You're The Voice | by Efrat Fenigson - Ep. 62: Roger Huang - How Bitcoin Challenges State Control & Surveillance

Starting point is 00:00:00 So for me, coming from China, being so aware of the consequences of digital surveillance, I got the sense that Bitcoin might be part of a solution. There were several people who were arrested for tweeting, you know, for very small amount of followers. So imagine you're tweeting to 40, 50 followers. It's so important that you have that potential to have your transactions be private, censorship proof, being able to transmit value between ourselves, peer-to-peer just like the internet should be so there are some crazy things that yeah people think that it's happening only in china but the west is really mimicking a lot of that and also other countries in in the east i know we have this like china's dystopian and all these things but we see

Starting point is 00:00:44 some of these tactics being used now in the west and places that we think to be free Hello and welcome to the second day of Bitcoin Amsterdam and to another episode of You're the Voice. I'm Efrat. Thanks for being with me once again. I have a great pleasure of being here today with Roger Huang. Hi, Roger. How are you? Hey, Efrat. It's great to be on You're the Voice. Excellent. Thanks for accepting my invitation. I'm very excited for this talk. We're going to cover, I think, quite a lot of ground and I have a lot of questions for you. The work you've been doing is excellent. I've been following it for a while.

Starting point is 00:01:34 And so just for my audience that doesn't know you, I'm going to do a short intro and then we'll dive into the questions. So Roger Huang is the author of this book, a book on Bitcoin plus China, which is would mao hold bitcoin that's the name of the book and this is going to be my copy i hope um and is one of the first writers in 2014 to write about the intersection of bitcoin in remittance payments and drug policy with venture beat and tech crunch roger covers bitcoin and different stories where it intersects with geopolitics economics and history and has covered topics such as the digital yuan which is also called the ecny internet censorship the relationship between bitcoin and dissidents and businesses and governments adopting bitcoin

Starting point is 00:02:26 you're covering quite a bit of uh landscape there and it's all like related to china right like most of your work not not just no not just yeah i've written about like for example the nigerian okay protest yes uh i think my one of my last articles was about uh telegram and uh how simply bitcoin was taken down right right right so some a little bit more you cover more okay so can you take us back a bit to your background introduce us to how you started where you came from what did you do as you were growing up yeah i mean um so i was born in china but grew up mostly in Canada, but I would go back and forth between China and Canada very often because my family was always in China. And growing up, I studied economics, which is probably a bad idea in

Starting point is 00:03:17 hindsight, but it did lead me to some interesting places. And one of those places was the startup scene in Montreal. It was really interesting. I didn't know it at the time, but Blockstream was kind of founded uh in montreal and i actually met adam back randomly he was just like putting up tinfoil and uh this like startup co-working hub and stuff like that and uh so there was a bit there was a bunch of bitcoin activity in montreal um and i was just intrigued and so in 2014 i started writing about some of the people uh in montreal uh who are building different things um and then also just starting to grapple with bitcoin i tend to uh write about things i want to learn more about and bitcoin is definitely one of those topics um and so since then what got you

Starting point is 00:04:07 interested why why did you want to learn more about it yeah um it's a good question uh i think it's actually taken me a long time to really develop this through but at the beginning it was definitely the fact that it separated uh state and money um so for me coming from china like just being so aware of the consequences of digital surveillance so we would have like meetups. And, uh, I used to do, um, 10 men commemorations and there would be diaspora members and also people from the mainland that would cover their faces even as early as a decade ago. Yeah. Cause they were so afraid that people were going to take photos and identify them. Wow. Yeah. So I, you know, I got the sense, um, you know, a little spidey sense that, um,

Starting point is 00:04:53 bitcoin might be part of a solution to helping people and i think a lot of the goes the book goes into it a little bit more but i think a lot of chinese people think that way as well because you know china is a state that's so strong and has so many digital surveillance kind of measures uh having tools that can help you you know express yourself and express how you want to spend money and how you want to save your money i think is so critical so that's kind of like where it started but i've been down the rabbit hole since and um like you mentioned it's a lot of different topics a lot of different things um but that's kind of some of the richness of bitcoin um and i would say i've also not just covered bitcoin i've also covered some

Starting point is 00:05:37 of the end-to-end encryption uh i interviewed um like uh bart pernil for chat control for example So he's a European cryptographer who's very against chat control. And so any threat to end-to-end encryption or broader threats to internet freedom, for example, censorships during massacres that we saw in Bangladesh, those I've also written about as well. Wow. Yeah. So most of your work is around writing and covering things. I mean, you studied economics, but you decided that you're going to be a writer finally, right? Yeah.

Starting point is 00:06:13 Well, it's funny because in- It's led you there? Well, in economics, they do teach you how to write, at least. So the way I write is kind of informed by my McGill education. But the problem is that, you know, economics, I think, teaches you to be precisely wrong. And so, you know, if you take in too much of the Kool-Aid, you know, you might make some wrong conclusions, right? Having said that, McGill was a really interesting school for economics because we had professors who were a bit kind of all over the place audiologically. And so that allowed a little bit more opportunity than your standard, like, here's a Keynesian kind of like workbook. And how do you work through that? But, you know, you had to write these essays. My favorite classes were always like, for example, Japanese economics, which involved writing about the history as well as the economics of Japan.

Starting point is 00:07:06 So stuff like that was always really interesting. I wrote like a little mini essay thesis about like the Asian financial crisis and stuff like that. So that's kind of like where that came from. But really what happened at McGill was the beginning of my kind of search as well, my disillusionment with the current financial system. right um because you sense that something was off exactly and we learned about things like uh i remember i was so pissed so mad when uh libor uh which is like the london inter offering bank rate which is a private rate that basically a lot of debt is founded on uh it's a reference rate that other banks and kind of central banks kind of look at all the time and it turns out a bunch of london bankers were just like rigging that it was a big big scandal back in the day i don't know how many people remember but the people who studied economics since 2010. Definitely remember that. And that was the beginning of me being like, I think this

Starting point is 00:07:59 whole system is filled with crooks. And since then, I've been writing and kind of presenting on that theme for the entire time. You're the Voice is brought to you by Trezor, the original Bitcoin hardware wallet company pioneering the development of self-custody for crypto assets since 2013, empowering individuals with an open source device, enabling beginners and experts to easily and securely hold their coins. I find my Trezor super easy to use and recommend it to my friends and family. Enjoy my 5% discount on Trezor products by clicking the link in the show notes and using the code FLAT. Okay, so taking you to your writing about Mao and Woody Holt Bitcoin, I want to quote something that you wrote here. In more recent history, in the early 20th century,

Starting point is 00:08:51 inflation would lead to the end of the nationalist project in China with frustration over carrying clumps of useless notes in wheelbarrows is it literal wheelbarrows yeah they had literal wheelbarrows whoa somehow leading in part to the rise of Mao Zedong and the communist project Mao's inner circle called inflation the scourge of capitalism and turned to organized force to tame the rising cost of living yeah can you share a bit about that what happened around that time like what are you covering in the book around that yeah yeah it's a great place to start so the book um people might say hey it's bitcoin in china so why aren't you starting in like 2010 but my book actually starts uh really throughout the sweep of chinese monetary history and really gets sharper

Starting point is 00:09:43 and sharper as we go from 1940s uh all the way into the 1980s yes right um and so the first part of that paragraph is really referring to a period of chinese history that most people don't know um people i think in the uh i guess in the west you can say they always have weimar germany yes and that's kind of the reference point yes but in china there also was in nationalist china after the war, because of different reasons, there's corruption, infighting. I don't want to say inflation was the only reason why the government fell, but there was rampant inflation. So one of the presentations I give, I have got this great photo and it's of this girl and she's holding the equivalent of 10 US dollars at the time. And it was 444,000 Chinese yuan.

Starting point is 00:10:31 Yeah. Yeah. So there was a crazy amount of inflation as the nationalist government just like lost control of the money supply. You know, China was just devastated after the war and the communist government kind of came about partially because there was so much disillusionment about the economics of the situation. Right. So Mao was always aware of that and they implemented, I mean, their way, Mao's way of solving it though, you know, being a communist dictator, we'll do this to you we'll make you think in this way but he basically enforced these quotas on prices so during the Maoist regime you know prices didn't really move at all right because the government enforced it but you know when we talk about government enforcement we're talking about

Starting point is 00:11:19 the whole legacy of history Mao did in order to implement his version of economics right right and the consequences that were super stark for the Chinese people you know starting from the land reforms with tons of people being killed, uh, all the way up to, you know, and I talk about in the book, the great Chinese famine, the cultural revolution where millions died because, you know, the Chinese people were instructed to go and make pig iron in order to exceed the United States and, uh, the United Kingdom in terms of industrial capacity. Right. So this has had severe consequences with Chinese people. Uh, but during that period, uh, prices were relatively stable, but Mao used government force, Mao used military force. One of his most famous quotes was

Starting point is 00:12:04 power comes from the barrel of a gun, right? And then the other was that essentially to sum it up, he believed that politics was the foundation of everything, that there is no independent art or anything else. So that is sadly the history of China in that period. I do think that it helps understand a little bit of how modern China is now and can help explain, as i go into a little bit later in the book why some chinese people have thought this is like such a magical idea you know the idea of separating money and state from a country where money was paper money was first invented where there's so many cycles of inflation where government force has been implied for so long where you can even argue that it's the most stateful country you know

Starting point is 00:12:50 when it comes to its money right the most controlled uh the strongest economy the most controls right um that created a pathway for chinese people not the government but chinese people some of them to understand the importance and the magic of bitcoin wow okay i have um a lot of follow-up questions let me see if i have another quote here that i want to yeah i want to take you into one can argue that the struggle over inflation has defined the last millennia of chinese politics that's a that's a very interesting statement to make um people may think that they can attribute it to other things but it can really just be the inflation and the fact that they wanted to control the money inflation has always been a factor in chinese history because china was one of the first

Starting point is 00:13:43 societies to have paper money credit money uh there was commodity backed money but for example the people, did people remember Ganges Khan, right? Fun fact about Ganges Khan. I think one in seven, don't quote me on this exactly, but one in seven Asian men traces heritage still to that day. So very busy man who created, very busy, who created a worldwide kind of empire almost at the time, Euro Asia. It was the first kind of, they call it the Pax Mongolica, the Mongolian peace. um and the yuan dynasty was kind of the chinese uh part of that uh empire which stretched all the way from western uh from parts of europe into the deep parts of asia right um and uh because they let the paper money supply run without constraint there began to be inflation

Starting point is 00:14:33 and the yuan dynasty was replaced for a number of reasons but inflation was there as well we just talked about how the nationalist government you know one of the factors was inflation. And one of the facts that I'd like to bring up, because Tiananmen Square is censored politically in China. You can't talk about it in the mainland. You can't have physical commemorations. There are a group of Tiananmen mothers, they're called, which are mothers of the victims that died. And they're always either held under house arrest during the dates. Seriously? Yes, because the Chinese government is very sensitive within the mainland to commemorations and that has extended into hong kong they have arrested the organizer of what

Starting point is 00:15:13 used to be the largest rallies for uh tiananmen square that was within kind of you could argue the broader china region although i also have my own opinions about hong kong but um you know tiananmen one of the things that people don't realize and one of the reasons why i think you can't have a complete uh understanding of china without understanding tiananmen is that there was inflation that proceeded before that. And that not only led to some discontent and some of the reasons why protesters came about. The Tiananmen protests were really scary to the Chinese party state because it was the students, but also because the average citizen, people from the city, farmers, teachers, you know, they came out in support of the students. So that was a

Starting point is 00:16:00 really scary part and for them you know there were protests around economic discontent as well as of course freedom of the press yes other kind of reasons yes the other thing is that modern china now is shaped by a faction that believes in giving some economic freedoms this is where we have this confusing like is china socialist is china capitalist like of course there are chinese companies yeah chinese companies listed on stock equities right so that seems confusing at first But the beginnings of that China really come about in the 1980s after Mao died in 1976. And you had the rise of Deng Xiaoping, who believed in economic reforms. But he had, there was a faction of leaders that also believed in political reforms.

Starting point is 00:16:46 You know, one of them, Fu Yaobang, actually said that there is nothing that modern China can learn from Mao. So I think it's such a powerful quote for a Chinese leader to say. And he was general secretary, which would have been the most powerful role in China at the time, except Deng Xiaoping was kind of behind the scenes. But Hu Yaobang died. And then Tiananmen Square, one of his most powerful acolytes with Zhao Ziyang, who was premier at the time. And he also kind of lost his career because he came out and tried to support the students. So Tiananmen was not only, you know, another flashpoint in Chinese history with this hidden factor of inflation. Right. But it also was the ending of a faction of Chinese politicians that believed it could be possible to give the Chinese people more freedoms along with economic freedom.

Starting point is 00:17:41 So political freedom along with economic freedom. And sadly, because the crackdown on Tiananmen was endorsed by the hardline faction, the conservative faction, they were the ones who won out. And the party took from that the conclusion that the state should always have tight control over politics, even if some ground could be seeded in economics. and let's take it back to today so not bad forward to today so how does the state views human rights today in china and and what kind of political and economical powers does it inflict on the citizens yeah i mean china is a very advanced surveillance state um with very very very tight controls on people it enforces all sorts of laws that you know i i think frankly the average person outside of china can't even really comprehend um so normally i tell a couple stories you know just to get into it please um and so there was someone i uh that there were

Starting point is 00:18:42 several people who were arrested for tweeting yes you know for very small amount of followers so imagine you're tweeting to 40 50 followers broad and twitter and x or whatever it's called these days technically banned in china you know you're only able to access it with a vpn and so the authorities are so sensitive. They've arrested people for posting. Wow. Um, we, I used to be part of this thing called clubhouse. I don't know. Yeah. I remember clubhouse clubhouse. Yeah. A lot of the people who've done podcasts, I feel like it's kind of a, a ground of sorts. So clubhouse is kind of this like social audio rooms and space and stuff like that. So I headed up the largest room on China and English. Uh, although we also had Mandarin and Cantonese translations of some

Starting point is 00:19:24 rooms. And we would have people come in and it was really vibrant. We had Uyghurs who had lost family members. Their family members were arbitrarily detained and they were looking for them. I always remember there was Rehan Asat, whose brother has been arbitrarily detained for years now at this point by the Chinese state. She has no idea why or where he is at the given point. And so she would actually go and talk to mainlanders about her brother in Mandarin. right um and you would have all these rooms with the Tiananmen student leaders we had rooms with uh you know the Hong Kong leaders and the Tiananmen uh leaders talking with one another and people from the mainland would join I remember at one point we had a room where we were asking if

Starting point is 00:20:08 people got into trouble you know uh it's called the in Mandarin it means to drink tea as I sit here drinking tea right now but basically what it means is the cops are asking you in for a chat they're interested in what's going on and they did do that so your online activity is tied very well to your offline activity and we can talk about all sorts of like restrictions and things like that uh you know what was done to the Uyghur people in particular and and certain ethnic minorities dependents as well was a very very strict version where people were sent to camps just because of for example the fact that they had encrypted apps on their phone that was seen as like a suspicious thing wow and that was kind of like an extreme edge uh now i'm

Starting point is 00:20:51 like most people from china part of the han majority and they haven't quite done that the han yet but there are that's a um ethnic group ethnic group okay that's the the han people are kind of the majority ethnic group okay uh in china but they've uh arrested detained people you know um we were just talking along the way here i've read about the story of aiweiwei Right. And Ai Weiwei, the famous artist, poet, the designer of the Beijing Olympics, the Bird's Nest Stadium. Right. He was detained because he made art that commemorated the children who died during the Sichuan earthquake. And there were these schools that collapsed, the tofu schools, because of corruption among local officials. And they took Ai Weiwei, took him to jail. We don't really know what happened to him.

Starting point is 00:21:38 And he came out and the first thing he wanted to do was leave China. so this is all part of the you know the human rights situation and that is extended into hong kong now there is the hong kong 47 you know the political prisoners that are being held in hong kong right now uh some of them effectively to life sentences for example jimmy lye who was the founder of apple daily uh hong kong's one of hong kong's largest newspapers and certainly one the most you could say anti-ccp right right or maybe not anti-ccp but like you know definitely someone who was critical. Yes. The Chinese Communist Party who dared to be critical of the Chinese Communist Party. And now he is in jail. So many people's lives are affected to this

Starting point is 00:22:21 day, continue to be affected. And because of all this, there is an atmosphere of repression. Yes. And there is an atmosphere of self-censorship where I see even outside of China. Yeah. People are scared to talk about, you know, Chinese politics are scared to talk about their beliefs are scared to, you know, go to Tiananmen commemorations or things like that. Insane. Can you talk a bit about the social credit score system? Yeah. How it works? Yeah, no, I'm happy to. I wouldn't say I'm like the world's expert on it. There's actually like

Starting point is 00:22:54 a great, great resource. Whatever you need. Yeah, please refer us to it. Yeah, called China Law Translate by Jeremy Dom. And he translates these direct sources. It's a website? It's a website. China law translate. We'll put a link to it maybe. Yeah. Yeah. And it's a scholar, a Yale scholar. Anyways, like he has done a lot of work translating Chinese law and he does not pull punches about what the Chinese state is doing. You know, the fact that there is the larger truth is that there's this huge digital surveillance state that's growing larger and larger and larger. We'll probably talk about, you know, the Chinese central bank digital currency and things like that.

Starting point is 00:23:31 But there are so many layers of data being collected on people and that's being used to punish people, to censor people. So certainly that exists. Yes. Now, whether or not there is actually a social credit score in the sense of like this overall score that's following you. Like I've seen some of the stuff where like people are like, it's not letting me pay at my gas stations and stuff like that. Now, there certainly is a blacklist. So, for example, people have been prohibited from purchasing plane and train tickets if they're on certain lists, if there's been a judgment rendered against you. So China certainly has these lists.

Starting point is 00:24:07 There have been leaks of large police databases, such as the Shanghai Police Database, which has records on like 1.1 billion plus Chinese people and a lot, a lot of detail. Right. So we know this data exists. We know that people are being scored to a certain extent. But I do think that sometimes some of the videos and some of the ways maybe exaggerated, it's exaggerated and it's kind of not accurate to like what is actually happening. But that said, there is a broader truth there that is happening. And usually the thing is, the Chinese government censors people by making people afraid and self-censoring themselves because they can't really manage to censor a billion people. There just wouldn't be enough jail space for all the all the people directly. Right. That would contravene all these laws. For example, I think potentially I don't know how many people in China use a VPN. That's technically illegal, but like must be in the millions at least. Right.

Starting point is 00:25:05 so you know you you it isn't quite in that way where it's like as directly tailored as directly obvious as like some of the videos might portray but it certainly exists and it certainly is part of a larger trend of the chinese surveillance state being one of the most advanced in the world there's one cctv camera for every two people you know and so if we see uh other states learning how to do digital repression learning how to take that framework they are going to take their cues from china it's not if we see we see we see yeah true true we're seeing it we are seeing it i think a million a million cameras already in london only yeah the united kingdom i believe is the second country is the second country and india and so many countries following china's footsteps

Starting point is 00:25:54 and a lot of the big metropolitan cities around the world are also you know just networking themselves with cameras and 5g towers everywhere and so the trajectory is clear i i did see some examples of the social predispose system from people on the ground when my brother-in-law was in china and he was traveling with a local agent and she showed him her system and she she was proud of it she said this is a like a great way to live for me because you know i can travel i can take the train and take take the plane she showed him her score and how proud of she is she didn't see anything wrong with it or anything bad about it but um yeah so i have that and also another friend friend of a friend that went to china during covid and she wanted to get

Starting point is 00:26:49 a hotel room but she was a tourist and she was new and she didn't have the proper the idea yeah the idea so she wasn't allowed to take a hotel room and she had to sleep on the street because no one would let her in yeah with the proper identification and and proper score i guess i don't know so there are some crazy things that yeah people think that it's happening only in china but the west is really mimicking a lot of that and also other countries in in the east too I mean, Thailand now with their CBDC rollout, I just read that they are attaching. There's a company in charge of a project to attach your digital ID when you book into a hotel to transfer that automatically to the relevant ministry in the government to let them know that you checked into a hotel. So there's like a project for your digital ID to be transferred automatically to the government, letting them know which hotel you're in.

Starting point is 00:27:51 and europe actually has something similar to china china they they are actually in some respects so they also tie your sim to your real world id so i want to say a couple things first of all yes thanks for the catch um we do see this happening and that's actually one thing i also try to bring up as often as possible i know we have this like china's dystopian and all these things but we see some of these tactics being used now in the west and places that we think to be free exactly and It's it's worrying. It's it's not something that we should let slide by. And I often bring that point up when I talk to policymakers, when I talk to people on the ground, when I talk to people, you know, outside of China, I say like, you know, you live in Canada. Yeah, I live in Canada. Canada is also going in that direction in some ways.

Starting point is 00:28:40 Yeah. And, you know, we had the trucker protests and the censorship and the bans on using Bitcoin there and the emergency laws and imposition. So this is all already here. It's not even just coming to you next episode. It is already happening. And so in China, some of the things that you mentioned, I think are like entirely correct. Like Chinese people use a lot of apps. It's one of the most cashless societies, for example. So there is WeChat Pay, Alipay. They have their own internal scores that allow you to use certain things. right um and uh one of the stories i have that i think that shows you you know where the censorship is so scary i know someone who actually they uh so wechat and wechat pay are kind of like your default way of paying as well as your way of communication um and what's scary to me is some people in the west are trying to replicate this like whether or not you're not yeah exactly if elon you know is trying to replicate this he can't everything app yeah exactly he says it the thing with an everything app is it's an everything data on you it's everything's connected so i know

Starting point is 00:29:44 someone was suspended from their wechat for posting yeah or talking about bitcoin but then they were also suspended from making payments because it's the same app so you know if you create a world where all these people are using these apps and they're the only way to functionally pay because now some merchants refuse to accept cash yes um you know they it's like very hard to set up without digital payments, then you create a world where your behavior can be penalized right away. And that is happening here as well. Yeah. A hundred percent. The centralization is the biggest problem. Like when people tell me, you know, Elon without him, we wouldn't have free speech and X and dah, dah, dah. All right. Fine. I'm not taking that away from him. Yes. He's doing

Starting point is 00:30:30 a lot for freedom of speech and the stuff that he allows to happen on his platform versus other platforms i give it i give that to him however the fact that he is the one nick to choke you know we we both follow jack dorsey and see the kind of truths that jack is sharing about his previous life in twitter and the fact that he was under constant pressure from the government to censor to um provide data about users to you know this is happening and with one of my recent episodes with mike bentz we go into the censorship that is being uh inflicted by the governments on to social media platforms and news platforms etc this is happening and the fact that elon is a one nick to choke is not going to change yeah he he may have a strong back he may try to

Starting point is 00:31:22 resist a lot of the things that they want him to do but at the end of the day they are so powerful like they the governments the the global organizations whatever that they can find ways to inflict different jurisdiction laws or different limitations like they do in brazil like they do in different areas in the eu with the dsa etc etc that he will not be strong enough to to overcome all of that and at the same time as you say once he adds in the everything capability into his app then if he's down at one in one country and you rely just on him you're fucked you know you you want to decentralize yourself you want to be able to have redundancies in other places so that when something goes down you're not just reliant on

Starting point is 00:32:12 one source and you have the freedom to then operate elsewhere with your wealth with your communication with your information with your identity with whatever it is that you need in order to function in a digital life that we live today right i wrote about this because you know like telegram as well right when when they took down telegram they they choked durov they arrested him yes right and then telegram made all these changes for me that's why it's so important to have platforms yes to have platforms to have protocols to have protocol yeah sorry to have protocols and not platforms right um because with protocols we we hint to noster by the way yeah Yeah, yeah, yeah. I mean, I'm on Nostra as well. Let us know. But, you know, the protocol part is

Starting point is 00:32:56 so important. The email, you know, having the email of money of sorts of Bitcoin, right? Because you don't have one single throat to choke. You have so, so, so many. And, you know, whatever you thought you think about Elon. And by the way, one fun fact about Elon is he has a Weibo account where he's a lot more calm. He's a lot more calm. What does he have? He's a Weibo account, which is kind of like a chinese twitter okay and he's he's much more uh calm on there you know so i always joke about that he really communicates there well he's very dependent on china he's got the gigafactory in shanghai he's selling he used to sell so many uh and you know it was such an important part to his business and so when he actually became the uh the uh the ceo of uh x

Starting point is 00:33:41 or i guess the owner yeah like people in the chinese kind of dissident communities were very worried because they knew about his extensive business ties and the fact that he you know will visit the premier Li Chang like directly and all this other stuff he prioritizes China because so many of his business interests are there right um and so regardless of what you think of that and maybe he has his own independent views and all this other stuff but the point is not even that like Elon could be Saint Elon could be and he's not by the way but if he was it doesn't even matter How can you have the world's internet and communications rails dependent on one person? They fuck this one person up, they screw you, they screw me, they screw everyone.

Starting point is 00:34:27 It doesn't make any sense to create a system like that. If we want an internet where the people are empowered, we want an internet that helps people control their lives, not helps them be controlled by others. And I think anywhere where you see platforms, you see companies, no matter the intent of who these people are, you have to be wary of that. And I just highly encourage people to study protocols, to embrace protocols, you know, whether that's Nostr, whether that's Bitcoin. And, you know, one thing I always bring up to people is like, it sounds complicated and all this other stuff. but you know for most people you don't even have to like see it to really you don't have to really know about it that deeply to use it people forget one of the most original protocols is email

Starting point is 00:35:17 right and it's the whole same idea like no one can really take down email communications between different people so using that same logic more and more clients can come out and more and more clients serve that protocol yeah you can't stop that um and so bitcoin and noster you know kind operate on that same principle and i think it's so wonderful that they do i agree with you i want to like open brackets and just take you back to one of the things you said about china going cashless because recently i wrote the article about israel probably going cashless and i i got a quote from you uh about something that the israeli biggest newspaper said that this is the way it works in china china has cities that have no cash at all and then you corrected that fact

Starting point is 00:36:06 and said well this is factually wrong because the the chinese government is actually not allowing businesses to not accept cash is that is that correct i just wanted people to be aware of that cashless society and what it actually looks like yeah so in china it is quite cashless but it's not through the government making bands that's why i was when i saw the article i was surprised that they imply that china had cities propaganda where they were banning well so first like please nation states of the world don't look to china for an example right like well they do it because they want to justify the fact that they are going to enforce such extreme measures you got china's doing it and but even china's not which i find really funny there you go there you go so let's

Starting point is 00:36:52 clarify that so so china doesn't uh ban the use of cash in the sense of coercion and in fact the central bank has penalized many people for uh there's these cases that are for obviously they can't get to everyone but they penalize certain merchants and others for deliberately and flauntly not accepting cash uh they are trying to push out the ecny which is a digital yen right but they're not doing it by banning cash per se what they're trying to do is to really push it through the state media and other things so even in china they're trying not to like coerce people into it so far yeah we don't know it may change but for now yes it may change but for now they're not really doing that okay but but in china people uh are using digital payments a lot a lot and

Starting point is 00:37:39 they're doing that because the merchants are usually like it's just easier to like accept like digital payments and stuff like that um they just use like a wechat pay account or something they get like kind of a merchant account and you get a qr code you kind of send it over um so in that sense yes but in the sense of like cities banning cash and things like that i i know i don't see that as being accurate okay not yet yeah but then let's let's move on to the cbdc the ecny or digital yuan yeah and um when it was rolled out in china what's the adoption like how do merchants and and citizens view it today is there a future for it where do you think it's gonna go and how is it gonna roll out yeah um you know it was the first one right the first cbdc project to launch

Starting point is 00:38:30 or one of the first it was one of the first i think there was some earlier like pilots from other countries but like smaller countries definitely like the earliest to launch from like a major world economy um so the research started in 2014 shortly after china in 2013 banned banks from using bitcoin and kind of like started its first round of restrictions against bitcoin so definitely originally uh anticipated because of bitcoin yeah that was like the first stimulus for it that was kind of like the first reasoning the first trigger for sure um and china the way they operate it's kind of like in years and decades i mean it is kind of true that especially the central bank and things like that they are thinking out like for a very

Starting point is 00:39:14 long time period they can yeah they can because the one state totalitarian party right um and also because they they you know they control the power they control the the they're the monopoly on yeah violence and exactly money a one-third totalitarian state i should say yeah um so um yeah like the digital yuan was then rolled out around uh 2019 i want to say uh it's in the book exactly the year we forgive you if it's not accurate it's fine 2019 ish um i remember writing about the first pilots um and so they kind of handed them out um and the pilots are really funny actually because what they did is they like texted people it's almost like an airdrop um which is super it is yeah people you just got a text that was like hey you've got it like 200 digital yuan waiting for you and people

Starting point is 00:40:03 were like oh it's like free money well because the ecny unlike uh alipay or wechat pay which are like private kind of solutions um they it's directly from the central bank it's directly issued from the central bank so they kind of just like i guess printed it and then airdropped it But the thing that was really scary about the pilots was that they actually made the money expire. Yes. So in two, you have to spend the money in two weeks. So there's all these funny stories. It's funny, but like, you know, people are like, Oh, I had to go and buy like glasses because I couldn't find anything else. I had to drive like, you know, half an hour to go to some random restaurant in order to spend this money. But you sit back and you think, and you're like,

Starting point is 00:40:42 wow, this is a system that allows you to track people's consumption habits. And then it allows you to expire their funds sign me up sign me up okay it's so crazy it's so fucking crazy and um so that was kind of like the beginning of it and now um they tried to really popularize it like for example the winter olympics is one of only three kind of currencies i think visa was one of the sponsors as well so that was also allowed to transact but you know uh and nowadays it's in 29 cities um it's still called a pilot yeah it's basically rolled out like yeah like for example you can use and i've had people send me photos like you can use the ecmy to pay for like public transit in beijing there's like a bunch of different merchants it's about 0.16 percent

Starting point is 00:41:29 the chinese monetary supply right now right um but it hasn't seen a ton a ton of adoption right Part of the reason why is because in China, there's like no point. WeChat and Alipay. Well, there's WeChat Pay and Alipay. But also, I think all governments that are rolling out CBDCs are going to face the same thing. Yes. Because it doesn't have interest on it. Yes.

Starting point is 00:41:52 Right? It's just literally cash, but you put it digitally. Yes. So you're just like, well, okay, if I'm used to cash. I may as well use cash. Might as well use cash. Yeah. And so they tried to popularize this with tourists and older individuals, right?

Starting point is 00:42:05 but that but that's a nice route they may take the violent route and go well you have to use it for taxes you have to use it for salaries you have to have paid government employees in it there you go paid government employees in it they will coerce you to use it for certain things and that wouldn't be so nice you don't have a choice you have to use it for certain i mean israel has that in their the bank of israel's white paper says that that would be one of their adoption mechanisms so one the things i find really funny is like you have these states like nigeria and it sounds like israel yeah although you've done a lot more research than me on that topic but um i think like they're already coming out and saying that they're going to use use of force and stuff like

Starting point is 00:42:45 that the the obviously don't call it force but they're just saying sure these will be the first places where we will yeah enforce the uh legal legal tender on right right right and the chinese party state has certainly forced like for example like uh platforms to upset bcny right certainly forced you know different measures they put it in state media all the time this is a very important focus of theirs um on the domestic front but they haven't like forced alipay or wechat pay to shut down they've also said at least in their white papers so far they've been like hey we're not going to try to replace cash with this we're not going to try to replace alipay and wechat pay with this uh but by the way wechat pay and alipay are not that much better like from a

Starting point is 00:43:27 surveillance perspective i'm sure but but that's what i wanted to ask you so they did say recently i read that they are integrating uh the ecny with alipay and we pay and we chat they did force that so my question is is it like a if you can't beat them join them strategy you know why why compete against we chat and alipay when we can just integrate in the back back end and have them accept this and it's kind of transparent for the yeah millions billions of users that they have yeah i mean um well so they already have tried to integrate into the mega platforms right because that's kind of like where they can be so in china the way it works is they usually they paint a nice pleasant picture for the citizens right so they say like or for the people overseas they say like

Starting point is 00:44:15 oh we're not trying to replace cash we're not trying to replace alipay which i pay of course they're because they put that i think they're always thinking about that right but um they're usually really hard on the companies um and yeah with with uh alipay for example jack ma was disappeared for a little bit of time right like they have their ways of leaning on these companies um this is kind of the thing you see with china right jack ma criticizes the chinese system he criticized the chinese banking system he disappears a little bit so this definitely happens uh but the thing that's missing is they can't coerce the individual merchants yes so the thing is is like you know uh the mom and pop shops those are like the long tail of wechat pay

Starting point is 00:44:56 so imagine you know you go to like a mom and pop shop they have a wechat account because they're using wechat to talk with like their friends and their family anyways so they set up a wechat pay account so that way you can set a qr code and pay them right there but they're not going to set up an ecny merchant account just because you know so that's where china's ecny is lagging in adoption i believe the last time i checked there's a magnitude order of 10x more merchants that use alipay and wechat pay the only way this could be scaled efficiently is if they really change the underlying base layer mechanism in the background yeah so that the end user has no really no change it's just that instead of having yuan in the background it's ecny now like on the central

Starting point is 00:45:38 bank and you know what i mean that's the only way that they can really scale it yeah but that really will take a lot of politics between the central bank and the government to the big merchants or the big well uh i think like from a user perspective it won't matter that much but exactly from a merchant perspective they'll want to get like the merchants to start yeah adopting I think that's kind of like the big thing. But also the other thing, while we're on the topic of the ECNY, is I see the traction internationally to be more concerning. The fact that China is trying to build standards.

Starting point is 00:46:13 Hong Kong, I saw that they are allowing the ECNY to be used in Hong Kong. Correct. They're integrating it with Hong Kong. Any other beginnings you're seeing there? Yeah, they have Project Enbridge, which is a quote-unquote blockchain project. that so cross-border exactly bdc payments yeah many countries participating so you know how and i know effort because you've done a lot of research to cbc front you know how like a lot of it's being pushed by the bank international settlements and the innovation hub all right but china is the country that's trying to set all these standards standards is the blueprint like klaus schwab is

Starting point is 00:46:48 saying china is the blueprint exactly exactly and klaus of course you know hosting the annual new champions in china in china all the time having chinese one davos and one china davos a year like every year yes they have they always have chinese policymakers come and speak as well so you know kind of how klaus schwab is thinking about that yep but um you know uh i think that um the ecny standards for international are a little bit more threatening because domestically speaking you know like yeah they're trying to apply it to the tourists they're trying to apply to old people i think like most countries will not allow the ecmy to transact directly like the united states still have their own but then they'll have the like you say the blockchain mechanism right exactly

Starting point is 00:47:35 across the border and but but the bank international settlements those standards that china's leading like how to implement a cbdc countries around the world central bankers around the world are interested in i believe there's a survey of course it was like 83 percent of member states or something are looking at that and trying to adopt cbdc's eventually so china is a country that's been the most advanced and implementing across the scale right there's so many people uh it's also trying to teach other countries how to do it i think this is very concerning and you're seeing it used so they use it to buy oil from the united arab emirates so there was a settlement in ecny really that i wasn't aware of is this recent uh it was in 2023

Starting point is 00:48:17 in october 2020 wow yeah that's very interesting yeah and you see so in project embridge you see two members that have joined uh so thailand central bank joined right we just talked about that uh hong kong's the hong kong monetary authority is part of it and they just integrated it i would say probably forcefully into hong kong financial systems and things like that um but you also see the united arab emirates right and now saudi arabia's central bank has joined project enbridge so you're seeing the beginnings yeah of like hey we're using cbdc standards and also that might be a way to move away from swift move away from like country to country settlement especially if you think about how important china is in terms of being the

Starting point is 00:49:01 world's largest commodity importer right and so if it starts telling countries like hey we want you to sell on cbdc's and now you have all these rails of cbdc selling one another like we we have a i think like bitcoiners have a fight on our hands and this is the element that's the hardest because countries are going to try to like maintain their monopoly of control within each other and this rail bridge and this kind of innovation hub is one way they're doing it and china has been publishing the most research and the most actual application of it as they've been pushing it through their pilot cities okay i encourage everyone to follow you uh in order to keep track of the latest developments of china's um cbdc and economic you know expansions etc

Starting point is 00:49:53 i wanted to quickly ask you about um the belt and road initiative and what can you tell me about that how is it progressing around the world i mean i i have i haven't done enough research i admit but i have a feeling that yeah that initiative is in the background of a lot of the geopolitical tensions that we're seeing today around the world including the middle east but you know i just would like your opinion about where it's at today so yeah um some people are not aware what the belt and road initiative is so maybe you want to say a few words about that Yeah, the Belt and Road Initiative is essentially a development plan that China's offering countries around the world. And the essence of it is kind of like development loans. And usually they're

Starting point is 00:50:41 collateralized by, you know, assets that are either being co-developed or they're being developed kind of separately. So usually it's like investments in like deep water ports, like roads and things like that. And so, you know, this again, not like the world's expert on BRI necessarily but um you know there's plenty of uh good resources i think like i'm trying to think of one that like might be really good as a reference um maybe i'll send it to you like after the show no worries but um the uh the essentials of it are that china has made a lot of money by being the world's largest exporter right and so uh it has recirculated some of that money into U.S. debt, for example, by becoming one of the world's largest holders of treasury

Starting point is 00:51:29 debt. But it's also recirculating that money by buying now, especially now that there's a little bit of decoupling into like hard assets and geopolitical favor. And so you do see this correlation on the BRI front where there's countries, you know, that are taking loans and everything's from China and they're collateralizing assets. And I think it's backfiring a little bit in china because there's been a lot of you know for example like some of the loans are going bad and so now you're taking a look and you're seeing like maybe there'll be seizures of certain things some of the projects haven't proceeded as quickly as they might have um and so do you have any examples well pakistan for example you know there's a lot of pressure

Starting point is 00:52:11 i think on the military regime that currently exists in order to get like some of the deep water ports uh kind of activated around there uh there have been seizures of uh certain areas like different places in africa for example that have been collateralized and things like that that's always like implicit in some of the contracts that are in there um yeah i i think uh one thing that might be a little bit closer to home when it comes to uh bitcoin is el salvador el salvador has a lot of funding uh from china um and uh bukele has talked about this the national stadium a lot of the water infrastructure um and some of that you know el salvador switches recognition from taiwan to the prc and so you wonder a little bit of like you know china i think is thinking about

Starting point is 00:53:00 it from the lens of we can buy geopolitical favors by being the financier for infrastructure projects, because now there's just simply aren't enough infrastructure projects to invest in China that are, quote unquote, shovel ready. And so you recirculate around and you get the added benefit of getting countries. So Greece, for example, that's a EU member and, you know, but has a little bit more of a China friendly flavor, you know, Hungary. So these countries that are part of the, quote unquote, Western bloc that have important voices and votes, but that are essentially having their infrastructure funded by China. Very interesting.

Starting point is 00:53:39 And I wonder how El Salvador specifically is going to advance with its relationship with the US versus China in the next few years. That's going to be very interesting to watch and follow. What about you personally and your passion towards Bitcoin and how you see this technology changing things in the world? what what does it mean for you to be in bitcoin i uh well i'm wearing a bitcoin propaganda department hat as we speak i does it say propaganda yeah yeah i got that from the uh bitcoin national conference yeah yeah um i love bitcoin um you know what i always say because people always ask

Starting point is 00:54:24 me about the price and i'm like i'm one of those people that would use bitcoin if the price was zero yeah if the price were a million yeah like you know i just i think it's just so important to have control over your own finances your own savings in a way that's separated from the craziness of all this debt and printing and everything and like now you might have like seizures and things like that and we saw in canada right the trucker protest the inability to be able to finance causes that you know are just political in nature yeah um just so shocking these things that are happening now. And so for me, like it's such an important hedge and it's such an important educational way to understand, well, from a technology standpoint, how do we control our

Starting point is 00:55:10 own finances? How can we use this new technology to get there? So I write very much about cases of like internet censorship and when Bitcoin is being attacked. Part of the book, the reason why is because I think China was one of the most advanced at trying to attack Bitcoin, you know, by making exchange bans, by making, kicking out some of the miners and things like that. Right. But Bitcoin education still perseveres in China. There are Chinese cypherpunks that talk with one another on Oster. It's so cool to me to see this like ground spell of movement, even the most repressive societies, something that we can all learn from. And so that's where I think my passion comes from. My passion comes from, you know, I get sometimes, you know, it can be Chinese people or it can be people from Bangladesh and they reach out to me and they're like, you know, your articles made a difference in the way that, you know, it helped us, you know, share light.

Starting point is 00:56:04 And it always helps a little bit to get like, you know, I guess foreign press involved, you know, and help highlight these different causes. And it's just so important, whether it's the internet being taken down so that the government can prevent Bangladeshis from sharing photos of a massacre that's happening right now, or if it's Chinese people who are realizing, hey, WeChat Pay and Alipay, that's a terrible idea. I don't want to have all my finances surveilled and controlled and potentially censored just like we talked about. I want to learn about Bitcoin. I want to learn about Lightning Network. And so I love to go to BitDevs. I love to learn about the technical side. I use it.

Starting point is 00:56:41 you know, I'm, uh, running around with the book and selling the book and sats and cash. And people are always like, you don't take debit card. You don't take anything else. And I'm like, no, this is just, this is, this is the new way. And for me, it's so important that you have that potential to have your transactions be private censorship proof. Um, not the potential, the actual, you know, being able to transmit value between ourselves peer to peer, just like the internet should be and i'm just such a fan boy i kind of come from that part of the bitcoin world of like the early internet there's like some of us who are like all part of those like early bbs like the chaos like i just don't understand it like now the government's trying

Starting point is 00:57:23 to get involved all the the men in suits you know it's like you know squashing all these different conversations like you can't post these memes and you can't like do this stuff and you can't it's all this this crazy shit and i think bitcoin is just one of but one of the most important tools to be able to live our lives freely and to be able to live our lives with that kind of like chaos and spontaneity that hopefully no government will be able to deny. And that will be because of Bitcoin and Nostr and protocols like that. Hallelujah. Yeah.

Starting point is 00:57:55 Roger, where should people follow you? I always say Nostr because like I'm trying to, I'm trying to, I was one of the first writers on Forbes. If you go on Forbes, I actually put my Nostr NIP05 in the profile. So that's Loki at Noster dash verified dot com. But of course, all of us, you know, if any of you are an ex or Twitter, I even though I'm there, too. Yeah, I'm there, too.

Starting point is 00:58:18 They did try to censor me once. They were like, they limited my reach. Whatever. It's all in the game, right? They're like, your account seems a little suspicious. Yeah, we're throttled from time to time. Shadow banned from time to time. Me, too.

Starting point is 00:58:30 Yeah. You know, I just post my MPUB. It's fine. Like, I don't really you know, I just accepted the fact I'm probably censored a little bit. uh but i am there roger h 1991 um and yeah there's my forbes profile that would be my latest writing so if you just look up my name roger huang huang and forbes you'll probably find my latest things i've been writing a lot recently more on the china stuff i think there's going to be a couple of articles i'm thinking about writing one about like how mainland chinese use bitcoin right now

Starting point is 00:58:58 even to this day right uh my last few articles have been more about like i think the economics of it but previously i wrote this article i mentioned to you about telegram uh how the telegram censorship uh and the uh simply bitcoin take down show the youtube yeah of uh yeah from show the importance of all these things we're talking about so is forbes relatively okay with like any type of content they're not censoring much they censored uh one of my colleagues from writing about the bbc right so um yes i've seen that one yeah yeah i also write for bitcoin magazine i also write for like other things as well but on the most part they're okay generally they're okay with my stuff they definitely have given me some editorial notes

Starting point is 00:59:43 uh but in general i've written for them for quite a long time uh there's definitely some other articles that i would not publish with them um that i publish in other outlets like example bitcoin magazine yep um that they won't run with um but they've been okay with some of my content yeah thank you so much for your time and for sharing your knowledge and your expertise your research or so generously and in general thank you for being a very brave soul to be covering all those things that many people are afraid to cover i think it is super duper important to have people like you, to have you doing what you do.

Starting point is 01:00:25 So I really acknowledge you and appreciate you. Thank you so much. Efrat, thank you so much for the acknowledgement and thank you so much for your work and all the work that you're doing, putting out all of our voices.

Starting point is 01:00:35 My pleasure. Thanks for being with me. Thank you.

You're The Voice | by Efrat Fenigson - Ep. 62: Roger Huang - How Bitcoin Challenges State Control & Surveillance

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