whatever sort of curate consent for, hey, let's scale Bitcoin with, you know, tokenized, dollarized debt rather than, you know, Bitcoin, which I always thought was a strange thing that, you know, people, it seems like the Bitcoin community wants shitcoins to fail more than they want the dollar to fail, which I think is very strange, because that's what I always looked at as the big batty here. My framework for the U.S. government is that generally, you know, we're really terrible to our citizens and really terrible to the citizens of the world. We're arguably, you know, the greatest terrorist organization in the world. And here we are,

Bitcoiners having, you know, done 14 years of let's end the Fed, now we're here saying, you know, please, Mr. Besant, you know, put Bitcoin on the books, let's mend the Fed, you know, America, America, who, who, now that we got our guidance. Now that we got our guidance. in there. And it's like, well, why? Why are we doing that? Why are we encouraging it, right? Bitcoin is for enemies. Sure, of course, but that doesn't mean we need to encourage and lobby our enemies to buy Bitcoin. Like, we can just not do anything to try to filter them out. Or, you know, I've never proposed, let's kick these guys off the base layer or, you know, let's go find Black Rock's, you know, address and fork it off. You know, I've never suggested that publicly. You know, if you want to do that,

go ahead. But it's not something I've ever, you know, as I've never perpetuated because I understand Bitcoin is a permissionless system. You know, you want to do taproot assets, put dollars on Bitcoin. Go ahead. I can't. I can't stop you. And I wouldn't really want to implement anything that would stop you.

But I don't know why we're, you know, lobbying. Well, actually, I'm sorry, I take that back to Annie. I know why we're lobbying because we want our fucking bags to be pumped the fuck up. That's why we're doing it. But at the expense of what? at the expense of the ability for Bitcoin to be more distributed amongst the world. Not that many people own Bitcoin. It is decently, it's very distributed for sure compared to most currencies.

And obviously no one has the ability to print more of it on its own, which is really cool. That's what's so powerful about it. But like, most people don't own Bitcoin. I don't even believe that, I don't know, 5 million people own Bitcoin, as in self-costly Bitcoin. I don't believe it's that high. Yeah, I think I agree with you. I mean, maybe Lop could do a really good thread about why I'm wrong. And I hope he does because I'd love to see the data that proves that I'm wrong.

But just because unique addresses, that doesn't mean that there's separate people. There's so much congestion and centralization within the brokers and the exchanges and whatever. And it's like, I just don't think there are actually that many people that, you know, self-sovereignly hold Bitcoin and, you know, would be able. to transact with it if things go crazy. Bitcoin becomes very expensive. Everyone wants to use it all of a sudden. Fees go through the roof. It's like, okay, cool. You have 0.01 Bitcoin. You know, you're going to spend how much of it to make a transaction. It's not really... A lot of people are in the IOUs, but I don't think that many people are on chain. But let me ask you, I want to go back before we go into that stuff. So you talked about Tether there, which like them or not, they're an incredible

business. Like they have done very, very well. They're buying more treasuries than like, Canada, Germany, these huge nations. Totally. But the one thing that I think is quite interesting is back when I first kind of came into Bitcoin, Tether were under so much scrutiny. They went through that case with, was it the New York District Attorney? Yeah, SDNY, yeah. And now they seem like they're part of the crew.

And I want to know what you think on that, whether there's something nefarious there, or it's just they've got so big and they provide so much demand for treasuries that they've kind of had to let them in. Well, I think there's two answers there. One is the conspiratorial brain, my lizard brain kind of ticks off and goes, man, what an operation to come out and pretend that you don't have the reserves and you know, you're this shadowy company and you're just a total, you know, joke of, you know, holding Chinese real estate paper and all this stuff. And then, oh shit, Howard Lutnik comes out and one of the largest primary dealers for the New York Fed is like, yeah, we have all their money. One of the most important people in the dollar system is like, no, tether's awesome.

We have all their money. So to me, I sort of, you know, I've been blocked by Bitfinex for like years. It's like, you would think that me and Bitfinex would have like a group chat being like, oh, fuck, Tether, you know. But like, no, like, he's on the total opposite. Like, I don't agree with most of the Tether truthers that say that tether's a fraud and it's going to blow up. It's like, no, there's an innate private public partnership that is fundamental to a company that holds this much treasuries. The U.S. government has to sell the treasuries to tether. Like, come on.

Like, they could choose not to sell them to tether. Or rather, you know, maybe they're buying them from other sources, but it has to be through these dealers that are, you know, authorizing within the regulatory regime of the government. to be able to amass that much U.S. government debt. They have to be aware of your practices and have to more or less condone it because they could seize it at any point. So Tether has to play ball with the U.S. government. You could argue where it came from

if Tether really did come out of, you know, technologists looking to do fun things with Bitcoin, which, you know, there's a certain argument to be made there. But where they are now, it's like, well, yeah, they're onboarding the Secret Service and the FBI and IncUTEL CIA funded chain analysis, just write on to their platform because if the U.S. government says,

hey, we heard about this Hamas thing or whatever, or sex trafficking or whatever or drug dealing, we're going to shut you the fuck down and seize your treasuries unless you do this. Yeah, they may be one of the fastest growing companies ever, but they are at the whim of the regulatory regime of the U.S. government because they hold $150,000 billion in U.S. government debt.

but also the U.S. government needs them too. That's the interesting crux of this now. And so whether or not they started with the plan to do this, which I think you could absolutely make a case that they did, which I more or less have made that case with the chain series that I did for Unlimited Hangout. Whether or not that's where it came from, where it is now, it's certainly they are like too big to fail,

I think, as a net buyer of treasuries at a time when it's really hard to sell treasuries. And I think that the stable coin market is not going anywhere. It's about to explode, frankly. And I think we'll see trillions of dollars of highly regulated stable coins. And there's a chance that it won't be tethered. That's the winner out of all of this. I think there's a good case to be made for a PYUSD from PayPal and Paxos coming in.

That's played the game maybe a little better. You could argue tether is actually, more of a tokenized liability of a company that holds T-bills rather than actually, you know, the tokenized U.S. debt. And, you know, we've seen some issues with U.S.D.C. like when SVB went down, you know, they lost the peg because they lost $3.3 billion, which is just ridiculous that they had it in an account like that, right? So we're going to see the stable coin wars continue. And so whoever is the winner, you know, I don't think it's going to.

be one winner. I think we're going to see Bank of America, Wells Fargo. You know, all of these banks really move in and issue their own stable coins. But yeah, it's not going anywhere. So I think innately the private public partnership that is capital creation, it's always been that way. You know, banks got to buy T-bills to create dollars in banking and checkings accounts. The dollar has been digital for a long time. This is just the current iteration of it. and Tether was, you know, they did it the best, and they did it first, really. So quite literally did it first. So I think that's why we see the huge capitalization.

But I think it's anyone's game moving forward. They obviously have a huge head start. And with like a Lutnik who owns 5% or something of the company, who holds all the T-bills, literally becoming the Commerce Secretary in fucking five days, it's like, well, they probably have a pretty good advantage here. Obviously, Brock Pierce, who founded Tether, has a huge connection with the PayPal group, which we've talked about before. But he was their largest merchant for three years. He created the IGE project with them, which was like their credit card processing group.

He ran a gaming fund called Clearstone Gaming out of the IDEA Labs Incubator, which was the first institutional investor in PayPal alongside Goldman Sachs. IGE, which is Brock's company, gets sold to Goldman Sachs. Steve Bannon becomes the CEO of the company. Bannon is obviously very connected into Trump World, PayPal, with Peter Thiel, and David Sachs is the incoming cryptosar, right? The AI cryptos are. So there's like so much regulatory goop that could absolutely see Tether, you know, maintaining this lead.

So I think we'll see. It's going to get wild. I think Lumbus said that today. you know, things are going to get crazy. You know, so who knows as Bitcoin crosses 100K back again. So, sablecoins will play a huge role, both in the future of the US dollar system and obviously Bitcoin itself. What Bitcoin did is brought to you by our lead sponsor and Massive Legends, Iron, the largest Nasdaq listed Bitcoin miner using 100% renewable energy. Iron are not just powering the Bitcoin network.

They're also providing cutting-edge computing resources for AI, all backed by renewable energy. We've been working with their founders, Dan and Will, for quite some time now, and have been really impressed with their values, especially their commitment to local communities and sustainable computing power. So whether you're interested in mining Bitcoin or harnessing AI compute, Iron is setting the standard. To find out more, head over to iron.com, which is iran.com. So, I mean, personally, I think Tether's going to be hard to be.

I don't, USDC certainly isn't going to do it. I don't know who's using USDC. It seems like that's just going to sort of be an auto-ran. But the thing that I want to ask you about is kind of the humanitarian side of Tether, because I understand all the broken incentives within Tether as a business. But there's lots of people that benefit massively in the global south or wherever from being able to step outside of their regime and living within high or hyperinflation. How do you kind of balance that?

Well, you know, I'm sympathetic to it, of course. but I think from a user standpoint, I think stable coins are objectively a worse technology from a surveillance ability and feasibility and programmability standpoint. Obviously, when you have your dollars in a bank, which there is dollar access to people in other ways outside of the U.S., there's actually a really,

interesting book called The PayPal Wars by Eric Jackson, who was like an early marketing member of PayPal. And he like explains like one of his first days there of Peter Thiel kind of calling everybody in and doing this meeting. And he says, you know, like, hey, people around the world are getting screwed by their, you know, national currencies getting debased all the time. And, you know, what PayPal can really do is give everybody in the world the ability to move into dollars and sort of circumnavigate, you know, control on the city. And, you know, control on the citizenry of the nation state basically. And he's kind of proposing it as this huge, like, altruistic thing.

And I remember reading that being like, this is so similar to the tether, you know, propaganda, basically. That's like, oh, no, this is such a net good. It's so good. They get dollars. It's so good. It's like, well, the fucking dollar is inflating up the ass too. It's not like this is like this great thing either.

That's, you know, people are talking one out of one of their ends of their mouth saying, you know, Bitcoin's going to a million dollars tomorrow because the dollar's debasing and then the other side of their mouth saying, you know, it's so good we can bring the dollars to everybody in the world. It's like, well, which one is it, man? And these things are not as private as bank dollars are. You know, you're innately giving your banking information to the bank that you decide to work with, you know, when you use bank dollars. But that's really the only people that get access to your financial information. Private issued stable coins on public blockchains are like the worst combo of everything because they can be seized from you and

blacklisted. The FBI Secret Service, the CIA basically via chain analysis is on all of these rails. They're literally onboarded onto Tethers, you know, services. If they find a tweet or a thing or, oh, hey, you bought this, you know, part for a gun or you did this or whatever, they could just fucking take your money. They could seize it. Now, again, they're not really doing that yet. but the fact that they have the capabilities to do that is is kind of worrying.

And really, you know, this idea of unbanking the banked, it's like, or rather, excuse me, banking the unbanked, it's like, well, you're not really doing that. You're really just sort of charging a fee for them to use your bank account. In this case, Cantor Fitzgerald's account, you know, around the U.S. New York Fed to be able to get dollar access. And, you know, yeah, sure, you can do some cool programs. ability things, do some defy, do some lending, whatever, I think there is something to be said about that. But the downsides of the surveillability, the seasibility, the feasibility,

the programmability, that's what we're afraid of with the CBDC play, right? Isn't that what we're scared of? It's that. It's programmability, surveillanceability, and seasibility. And Tether gives all of that exactly to the regulatory regime and the law enforcement arm of the U.S. government. So are we really doing this altruist? thing by letting, you know, citizens of Argentina and blah, blah, blah. And I've spent time in

South America, right? And people love tether. Like, they really do. Like, I sympathize for it. But I think the, like, eventual outcome is there's going to be extreme in debasement of the U.S. dollar. Definitely, it will, it will stand up better than all local currencies. But, like, we're just extending U.S. empire via, you know, debt slavery. Like, didn't we all read Gladstein, right? Aren't we all like, hey, debt slavery bad? Why are we all cheering? hearing on, you know, a super high velocity tokenized U.S. government debt flying around the country, or rather the world, on public rails that, you know, a nation-state level, you know, surveillance firm can completely triangulate all of your transactions because they're published forever on an immutable

public blockchain. So I get it. I sympathize with the people that want to get out of their local currency. I think that it could be used as a tool to, like, as a stepping stone, you know, to get to Bitcoin or whatever, but like, get to Bitcoin. Because, you know, I don't think stablecoins are really this altruistic good. I think they're just the next evolution of U.S. dollar, which frankly has waged economic warfare across the world for decades, if not longer. And I don't want to perpetuate that system. And I certainly don't want to sell. this system to people that don't know any better

and I don't mean that in that citizens of the world, they're dumber than Americans or anything, but I just mean like they might not know they're being told that it's like this great thing, but they're not really being told about the downside. So there's dollar access around. I mean, the world's been dollarized for a long time. There's other ways to

get dollars. Cash is way better than stable coins. It's not even close. I know not everybody can get cash, but let's at least understand the risks and explain the risks with stablecoins when we sort of, you know, evangelize the U.S. dollars, you know, the debt of the U.S. government to the global south. I frankly think it's disgusting that we do that. This episode is brought to you by River.

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plus you have peace of mind knowing they do monthly proof of reserves and hold all client Bitcoin that wasn't withdrawn to self-custody. Open an account for yourself or your business at river.com forward slash WBD, which is r-I-V-E-R-com forward slash WBD. So I just want to get back briefly to the Strategic Reserve and then we'll get on to your article. So a while ago, Thomas Paki has said something to me. I've said this a load of times on the show because I think it's brilliant. He said that we're all going to be rich and depressed because the project failed.

Have you been really disappointed in Bitcoiners' reaction to the Strategic Reserve? And do you think we're kind of giving up on the idea of freedom money just for number go up? Yeah, totally. That's an amazing quote. that's, I mean, he's the man. So that's beautiful. I do agree. I mean, and, well, I wouldn't say that it's giving up on the idea of freedom money,

but it's like accelerating the towards the path of, you know, limited scalability, limited onboarding, limited distribution, you know, for what? Like, we're increasing chances of ossification because now we're creating a, you know, a path where, you know, it's a national security issue that someone wants to add, you know, a privacy tool to Bitcoin's base layer or something like that, you know, and I don't think we'll ever really see that, but, you know, people working on privacy tools are getting, you know, screwed around by the regulatory regime of the U.S. government. We have every reason to believe that will continue. Why would the U.S. government, which is claiming, you know, you read that

BPI piece, which I think, you know, I like a lot of the people at BPI, but it's very clear to me, that that was written from a U.S.-based, you know, this is what's good for the U.S., not what's good for Bitcoin. And that's their job, but I don't think that's really what we should be doing. And it really says that this is the store of value asset. It's this digital gold asset,

you know, the sort of Bitcoin standard theory. And I don't go full B-cash or anything like that. Obviously, you know, there's a lot of issues with centralization when you raise block sizes like that. But I think we should be working on ways to not ossify Bitcoin, keep developing it, and allow the ability for more people to scale UTXO ownership. And we're just not there yet. And I don't think the scaling solution for Bitcoin should be federated side chains or stable coins on federated side chains or

on Tron or whatever it might be. I don't think that that's the best way to create a new financial system for the greater good of the world. But yeah, I mean, of course, the fucking strategic Bitcoin Reserve will pump our bags. And there's some cool stuff we can do with pump bags. That's sort of the message a little bit. It's like, hey, we can exit and build with pump bags. It would be ridiculously hypocritical of me to come out here and say,

like, how dare you want to pump your bags and be like, I can go fuck off and do anything I want and build a cool thing and do all this cool shit because I've been in Bitcoin. long enough and now the bags been pumped. I want Bitcoin to be as permissionless and as accessible as it was when I found it. And I want there to be the opportunity that I was able to take because Bitcoin changed my life. I mean, when I found it, you know, I was working in bars, struggling with substance stuff and all this shit. And I found this thing to dig my fucking brain into. And it really did change my life in a really good way. I think there's a lot of

cult propaganda bullshit that goes on in Bitcoin. But that's true. I mean, that did happen to And it brought me my life and my family and all of this amazing stuff. I literally wouldn't be having this conversation now, if not for Bitcoin, it's very cool. But I want other people to have that opportunity. And when we create these basically gravity black holes for, you know, asset managers like BlackRock and, you know, frankly, terrorist organizations like the U.S. government to, you know, get humongous amounts of Bitcoin. We're just quite literally limiting the amount. It's a finite asset. So if we give 5% of a supply to the U.S. government,

we're capturing 5% of the supply that could be distributed. Would that 5% probably be bought up by Michael Saylor? Yes. But we should be distributing this stuff. It really doesn't work unless we distributed it out. There needs to be innately in a monetary system. It can't be equally distributed. You know, that's a thing that is just an oxymoron of a financial system.

There needs to be, you need to be able to express volatility between parties in this transactional settlement, so someone is going to have more than the other at the end of a transaction. There's no way to create a perfectly fair UBI-based kind of distributed system. You need to have winners and losers, but who do we want to be the winner and who do we want to be the losers? Let's let the U.S. government wither away. let's let this group that's really, you know, treated the world really unfairly for an extremely long time. I'm proud to be an American in a lot of ways. I think American culture is cool. I'm glad I can go on a podcast and say all of these things and have constitutional protection that I won't

get thrown in jail. I hope that stays. That's cool. I'm proud of America. You know, you know, there's cool things about America. But the financial aspect of it and the big government aspect of it. Let's let it wither on the vine. The scariest thing we could do in the Bitcoin system is have it rapidly appreciate and leave all these people behind. Let's let it be as slow as possible. That's the best way. We can onboard more people. I can buy more Bitcoin if we don't go to a million dollars tomorrow. It's like when it goes to a million bucks or even frankly, fucking now, it doesn't even make sense for me to buy Bitcoin. It's just like I'm not even chipping away at my cost of value or my cost, whatever. So, you know, winners and losers always in financial systems. So let's have the, you know, the World Reserve currency, you know, debt barons, you know, be the losers. And if that means that I have to, you know, be a little richer, a little later, then like, so be it. I would take that. I'd smash that button. I'd smash that button every day. And I understand why people don't feel that way. But I really think if they zoomed out and really thought about, you know,

What are the implications of the U.S. government holding 5% of the supply and then pumping Bitcoin up to, you know, this is the most important time in geopolitical technocracy ever. Like, I really think that. This is the most important time. And I think that's why we're seeing so much fucking insane shit. Drones flunking over things. L.A.'s on fire. You know, Trump's marching in. And, you know, COVID just happened. And it's like, we don't even remember these things. They just have. happened so fast. Like Trump was almost assassinated or whatever. It's like we just, it's hyper-normalization up the fucking wazoo. We don't even remember what happened last week. And I think that's on purpose. It's sort of like, this is the phase shift. We're seeing guys running into Davos and, you know, screaming about the free market and all this shit and they're cheering it on. And it's like, well, aren't these the commies? Like, what's going on? You know, this phase shift has happened so quickly. And I think the reason why is because we're moving to the deflationary age.

we're moving out of this debt-based system to this deflationary model. Bitcoin is very important. I really do think that. And so, you know, let's do it as slow as possible. You know, what's going to happen next with AI and drones and techno warfare? And, you know, financial warfare has really been the weapon of choice, you know, for a really long time. That will continue, but it's going to change. And we're going to see, you know, really wild things happen as AI, you know, grows up.

and, you know, cryptocurrency grows up. And I think there's a reason why the czar, David Sachs, is both, you know, because I think that they really do connect in a very interesting way. And, you know, we're going to see an opportunity for the U.S. Empire to extend, like, arguably for the next, like, 500 to 1,000 years because of what they do over the next 18 months. And that could very well be if they make Bitcoin the reserve asset of the world and are able to retain the dollar as the currency of the world, then they win. and that could be bad.

And I don't really believe in multipolarity anymore. I don't really believe in Russia and China. Because what did we learn at COVID? It was lockstep all across the fucking planet

for the most part, right? Coordinated central banking, interest rate lowering, currency debasement, and then you can talk about pharmaceuticals, but I don't even care about that shit anymore. It's like the financial thing

was really the interesting thing to me. And I think it's interesting that in fall of 2019, Trump's meeting with Larry Fink, and they instigate this going direct plan where they figure out how to print trillions of dollars and basically give it to BlackRock. And they rate out this whole plan before there's even a whisper of a virus or whatever. And then boom, the whole world, we crushed demand. If you really look at lockdowns as sort of a financial weapon, you know, and you look at the birth of the Bitcoin dollars sort of happening in that moment. and now we move forward, it's like, the U.S. Empire may have just won, like, for a really long time. So why do we have freedom advocates wanting to even increase those chances and accelerate those chances? I don't want that, frankly.

And I know people in the States, again, I sympathize for it, too, because he's fucking funny, I guess, but the Trump idea, you know, the Maga crew, it's like, I don't know, I just, I fear so much about the technocracy. that will come from this group of this like PayPal Pallanteer presidency. Trump is, or like Elon has moved into Mar-a-Lago. He's going to have a fucking, you know, office at the White House. Like, Bezos and Zuckerberg and Musk are going to be sitting at the inauguration together. Like, these are the baddies, you know, four years ago. And now there are fucking libertarian free market champions that are going to bring free speech and freedom to the world.

It's like they were the one censoring everybody. What are we doing? Who made more money on? of COVID than anyone. Those guys, Bezos fucking loved it. What are we doing? These guys embrace Bitcoin. The U.S. dollar inflates into Bitcoin. They become fucking trillionaires. You know, what the fuck? So, yeah, that's my impassioned rant about why I think it's... Yeah, thanks, man. I think it's just dangerous. And I don't have all the answers, you know, and that's why I'm so desperately searching for fucking anything I can find to hold onto.

because we are in this hyper-normalization news cycle. It's really hard. Everybody just forgot about COVID. No one talks about lockdowns or anything. And it's like, well, that was a big deal. Will there be any retribution for it or any discussion? Are we just going to move on and go buy Greenland and go by Mexico? And like, what the hell are we doing?

So I think it's worth like slow the brakes. Let's chill. Let's like breathe for a second. Bitcoin already hit 100K just like on this stuff. We have a lot of capital to play with. If you're really a dissonant and you're really an exit and build a person who believes the government isn't the solution, go find your own. It can be in technology. Technology is cool.

But let's slow things down and find what works for us and for the individual and build freedom tech. Because there's a lot of ways Bitcoin will monetize that doesn't increase freedom around the world. And I think we're accelerating that with the SBR. So that would be my rant. And I love the BPI guys. and I love David Bailey and I think Dennis Porter is a nice guy, you know, sure. I think the state level makes more sense than federal. But for the most part, I would say, like, think about what really are the second order

effects of what you're doing. And, you know, I spent a lot of time outside of the states. You know, I did some time in Europe and South America. And I really like, you know, bitcoiners that aren't Americans right now. Like, they're really my people because I think. they're able to sort of see through the the red, white, and blue shiny lights of, you know, a million dollar Bitcoin and all the stuff and really think about, well, that doesn't benefit me. So, you know, I really hope everybody just chills the fuck out and, you know, breathe a little bit

and enjoy the pump that's already happened and, you know, improve their lives on an individual level and know that Donald Trump is not your savior. And, you know, the government becoming a hedge fund is not, you know, this beautiful thing. It's like actually kind of. kind of scary. So yeah, that would be my rant on the SBR. This episode is brought to you by Kasa. For those of you out there who want to protect your Bitcoin, I want to tell you about Kasa, the leading Bitcoin self-custody solution. If you're serious about protecting your Bitcoin, then you need a rock-solid security plan, and Kasa gives you just that. With their multi-signisher security and key management services, Kasa makes it easier than ever to take control of your Bitcoin

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which is c-a-s-a-o. So the last thing I want to get on here, which is kind of a bit of a segue into your piece, is you put a tweet out a couple of days ago talking about the idea that Bitcoin was created by one of the intelligence agencies. Sure. Give us the deep down.

that because that's something that I've heard a lot and I give like an amount of credence to yeah for sure well I mean just to be very clear you know the first like eight words of that you know very long tweet thread were like if you can't possibly maybe imagine that it's possible that maybe you know it was essentially that that bitcoin came out of the intelligence silicon valley fintech arm of the united states uh you know then check out this thread. So the idea was sort of this, I don't know, it's become like blasphemy to talk about it. And it's funny, but like, you know, this Bitcoin dollar stuff really started me kind of just like having fun at Bitcoin meetups and talking about this stuff with people. And then, and then, you know, three years later or whatever, it's like a reality and this stuff is really happening.

So, but like, to me, it's like, how could you not have a discussion about that? I think it made sense years ago, and I think it makes even more sense as the U.S. government is just embracing it. And it's like, you know, it's a national security interest now of the United States that Bitcoin succeeds. That's weird. Why? If this is really competing with the U.S. dollar system, why would the U.S. like latch itself to Bitcoin even more at a, you know, legislative level and, you know, perhaps at like a new financial system? system level like a Bitcoin dollar situation. Why would they do this? Well, they knew that they were going to have to deal with this debt issue at some point. It's a little kind of crazy that it,

the fucking Halloween 2008 after the start of like the biggest, you know, volume wise anyway, the biggest debt crisis the U.S. has had yet. Obviously, each one just innately mathematically is bigger. because there's just more money. But, you know, we printed more money. It's funny. Now, it doesn't even compare to what we did in COVID stuff. It was like, oh, 300 billion dollars. Like, oh, no, this is, you know, now that's like.

It was like a week in COVID. Yeah, exactly. Like, you know, we shipped that off to Ukraine and Israel on a weekend or whatever. But, sorry, I'm not trying to demonetize you. But the, you know, the expansion of the debt system, you know, in 2008, really, you know, the U.S. government, well, let's roll it back. The setup is actually very similar to the COVID setup, right? We have this debt crisis, this financial issue that happens and a bunch of money needs to be printed, right as the parties are switching in the United States, which does this very funny thing. So in 2008, you know, we have Bush leaving and we have Obama coming in.

So the Democrats blame Bush and the Republicans blame Obama and there's really no, you know, no one really gets held accountable for it. And what actually happens, we bail out the banks and the citizens get hurt. And after it was the banks and the financial firms that were doing all of these collateralized debt obligations and basically tokenizing mortgages and trading them around and then, oh, shit, you know, the candle went the wrong way. and these firms blow up. There's also a lot of evidence that it was a controlled demolition, but regardless, they're speculating and it blows up. And then all of a sudden, this random guy comes out of nowhere and releases a white paper on the cypherpunk mailing list

right at the time where the U.S. is printing a bunch of money and the debt is becoming a runaway issue. It obviously wasn't an issue before, but that was really the start of the runaway issue where people noticed. That was Occupy Wall Street. Obama came out of Occupy, which is very funny.

No one really thinks about that, but there was a lot of civil unrest about what the banks and these asset managers and these funds did, and they were able to kind of transmute it into this new hope and change movement that was just more of the same shit. Obama got more bombs than Bush and blah, blah, blah,

here we are. But Bitcoin comes out of that, which I think is very interesting, the timing of it, right? And then, of course, it's this hyperinflationary currency that's meant for drug dealers and sex traffickers and whatever

the hell early Bitcoin is for. It's inflating at 50 Bitcoin every block. It's not the store of value thing. It's not really thought about that at all. Interestingly, as a personal note, I was working at a bar in San Francisco at that time. And in 2014, the guy that replaced Ross

and that was already after a halving, so it was down to 25, but the guy that replaced Ross Silk Road 2.0 was a regular at my bar, Blake menthol, and he taught me about Bitcoin. Literally, I didn't know that it could go up. He explained it to me that it was an anonymous digital currency that you could use to buy things online. And that's how I used it. And, you know, some blokes that I know put 50 Bitcoin up their nose and, you know, and here we are.

And I wasn't until 2017, after another halving, that I see a headline and I see that, oh, Bitcoin's crossed, you know, a thousand. You know, it was at the very, maybe the end of 2016 started 2017. You know, it had crossed a thousand again. And I was like, it can go up. Like, what do you? I had no idea that there was this value aspect. I don't know what I thought it was. But I didn't think that there was like a speculative, you know, use case for it because it was not really a good.

store of value instrument yet because it was still pretty and inflationary. But as the having cycles go on, 2017 was really the like kind of wake up moment of like, oh shit. You know, this thing can

increase in value. And suddenly the use case turned from being like an online currency to this store of value thing. Obviously I already explained the Bitcoin dollar six weeks before the relative issuance goes below gold and the dollar.

in 2020, but there really was this sort of change. And I think it's really interesting to like how, if you were the U.S. government, you know, what happened with the intelligence community? Well, you know, in the war and Operation Underworld was sort of the first merger of the intelligence state and like the mob because, you know, the U.S. needed intelligence on who was at the ports and who was in the waters, basically, back then when there weren't really satellites and data brokers and these things to get this information. So who do you go to?

Do you go to the fucking bootleggers, the traffickers, and the mob? Because they know. So there was this merger of the intelligence state, which is obviously, you know, she literally wrote the book on this, but One Nation under blackmail by Whitney Webb. You know, the book starts with Operation Underworld because it is the like perfect example of this. And once the intelligence community merged, you know, with the mob and begins to merge with Wall Street as well because, hey, financial information gives you a hell of an edge in financial markets and speculation of oil, commodities, currencies, all these things. So you begin to see finance

come into it. So now the intelligence community is just this fucking blob of, you know, sure, the desk agents that work at the CIA and pocket protector bros and crunching numbers of, you know, satellites and whatever. But now you're seeing this, you know, marriage to the mob into Wall Street. And as the microprocessor era begins, in the conductor era, and we're starting to see computers start to happen, and the network state kind of start to happen,

the intelligence community completely moves from being in an office at Langley or in the Pentagon, and it really moves into the private sector entirely because it's just way more advantageous for them to do that. They don't have to deal with, constitutional rights and spying on citizens. They're private companies. They can do whatever they want, you know, obviously for the most part. So the intelligence community moves entirely into Silicon Valley, into these banks.

And we start to see in the 70s this, you know, after DARPA is established in 58, and they create the primordial Internet stuff, we start to see, you know, this stuff is starting to come out of Silicon Valley in Palo Alto and San Jose. and that has all of these connections and money and funding and grants and all of these things coming out of the CIA and the NSA and DARPA. But going into academia, that's really where it started in the 70s. Intelligence really took over academia, which I wrote this piece about, the militarized data broker piece, that talks about this program called the Massive Digital Data Systems Program that was the CIA, NSA, and DARPA. and they integrated into the computer science programs at Stanford, Caltech, MIT, Harvard, and Carnegie Mellon. And you look at Stanford specifically.

When you say they integrated, what are they doing? Are they looking for talent or are they doing other things? Yeah, they're looking for talent, but I think more so, I mean, quite literally they put out this, and all this is unclassified, but they put out this briefing called the Birds of a Feather briefing in 93. sorry, the briefing was 95. MDDS, the massive digital data systems was 93. But the idea of the project was, hey, there is like this architecture that needs to be built that has a national security interest.

We understand where the internet is going. We created it. ARPA then became DARPA and the ARPA net came out of literally Eisenhower founded ARPA because Russia launched Sputnik into space and it had four radio. fucking antennas on it, and they went, oh, shit, they're beginning to, we need to go. So they found DARPA to basically compete. It came from this military angle, but as we found out, DARPA then, you know, basically infiltrates academia. And so they start this program where they distribute grants to basically build what they need for a modern digital data system,

as they literally call it massive digital data systems project. And so they did. distribute funding to academia, to colleges, as it's outlined in this Birds of a Feather briefing, that we want these people that appear separate to all move towards the same thing, this birds of a feather idea. And we want them to build the system that we want, you know, that we see basically taking over, you know, the global internet. And so they fund all of these grants and all of these projects. And, you know, we see, you know, direct funding from the NSA and the CIA and DARPA went to the Google boys who set up, you know, they used this grant that they got from this MDDS program

through the NSF, the National Science Foundation, and this idea that they were like, we need to build this architecture to achieve, this is literally from the paper, to achieve what the intelligence community hoped for. So they're like, these things are really complex and they require, you know, tons of amount of data. And we need to have all of these protocols that can query and index all of this data as we like build out the modern internet and the modern surveillance system that can be built on the internet.

So we need to, you know, find a way to query all of this and create searches and, you know, create a library on the internet. So two grants, literally, to Sergey Brin and Larry Page while at Stanford from the NSA, the CIA, and DARPA, and they bought computers for these guys, and they built Google through CIA and NSA and DARPA funding. Now, Google isn't literally a DARPA project. Google didn't literally come out of the government or the intelligence community, but it did, right? But it didn't because they were able to basically launder the direct connection through academia,

through this grant. And then when Google goes private and they incorporate, there's no actual direct connection, but all of the information and things that they built were encouraged, directly incentivized and funded by grants from the intelligence community. And then they go out and they build Google. Google was funded literally by Andy Bechlestein,

who was the funder of Sun Microsystems. Just to go back a second. Yeah, sure. They're pushing money into the private sector to build the tools they want. Well, first, it's first, Andy, they're putting it into academia to build, to create the concepts that then go into the private sector to be built. But is that because they want distance from those tools and they want it to appear like it's not just an intelligence asset? Or is it because they just think the private sector is going to do a better job of building those tools?

Well, it's a bit of the commercialization for these products. Like they saw that Google had a commercial aspect. But like you look at, you know, the top seven or so. eight stocks in the in the US right now like what is the American economy it's these projects it's Google it's alphabet it's Amazon Jeff Bezos's dad a grandfather

was one of the co-founders of ARPA you know you look at these huge companies Tesla SpaceX you know Facebook right these are like you know invidia you know these basically are the US economy

and they have all these direct connections that you know the the mechanics and the protocol and the infrastructure came out of basically DARPA projects. So I think the reason why they did it was multi-step. I think there was a commercialization aspect that they thought was really important, that they were like, hey, we can do this better in the private sector. But I also think there was some wandering of like where the, you know, I think people would be really apprehensive about giving all of their information to Google if they knew it was a DARPA project.

project, right? Would we be using Gmail if we were like, oh, this came out of the Pentagon? No, probably not. But if they do it through the guys at Sun Microsystems, Sun, they were basically the foil to, they're kind of not talked about very much, which is weird. But Microsoft went PC. They did the personal computer around the same time. And then Sun did all the network stuff. So Sun was like, hey, we actually think the future is not personal computation. It's going to be network computation. You're not even going to do computation on your computer at home. You're going to connect to some sort of network and the computation will be done elsewhere. Very ahead of its time, very smart. But the sun and sun microsystem stands for Stanford University Network. So they were all Stanford guys that were connected to this project. Andy Becklestime was the seed funder of Google, along with this guy, David Sheraton, these two guys. They gave Sergey Brin and Larry, technically, first money, I think it was like $100K each, and then they go and form Google. Eric Schmidt, who becomes the kind of famous CEO of Google, was the former CTO of Sun Microsystems. So they build all of the, you know, kind of more important than building the personal computer is building the infrastructure, the hardware, the Ethernet stuff like for the internet. And these guys built that with influence, you know, directly from the intelligence community.

And I think this idea of this birds of a feather briefing was to sort of be like, hey, we want, this is where we want to go. We know this is the future. So how do we get there? If we just come out and say DARPA is building the internet and we're doing this and it's from the U.S. military and we're going to create search engines and email and video streaming and an internet library, no one's going to touch that shit. Of course not because they're trained to know, okay, military bad and tell us.

community bad. I'm not going to put any personal information in Google or whatever. But by doing it in this way, they're able to build out these things with government funding, knowing that it's of national security to be ahead of basically the whole technical community of the earth, but do it in a way that makes it seem like, oh, these young guys just came up with this cool idea, and then Google came out, and it's so fun, and they have ping pong tables, and they have like chefs and it's like so fun. It's like no, these are like heavily important national security companies to the United States. And I think an interesting angle of that is Facebook, right? I mean, this was a really interesting part of the piece to me because it hadn't clicked

me in this way before. But I know there were social media sites before Facebook, but Facebook was probably the first one where, I mean, what, 80% of the world or something crazy like that's on Facebook and everyone's put in a ton of personal information and you're trying to pull a tie between that and again intelligence agencies. And the really interesting one in there with me, so I didn't know very much about Sean Parker at all. I thought he was like this cypherpunk guy who created Napster. I never used Napster. I used things like line wire and Khazar and I always thought he was this like cool guy. But you, in the piece, right, that he got his first, was it a CIA project when he was 16. Well, this is what's so funny is he probably was this.

cool guy. He was just this kid who was hacking into banking systems and doing all of this fun stuff when he was like 14, 15 years old. That's cool, right? But the CIA knocks on his door and they're like, hey, we, you know, hacking is kind of this amazing recruitment

outlet for intelligence agencies because it's like you fucking hack into this thing. You know, that pings up all of these red alerts and all these systems and they come and knock on your door and that's literally what happened with Sean Parker. and yeah, he had his first contact with the CIA at 16, and he literally wasn't even finishing his senior year of high school when he was just working for intelligence firms and coding things.

And I think another really interesting thing about, and I don't even talk about this in the piece, but imagine you want to build a surveillance system. You want to build a panopticon using the internet. A technical chokehold of that would be if you weren't exchanging files or streaming or doing anything online, but you had a microphone in your computer that was recording you and broadcasting everything to the Pentagon, you would be able to see that traffic on the internet.

You would be able to see those packets being sent, and you would be like, why do I have an upload of 8 gigabytes or whatever from my laptop over the last 8 months? That's very strange. But if you create peer-to-peer file transfer networks, you know, BitTorrent, which was Bram Cohen, which worked on this idea of swarming that was actually invented by Jed McCaleb, who founded Mount Gawkes and Stellar and a bunch of other things. But he came up with this idea with E. Donkey 2000. You actually have to create a lot of data being moved around on the internet

to basically launder and hide surveillance data being sent around on the fiber optic cables and the satellites and the broadband of the internet. So it's kind of funny that they catch this guy, you know, hacking. and then they basically groom him and bring him into the intelligence community. And then he comes out and creates Napster, which before Napster, there was basically no peer-to-peer connectivity at all. And then, you know, they work on this way to compress sound into these, you know, it was a data compression algorithm first and foremost.

That's what MP3 was. And then they were able to send files back and forth. And then, you know, we get Kazan and everything else. And then it's movies. And then it gets to BitTorrent. And BitTorin is like over 50% of what. web traffic. I mean, it's something crazy like that. It's just everybody is

sending all of these things peer to peer. So now, all of a sudden, it's really hard to tell what data is coming from your devices and what your internet service provider is. So do you believe that's happening, though? Yeah. It's like laundering other information. Yeah, of course. 100%. I think we learned a lot in the Snowden leaks

through this project muscular and project prism of, you know, so basically what we found in these two projects that's so disturbing to me is I actually I'm sorry everybody, I forget which one is which, but there's Prism and Muscular and M-U-S-C-L-R. And one of them is a project that says the Yahoo and Google and these data brokers basically have a direct contact with the NSA. And if the NSA needs any information on anyone, they can just send, you know, they don't need a warrant and they can just send a request to Yahoo or Google and they will send information back on the user.

So they've established that there's this way that if they want to go get information on you, they can go talk to these big companies, Facebook, and they can get the information right back. But the other side of the leak was they're actually directly taking information in packet form from fiber optic cables before they even get to the data brokers. So they have an ability to warrantlessly take your information from data brokers, but there's a paper trail. But they can just glean that very same information directly from the past. packets coming in the fiber optic cables, and they elect to do that instead.

Well, why? Well, because there's no paper trail. So they've already created this axiom where you can see why intelligence, you know, operatives don't want to have any sort of, they don't want to, you know, have a paper trail where they're maybe pushing constitutional, you know, buttons that they don't want to push. But if they just take data packets directly from the source, you know, so it's interesting that they have both of these programs. But one is a lot scarier than the other. We all kind of know that if law enforcement wants to work with Google or Apple or Facebook,

there's things that they can get from these private companies. But it's very scary to me that intelligence is just peeling packets directly from the spigot and being able to do their own heuristic analysis on it. Directly, that to me is much scarier. But none of that would all be very easy to see if there wasn't massive amounts of data being thrown around. So you kind of need file sharing to sort of be, you know, being a huge part of the internet for that to work. And it's interesting that Sean Parker, you know, was connected to, you know, he was the one that connected Peter Thiel, you know,

who was the first serious investor in Facebook to Zuckerberg because he already is super, you know, dabbed up with the intelligence community. His handler basically is this guy Ron Conway, who runs SV Angel, who's all over the crypto space. But he was also a big early investor there. And the thing with Facebook is really crazy is that it came out of an MDDS University, the same massive digital data systems program. There's no direct ties that Facebook was actually given any grants from this, but Harvard was in this program.

And Facebook, if you really look at it, like, it's the first digital ID. It really was the first system that's set up, but we built it. That's the thing that's so fucked up. There's no, no one needs a warrant if you're literally posting a picture of your face and where you are and what you're doing and how tall you are and what your religion is and who your friends are. And you're literally tagging their fucking face in a box so the AI can then scan and learn, you know, like where they're going. They know where we're going kind of decades in advance. And I don't know exactly who they is, but intelligence communities know where they want us to go. This birds of a feather concept.

So they build these systems that incentivize us to give them the things that they want. And Facebook, very interestingly, it was founded officially the day that this DARPA program shuttered, the exact same day, which is called LifeLog. And the architect and project manager at DARPA at that project worked with Facebook. So anyway, sorry. This episode is brought to you by Ledger. If you're serious about protecting your Bitcoin, Ledger has the solution you need. Their hardware wallets give you complete control over your private keys,

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Sorry, I interrupt you there, but I want to jump in because this was a really interesting tie to me because like you say in the piece, it was launched the day that Life Log closed down. And it feels like you're kind of hinting at some Zuckerberg involvement with the intelligence community,

and I want to know what you're trying to hint out there. Well, you know, if you want to create basically this financial system that's online, and you want to create this sort of technocracy, Panopticon kind of system and extend U.S. Empire, understanding we have debt problems, but we have a huge technological advantage. You know, how do you get people to onboard themselves onto the system?

You create something with Facebook where you create this exclusivity, you know, using literally like EDU emails. And it was really cool to be on Facebook. Like, I mean, you know me. I'm, you know, tinfoil hat all the way, but I had a Facebook. I haven't had it for over a decade and deleted the shit out of it, but I put a lot of shit out there.

There's a lot of information. You can find pictures of my grandmother's face on there and all these things, right? I did the whole shebang. You create all of these networks of webs, of friends, of what they're into and all this stuff. And like, we really built that.

If you know artificial intelligence is coming, you know that a digital system is coming where you need ID. How do you basically manufacture consent for it. You build this hip, fun, exclusive thing aimed at the next generation of ever online people. You can't, again,

if the fucking Pentagon came out and said, we're starting a social network, we would all laugh and not do it. But if they create this really awesome narrative of this really nerdy guy who does this thing, and then we all go see the social network, and we're like, oh my God,

like the nine inch nails guide to the soundtrack, and it's so cool. But it's like, it's kind of horseshit. And it's not really real, but they've manufactured this unbelievable dialectic for us to give all of our information away to the public. They don't need warrants to build all of these things. And they can, you know, the user base of Facebook is insane. You know, that was really the thing that got brought up during the Libra hearings when Facebook went to start its own digital currency with David Marcus, who now is doing light spark. You know, the big issue was like, you know, we don't really care about all these.

alt coins. We don't really give a shit. There's no network effect. And we know no one can compete with the network effect of the dollar. But Facebook has so many active users every month that you actually kind of could compete with us. It's a payment system. And that's actually scary to us. Again, so they claim. And so Facebook, you know, I think you could argue in a lot of ways. There's so many connections to the intelligence community there. And what is actually the outcome of Facebook? it's basically manufactured consent for the first digital ID, which is just an absolute necessity for the coming digital economy.

So we're not really that, you know, how do people sign into websites? They use their Google ID. They use their Facebook ID. Maybe they even use PayPal, you know, for paying for things. And it's like we've really centralized our ID to these like really specific Silicon Valley-based fintech companies that all actually do have direct ties to the surveillance state. I think it's a little concerning.

And again, again, you could argue, I think it's decently clear that there's a military origin to Facebook. There's an amazing Whitney web piece about that called the military origins of Facebook. That really breaks a lot of this stuff down even further. But you look at what Pallantier is. It's basically the modern CIA. There's this really funny Reddit asking me anything with Peter Thiel, where they ask, like, is Pallentier, you know, like a CIA front? And he responded, no, the CIA is a front for Pallantir.

Of course, he's being kind of tongue in cheek. But like, you know, they really are the modern data broker, you know, of the world. And they can do so much more as a private sector entity than they ever could as a public sector. And you look at the founding of Pallenteer, it started in PayPal. It was the anti-fraud algorithm at PayPal. When you make digital money, which they were really the first people to do it successfully in any way, the biggest issues are mitigating fraud on your systems. So Max Levton, who was the CTO of PayPal, spent all this time coming up with CAPTCHA and these different tests. The first commercial application for CAPTCHA was PayPal and all these ways to mitigate fraud. Then it became incredibly complex and they're using all these modeling systems to figure out who's, you know, who's,

who's committing fraud and who's not, because that was their only loss. It was just printing money other than fraud, and it became this huge problem. Infamously, there was this Russian fraudster who just kept tickling their nuts named Igor. And so they named the anti-fraud algorithm after him, and they finally kind of defeated his criminal activity. But in the process, they had created this really robust anti-fraud algorithm. So Teal then works with Alex Karp and is literally mentored by John Pondexter, who is a DARPA employee who's running this program called Total Information Awareness, which had kind of come out of a lot of, it came out of sort of Patriot Act era post 9-11. They ended up rebranding to terrorist information awareness because they were trying to really play that. Well, it's okay if we're spying a terrorist, right?

but they knew that they wouldn't be able to do this DARPA project. So they basically took the IGOR algorithm and made a privatized cutout of TIA that was literally directly advised, monitored, or sorry, I keep saying that, mentored by the guy that was leading the TIA at DARPA. And the first investors of Palantir was in QTEL, was the CIA, and they were their first customers for a super long. time. Now they kind of do like everything, you know, they do all intelligence people and, you know, every branch of the U.S. government, you know, sort of has some connection to Palantir now. It's

kind of insane. They even have a Palantir metropolis, which is like hedge funds and banks. And, you know, there was this really cool quote that I found from The Guardian that's like Palantir does not just provide the Pentagon with a machine for global surveillance and the data efficient fighting of war. It runs Wall Street, too, which is really insane of a quote. I put that quote in my prep. Oh yeah, fuck yeah, dude. Yeah, it's wild. But Pallantir really was, it's the most clear paper trail of, you know, a privatized version of a DARPA project getting pushed out because there was direct scrutiny from people in the government pushing back on this totally insane project, total information awareness. Like, what are we talking about?

Even, even like, you know, adversarial, you know, senators could look at that and be like, something's wrong. here. And they attempted to rebrand with this whole terrorist thing, but they knew something was wrong. But if we give it a funny name from the Lord of the Rings and we push it into the private sector, it'll be totally fine. And then, you know, Teal takes over and, you know, put some money in with Founders Fund, who Sean Parker later joined, Teal's firm Founders Fund. And you see this sort of privatization of the data brokers that were used to be directly at the DARPA and at the DOD, at the Pentagon, at the CIA, at the NSA, and you just see them, the tentacles sort of spread out into Silicon Valley and into the private sector for like basically every reason.

They can now sell stock of it. They can make a ton of money. They don't have to worry about constitutional, you know, pushbacks of what a public sector company can do versus a private. There's a ton of reasons why they would want to do this. And then again, I think this question started of Bitcoin companies. from intelligence. But you know, you start to see, well, what's the outcome? And the outcome now is that the U.S. private sector is so far ahead of everybody else in the world from a software and,

frankly, a hardware standpoint, even though a lot of it gets made outside of the U.S. It's like patented and made by, you know, U.S. engineers, basically. And we see this huge technological edge and advantage as we're entering the AI era. You want to have a very, you know, useful AI models, you need to feed it real data. When you feed AI stuff generated from AI, it literally creates a feedback of just garbage. It's just, it can't learn against itself. It needs human information to learn. And so how do you create a cache big enough for the AI to learn? Well, you fucking surveil everybody, and then you incentivize everybody to upload pictures of the grandma, and then tag the little facial part or whatever, and all these photos.

and then they can triangulate everything, and then they can kind of feed their things. So it's a little scary when you present it that way, right? It's very scary. Right. But when you present it as like, oh, look at this fucking Zuckerberg guy, he's so cool and this and he started this company.

It's like fun and it's easy and no one really, no red flags pop up. But when you look at this MDDS program and you look at all these things, you see the outcome. You can see why the U.S. government did it. Now we go back to the first question you asked, I think 45 minutes ago.

did Bitcoin come out of the U.S. intelligence state? Well, now we've kind of described what the U.S. intelligence state is. It's a fucking mess. It's a mess, a private sector of grants for academic, and it's a shit show of what it actually is. Well, Bitcoin probably came out of that. Does that mean it directly came out of a dossier written by someone at the Pentagon? I don't think so.

But did it probably come out of the fintech scene in northern California? extremely likely. And when you look at the early Bitcoin scene, you see so many connections to PayPal and that PayPal group. You see that group embracing Bitcoin in a huge way and ready to take advantage of the incoming Bitcoin system. And quite literally,

the first motto of PayPal was a new world currency. And as David Sachs said in an interview in 2017, he said, where PayPal failed at creating a new world currency, Bitcoin succeeded, which I think is very telling. There's also this great book, Digital Gold by Nathaniel Popper. And in that book, there's a Vorhe's quote where he talks about,

my pet theory for Satoshi was that it was created at this fintech firm when they were asked to go make a digital currency. And then basically the management of the company was like, this is way too crazy. We can't release this. We have to do it anonymously. And then they did. And then when you see the way that PayPal was basically

sucked up by the intelligence state. As Levchen says, specifically, when I was making the algorithms at PayPal, I worked with every three-and-four-letter agency, and it was some of the most fruitful business relationships I ever had. He really controversially said that on Charlie Rose and was very upset that people were pissy about the NSA, you know, post-9-11 spying on people. He was like, no, the NSA's sick. Like, they protect us.

Like, why would we not want to work with them? I applied for the NSA and they wouldn't let me work for them because I wasn't a citizen yet. And when I applied for them, they told me you'll never make a money doing this. If you're here to apply cryptography for the benefit of the United States, don't do it in the public sector. You'll never make a dime. Then he goes, gets sent to Northern California, meets Peter Thiel. They fund PayPal after breakfast. David Sachs joins the incoming Cryptozar. Teal then basically takes over the CIA. And here we are. Right. So I think that there's a lot of connections. You could see the dialectic, basically, of how do we launder where this stuff is coming

from? How do we launder who gets to take advantage of it? We'll set it all up as this, oh, it's this fraudulent system for criminals and all this stuff, but then 14 years later, it's of a national security. It's kind of similar to what Tether did. Oh, it's Chinese paper. It's fraud. It's this. Oh, wait, actually now it's the biggest buyer of U.S. debt. Extremely similar, you start to look at all these PayPal ties and this sort of I call it the San Jose project.

And you begin to see sort of a through line of maybe there's something to this blob, but, you know, I'm just a guy with an internet account. Like, I don't know. And I'm just untangling this stuff myself.

And I don't even know if it really matters. Does it matter if you know, it came out of U.S. government. I don't know. It is what it is, right? It is I think it's clearly an invention, not a discovery, but it also is the math, it is what it is.

At the end of the day, it's a very active game. And if it was the U.S., they had to have been really damn sure about being able to control it's a misnomer to say Bitcoin is decentralized from a

consensus standpoint in the sense that really what does is distribute consensus to the layers that Bitcoin consensus has run on. So that's hardware, you know, internet service providers. You know, there's these kind of choke points at which, well, if the U.S. government or some entity owned every ISP in the world, then there would be choke points of if this thing was really, you know, a permissionless system. If someone owned all of the, you know, silicon production in the world, then you couldn't make chips or make hard drives or processors, you know, without going through one company, then it doesn't really matter that, you know, there's this distributed consensus because the thing that runs the

distributed consensus is centralized, right? I don't think that's the case. I don't think we're at that point. But the U.S., you know, if they did put this out, if it was a government intelligence operation, they were extremely confident that they would be able to control the Pandora's box that got open. So I think that is... of concern a little bit if you do decide to choose this narrative. I would like people

to consider all of these things but then think about what they can fucking do about it. And again, I go back to Bitcoin has been amazing to me. It's given me an amazing opportunity and I don't care if it was literally created at a meeting in the Pentagon

because what it did for my life has been very good and I know that I can through the right education. and things give that same opportunity to my brothers or, you know, children or whatever, right? So there's a great opportunity regardless of its incubation. What's more important is where it's going? And so to tie this all back into SBR and the tetherification and dollarization of Bitcoin, it's like, where are we going?

Where is Bitcoin going? We should be really aware of where it's going and really careful about where it's going. and really careful about where we push it. Because number go up is not just the end game here. There's so many other pieces that are so much more important. Like money is a means to an end. Yeah, it's cool to have more means for more ends. But really, money should be something that gives you your time back

and it gives you freedom to be able to go live life. Yeah, you could be a billionaire and you spend 23 hours a day staring at a chart. That's a shitty life. What's the fucking point of that? you know go go do stupid things go eat mushrooms go do some bullshit thing and buy a pool and and and have a party and do whatever the fuck it is you know use your use your bitcoin and your funds to do fun stuff buy a mountain bike go fly to fucking Cambodia like I don't know go do shit go see the world I don't think humans were like meant to just be these hyper speculative 8000

monitors around them and trading fart coin doing all this stuff bitcoiners are no better than that when they do that same thing there's no There's no just like, it's not this transmutation thing that makes you a better person because you made a million dollars off Bitcoin versus the guy that made a million off XRP. It's the same fucking thing if we allow it to go to the same place, which is that it's just a speculation tool and it doesn't bring freedom to the world in a way. There's no difference. So let's just be careful of where it's going. And, you know, let's try to increase accessibility to UTXO ownership and, you know, maybe think about some scalability. stuff and let's reject the dollar because we have a chance here.

That's the fun thing about this is we do have a chance to attack the dollar system here and minimize this chokehold that the U.S. Empire has on the world. So why would we encourage the opposite when we have a chance? If the bee shows you its neck, you fucking better not miss. And right now, not only are we missing, we're like, hey, hey, hey, over here. I'm over here with the fucking javelin. And like, look at me and it's going to eat us. You know, so let's not get eaten.

You know, let's fucking stab it in the neck. I can't think of a better way to end this, Mark. That was fucking brilliant. I hope a lot of people listen to this and pay attention. Where do you want to send anyone before we close out? Yeah, sure. You know, I'm kind of just floating around a little bit right now. I'm working on this chain series turning it into a book with my co-author, Whitney Webb.

And right now I'm working, writing for her website on Libid and Hangout. So this piece, the data broker piece, will be out tomorrow, or rather, I think today, depending on where you are in the future watching this. But yeah, Unlimited Hangout, and then I'm on Twitter at Mark Good W underscore IN. Yeah, stay free. Appreciate you, Mark. That was great. Thank you.