Welcome to Keith Knight. Don't tread on anyone in the
Libertarian Institute. Today we will be discussing
hijacking Bitcoin, the hidden history of BTC with the author,
Roger Fear. He is the founder of bitcoin.com
and the Co writer Steve Patterson, founder of the
Natural Philosophy Institute and host of Patterson in Pursuit.
Gentlemen, thank you so much for your time.
Thank you. We're.
Both glad to be here. Roger, I want to give a little
introduction to economics, Why it matters, then move into
crypto, and then go into why this book is important.
You frequently promote a book, Lessons, Economics in One Lesson
by Henry Haslett. What are the major takeaways
from this book, and why do you feel it's so important?
I think, and there's so many things in in the world that
people just assume are correct and just assume take for
granted. But when you go and look into it
and dive into it a little bit deeper, oh, a lot of times the
opposite is true. And it's like one example of
that is like minimum wage laws. You think, oh, that's going to
help people, That's great. But if you actually look at what
it does like, there's no guarantee that anybody will have
a job. All minimum wage laws do is
guarantee that, like, if your time is worth less than whatever
the minimum wage is, you won't have any job at all.
And so, like, it doesn't actually help people.
It hurts people. And that's very counterintuitive
to the way most people just assume most things with
government's work. And so, like that book was a
real eye opener for me as a young man before I was, you
know, a hardcore libertarian and cap.
It just kind of got me thinking. And same with like a number of
books by Milton Friedman as well.
They're a bit more soft and gentle and subtle, but it really
made me start to to think about things a bit more differently.
And then suddenly I came across Murray Rothbard and my entire
view of the world was turned upside down.
But I I think I see the world clearly now and it was the view
of the world I had before that was wrong and and and and you
know, clouded by by the world I had lived in up to that point.
Just like little kids all believe in Santa Claus because
every adult around them tells them Santa Claus is real, and
then suddenly one day they find out it's not real.
The same is really true about the government's role in
society. Like everybody's taught from a
very young age that government is this wonderful thing that
benefits everybody. Without, you know, government,
the society would fall apart. But actually I I think it's kind
of the the opposite is the the truth for the most part in most
situations. Yeah.
And one of the things that I appreciated from Roger early on,
I've been following him for a long time was when he was
talking about Bitcoin. It was very much in an from the
economic perspective. And I appreciated that because I
was, I think I was working at the Foundation for Economic
Education at the time. It was around that general area.
I was an intern and then I was working at the organization and
I realized that economics is an incredibly powerful tool for
understanding how the world works.
I was kind of coming in at from a political angle.
I was interested in politics. And then I realized and I heard
Ron Paul talk and he made a lot of sense.
And I was like, who's this Ron Paul guy?
And he then he started referencing Austrian economists.
He started talking about economics all the time.
And I thought, wow, this is really interesting.
And so I kind of went down the rabbit hole of economics and I
found that a much more powerful way of understanding the world
than kind of superficial political analysis.
So then when he, he was Roger Veer coming along talking about
Bitcoin and Austrian economics at the same time, I thought, OK,
wow, there's something special here.
This is very this is the stumbled onto something very
powerful. It's so funny you mentioned the
minimum wage example. I remember even when I was
interested in libertarianism, I thought, well, you gotta have a
minimum wage. Obviously every sane person
knows this and to my surprise both Doug McMullen and H Lee
Scott, the to the current and former CEO of Walmart, came out
in favor of the minimum wage and raising it.
And I said, well this makes no sense.
Here I am thinking I'm taking on the big CE OS and the big
business by supporting the minimum wage and they supported
it. Do you guys have a general
theory as to how it is that so many people can believe
something that there is so little evidence for If you raise
the price, you get less of something.
Obviously the minimum wage hurts people with the amount of skills
and experience. How is it that so many people
can believe something where there's such little evidence?
Not just so many people, so many experts.
Well, maybe those CE OS don't think that they're helping poor
people or unskilled people. They're hurting their
competition, right? And I think that that's why
they're most likely to support those laws, because it hurts
their competition more than it hurts the businesses that
they're the CE OS of. So it's a way for them to force
out competition in the market. So I I think that's probably
their motivation. It's not some altruistic desire
to help poor people or help unskilled workers in the
marketplace. Yeah.
And unfortunately, you know, that might be true for the CEOs
and the people that are making big decisions that they're it's
kind of a pessimistic or callous way of analyzing things where
they know exactly what they're doing.
And I think that's true. But there's a whole lot of other
people who aren't in those positions that still think the
minimum wage is helpful. And it's a fascinating question.
How can so many people believe these ideas that are pretty
thoroughly refuted? I mean, there are some, you
know, complex ideas in economics that are open questions, and
they're, you know, really interesting people disagree.
But the effects of the minimum wage, it's pretty, it's pretty
clear that on net, this is harming the people that it's
supposed to be designed to help. And then, you know, how does an
idea like that stick around? Oh boy, that is a really
difficult one We saw in Bitcoin. You know, just to bring it to
Bitcoin. Eventually a whole bunch of
really bad ideas, even worse ideas, frankly, became very
popular over the period of, let's say, from 2013 to 2017.
And one, at least one way that those bad ideas became popular
is through mass censorship and propaganda.
So I think it's very possible that maybe something like that
is going on with ideas like the minimum wage or other other
basic economic concepts where the the better ideas are sort of
hounded out of the market. You know, I don't know if
there's censorship propaganda going on at the government
schools or public schools, but perhaps that's the reason they
stick around, I'm not sure. Yeah, or or third possibility
with these CEOs as well. Maybe they know that the general
public's been fooled about the minimum wage and rather than
have to deal with the mob of angry people out there in the
world, they just say, Oh yeah, I support the minimum wage too.
And that way they don't get attacked, you know, incessantly
on social media for not having supported the minimum wage, even
maybe, though, even though perhaps they already know that
it's actually a bad deal and it actually hurts people.
They just don't want to deal with the, you know, mob of angry
misguided people saying why are you supporting the minimum wage
so? One of the things I've been
surprised to see is that the word inflation has been used
more in the last couple months. That happened to be, you know,
right after Biden's Inflation reduction Act, where people are
actually using this word to describe a rise in prices, not
differentiating it from a change in supply and demand.
They just say prices go up and that is inflation.
Anything jump out to you as wrong with that analysis or
missing in the big picture? Yeah.
The big picture is that everything's competing for
usefulness as money in the marketplace and when and the the
price of money is set by supply and demand, right.
So if they increase the supply of dollars out there floating
around in the marketplace and of course the the everything else
priced in those dollars goes up because now there's a bigger
supply of dollars. So the price of everything is
going to go up. And so like, I forget who said
it, maybe Murray Rothbard or Milton Friedman, but somebody
said something along the lines of like every time, everywhere,
inflation is purely caused by an increase in the money supply.
And so many people just view it as something like, you know, the
weather or something that's just beyond our control and something
that just happens all on it. So no, it's when government
prints more money, that's what causes inflation.
And so, like, the people that get the money first get the
benefit from it first, right, Because they spend it before the
rest of the people have figured out, oh, there's more dollars
out there in the market chasing the same number of goods.
But if you know if if printing money could solve poverty, you
know printing diplomas would cause cure stupidity, right?
It's it's not. Neither of those things work,
and you're just you're just you're just fooling yourself if
you think it does. How would you respond to the
claim that inflation is the result of capitalism and private
enterprise choosing to be greedy and not having the proper
regulations to keep prices low for consumers?
First, I might roll my eyes and take a deep breath like you just
saw me do. And then second, I would explain
that entrepreneurs and capitalists are always greedy.
That didn't just change in the last couple of years, right?
But the fact that they're greedy, like the way these
businesses, when they're not using government to stifle their
competition, the way businesses earn a bunch of money and
businessmen earn a bunch of money is by giving their
customers the things that they want, right.
So as Adam Smith said, it's not from the benevolence of the
butcher or Baker that we expect Our Daily Bread, but from their
own regards, for their own self-interest.
And so it was the same of the for the butcher and Baker
hundreds of years ago. And it's the same for, you know,
Apple computer today and and and everybody else, right.
They give everybody iPhones because the people value the
iPhones more than they value the dollars they give Apple.
And so the same is true of all these businesses out there.
They're getting rich and they're the the people working there and
the shareholders, they're all greedy and they all want more
money, but the way they get more money is by giving people the
things that they want. And it's like that didn't change
just recently. That's not what caused
inflation. Like that's been true for since,
you know, the beginning of of humankind, like people been
trading with each other to to get what they want from their
neighbor. And they're, they've been greedy
the entire time, right. They want to trade and get what
as much as they can possibly can from their neighbor.
And hopefully most people most of the time continue to do that
without without force or fraud. And if you look at it like the
government does a horrible job of preventing that force and
fraud anyhow, things like consumer reviews and online
ratings online do a much better job of you know, cautioning
people about scams or or faulty products or that sort of thing.
So like, I don't know, I'm just kind of a disappointed that so
many people have have been fooled.
But that's why we have this wonderful platform to help try
and get the word out even though there's massive amounts of of
censorship now on the big platforms like YouTube and and
Facebook and and others there. But you know, let's make sure we
share these this content on the other less censorship prone
platforms as well. Yeah, and inflation is a
particularly relevant topic to cryptocurrency and Bitcoin.
I know a lot of people, myself included, were drawn to the
monetary side of Bitcoin that had a promise of being an
inflation proof digital currency, which sounds amazing.
The the deeper you go down the rabbit hole of monetary
economics and political theory, you learn that the ability to
print new money is one of the most powerful things in the
world. So.
Powerful. Not necessarily in a good way to
be clear. True, yes, Right, right.
Not very much. If you don't like governments
having a bunch of power, then you're not going to like them
being able to print currency at will, because that empowers them
to do all kinds of things that a lot of people think are evil and
and make us all worse off. It's effectively theft.
They're stealing value from other people's savings by
printing more currency. So related to Bitcoin, that's
what a lot of people were drawn into cryptocurrency just for
this angle, this promise of maybe we can get away from
government issued money, government controlled money.
And I still, I still think it's a beautiful idea.
You know, unfortunately we have an uphill battle to climb there.
But and I'm sure that's still something that that motivates
Rodger and and myself still is like that.
The promise of being able to take this one power away from
the state and the government is very tantalizing.
And it's amazing more people don't agree with us.
All I heard about since elementary school is we need a
state to enforce antitrust laws because monopolies are bad.
Also the state needs to monopolize the money supply,
monopolize legislation, monopolize guns, monopolize
taxation. I could have sworn monopolies
were just totally horrible 2 minutes ago before we get into
BTC specifically. Steve, you said in a article, a
seed of doubt to experts and incompetence, that Austrian
economics specifically is what sort of radicalized you.
What is it specifically about Austrian economics that you
thought was important as opposed to classical economics or the
Chicago School? Well, the true answer to that
question is going to be too boring for this talk and it has
to do with the methodology of economics and the methodology of
Austrian economics. But I can summarize it in in a
more interesting way. So something that happens not
just in economics but in from what I can tell, all domains of
thought is you go up levels of let's say let's call it an
abstraction hierarchy where people as they're trying to
learn something, they learned principles that tend to be more
abstract and they go higher and higher than abstraction.
And this often crosses into the domain of mathematics, which is
a kind of a very high level abstract way of trying to
understand something. And after learning about or
seeing the attempts to mathematize economics, I became
very skeptical that this is a good way of doing economics.
And the Austrians historically have been very skeptical of the
application of mathematics in economics 'cause they think
there are in my language, I would say there are abstraction
errors everywhere. So even basic concepts like GDP,
which seems like something that's like a sort of a mathy
idea, C + I + G -, X, -, M, right?
That is a very you have to be very careful when you use that
concept or you can be misled. You can think it's telling you
something about productivity and it it might not actually that
might not be the case. So there are many, many, many
cases where I think the Austrians have kind of a micro
economic view that's pretty sceptical of really big high
level abstractions for understanding economics and I'm
very drawn to that. So just one more concrete
analogy on that. It's kind of common in
mainstream economics to talk, to make analogies to like a car,
right? They go, oh, inflation is
revving up and so that means the economy is overheating as if
it's like an engine. And like, there are these
drivers of the economy press on the gas pedal.
Oh, that these guys press too hard now they got to press on
the brakes. That whole way of thinking about
economics I think is very bad. It's an abstraction error.
So I really like the Austrians approach here.
They have a much more, much more pleasing methodology to to my
mind. Rodger What's so special about
Austrian economics, And what's wrong with the Keynesian world
view in general? Yeah, I I, so I I guess I'd like
to clarify and I in the zeitgeist of the world, they
talk about, you know, Austrian economics and the Chicago School
and classicalists and Neo classicalists and Keynesians.
But like there's just economics, right?
There's just physics, there's just economics and the Austrians
are the ones who have it right? So Austrian economics is real
economics. The other ones are just, you
know, confused witchcraft type stuff.
And so, like, I remember there was one Bitcoin maximalist.
I'm pretty sure it was a man named Jimmy Song.
He wrote some essay calling me like a Bitcoin Keynesians and
how the small blockers are Bitcoin Austrians.
And and they're like, I called them out and I said, have you
even read John Maynard Keynes, The General Theory of Money and
Credit? And he didn't want to admit it
directly, but I pushed me a minute.
He hadn't even read it. So I read the book cover to
cover. Basically all he's saying is
that government should print more money to trick people into
thinking that they have more money.
And then they'll go think they have more money and they'll go
out and spend more money on things that they wouldn't have
otherwise bought. And then that'll like induce
more people to go and spend on things, but like spending money
on consumption goods doesn't make the world a a richer place.
Maybe you'll have a little bit something in the short term, but
where like if you really want to grow the world's economy, people
need to spend the money on things that are going to produce
more goods and services in the future.
So like not spend your money on buying a new car, but spend your
money on investing in a new car factory.
And the new car factory will then produce more cars.
So there will now be more cars in the world for everybody to
enjoy. And it's like all John Maynard
Keynes's whole theory is, is to have the government print more
money to trick people into spending more of their money on
on, you know, things that don't make the world a richer place
overall. And it's like, that's just
dishonest and stupid on so many different levels.
One, you shouldn't be trying to trick people, and two, the thing
he's trying to trick people into doing doesn't make the world a
better place in the long term. And another, you know, my
favorite economist, I guess Murray Rothbard and anybody I
I'd recommend pick up anything by Murray Rothbard and read it.
But somebody asked him at some point.
He said, well, what do you think about, you know, John Maynard
Keynes? Like, I'm sorry, they asked John
Maynard Keynes. Well, isn't what you're
advocating. Won't that cause, like inflation
in the long run? And Keynes said in the long run
we're all dead. And Murray Rothbard, after
Keynes had already died, and this was in like the late 1970s
when we had, you know, super high inflation and like a
stagnant economy. Murray Rothbard said, well, now
Keynes is dead and we're all living in his long run.
And so like, I think that's really, really important to like
the the time preference that people have.
You should look at the bigger picture.
You know, maybe if I had, you know, took a whole bunch of coke
and hung out with a bunch of hookers, say I'd feel great
today. Maybe I wouldn't actually, but
like some people might, but that's not good for your long
term future. And so printing a whole bunch of
money right now today, maybe it'll feel good for the next,
you know, couple of weeks or months even or maybe even a
whole year. But in the long run, it's
incredibly destructive to human society and it's a power that
really, really needs to be taken away from government.
And that's why peer-to-peer electronic cash that people are
actually using in payments for commerce outside of the, you
know, the role of of government or outside of the government's
ability to control is such an incredibly powerful, wonderful
tool for the entire world. And if I can harp on, you know,
attack kings one more time too. Like what do you advocates
causes all sorts of inflation but governments love inflation
and. And I'm sorry, Friedman, Milton
Friedman pointed this out to me too.
And it just was such an eye opener for me as a young man, a
thing called bracket creep. And what bracket creep is, is
like, you know, in in America and Japan and most countries
around the world, they have what's called a graduated income
tax scale. And the more, you know, dollars
or yen or EUR you earn, the higher percentage of your income
you pay in taxes. Well, I'm, I'm 45 years old
today. When I was a young man earning
$100,000 a year was a really, really big salary that would put
you like in, you know, by far the highest, you know, tax
bracket rate Now in Silicon Valley, I don't know, $100,000
is somewhere close to, like, the starting wage for a lot of these
engineering jobs. And that's not because like
there's so much more, you know, productive.
It's because government has inflated the money over the
last, however many decades there.
And so like $100,000 today is maybe like, I don't know, you
know, 20 or $30,000 was when I was a young man.
And So what that does by causing the inflation.
Somebody, if you start, you know, $20,000 a year, maybe
you're in a, you know, 12% income tax bracket.
But now if you're earning $100,000 a year, that doesn't
buy anything more than, you know, 20,000 or $30,000 did a
couple decades ago. Now suddenly instead of paying
12% of your income in taxes, you're paying 35% of your income
in taxes. So you're paying a much higher
percentage of your income in taxes even though you don't have
any more buying power than people did historically.
So government loves to create inflation because year after
year it bumps people into higher income tax brackets and so the
government can collect more of their money that way as well.
So just like really detrimental to society, you know, every
which way and every which direction.
And Keynes really was a did a horrible disservice to the world
by trying to intellectually authorize governments to, you
know, engage in all this manipulation of the economy for
the things that governments want to do.
It's it's damaging. It's been damaging to all of
human society. Exactly.
And the General Theory is the book that Paul Krugman said was
even more important than Adam Smith's The Wealth of Nations.
Yes, he actually did say that. Rodger, you said, yeah, I could
be sipping a martini on a beach somewhere, but that's not nearly
as fun as promoting making the entire world a better place.
And that's about what cryptocurrencies have the
ability to do. How is that the case that
cryptocurrencies really have the ability to make the entire world
a better place? So it's it's kind of a lot of
people are familiar with the miracle of compound interest,
right? And it's like if you compound
your interest over a long enough period of time, after, you know,
a few decades, you're going to really have a lot of money and
the income's really going to be huge just from, you know, the
simple compounding of interest and the the rate of comp of
interest really makes a huge difference, right?
If you're earning, the difference between earning, you
know, 5% per year and 6% per year, from one year to the next
isn't that big of a difference. But from 1 decade to the next or
one century to next, it's a huge difference.
And so the same is true with the rate of economic growth around
the world, right? The difference of having, you
know, a 1% rate of economic growth from this year to the
next. Versus a 2% rate of economic
growth, isn't that big a difference from one single year?
So you earn $100,000 this year versus 101,000 next year if 1%
economic growth or or two, $102,000 if you had 2% economic
growth. But if you extend that over a
couple of decades or centuries for, you know, human
civilization, it makes a huge, huge, huge difference.
And so let's say government intervention in the economy has
only been retarding the rate of economic growth by a single
percent, which I think it's it's been significantly more than
that. But even if it's just a single
percent compound, that over the last couple of 100 years, we'd
already have colonies on Mars. We would have already cured all
sorts of diseases. We'd already have, you know,
solved, you know, world hunger. We'd we'd have solved so many
problems. Everybody's life would be so
much better off. It would be, you know, so much
more akin to, like, you know, what we saw in The Jetsons when
we were a kid in terms of the way people are living.
And instead, we have a lot of cool stuff, but we're nowhere
near where we would have been if we had just even a single
additional percentage point of economic growth over the last
couple of decades. So.
Steve, anything to add to that? How crypto currencies can make
the world a better place? Yeah.
Well, I agree with Roger that, you know, the more freedom of
choice that individuals have, the better off we all are at.
The freedom of choice is deeply related to economic growth.
So I I think cryptocurrencies offering us, offering everybody
on alternative currency that they can use to state money
could potentially make the world a radically better place.
I mean if you were to theorize about the most like powerful
inventions that you could possibly make to make people
wealthier off, that isn't like, you know the what do they call
that thing from Star Trek where you push the button and you get
whatever you want out, right? That might be the most yeah,
something like that. Right up there and near the top
of the list would be sound stable digital money for the
Internet that the government can't confiscate and maybe give
you privacy. I think you're you're you're
talking about one of the most potentially could be one of the
most powerful tools for making the world better.
Now. Ever.
Yeah, truly ever. The flip side of this though is
a little bit scary and it's relevant to the book, which is
one of the most terrifying inventions ever.
Could also be unsound digital currency that is issued by the
state and you have, you know, central bank digital currencies
where every transaction is monitored.
You don't have privacy that it's they can inflate the money
supply at will. That is very dystopian.
So like we were saying before, you know the the power of this
technology is great and it could be very, very good or very, very
bad. Roger, what are blocks and what
are the block size wars? The story of my the last decade
of my life there. So basically there's this word
everybody's heard of called the blockchain.
And a blockchain is just a real fancy name for an accounting
Ledger or a Ledger that keeps track of who owns what bitcoins
or what Bitcoin cash or whatever cryptocurrency, right?
And so on this block, this Ledger, right.
And a normal Ledger you have, you know, if you're running
QuickBooks or or whatever accounting software, you have a
copy of that Ledger on your computer.
And maybe you have, you know, one backup in in Dropbox or or
iCloud or whatever the the amazing invention of Bitcoin
there was instead of that Ledger being on one person's computer
that controls it, it's on everybody's computer that's
running the Bitcoin software. So now instead, they're just
being one copy and maybe one backup.
It's on thousands or 10s of thousands or even 100,000 plus,
you know, computers around the world have a full copy of this
Ledger and everybody's Ledger updates together exactly at the
same time In Sync with everybody's else's Ledger.
And that update to the Ledger that happens to everybody else
is called a new block on the blockchain and it's a new block
of data. It's just a new update to the
status of that Ledger, to who owns what and everything.
And when a Bitcoin initially launched, there was no limit to
the size of that update. The updates happened on average
every 10 minutes. But any amount of transactions
could be included in that new block on the blockchain.
So you could have, you know, a million people make a
transaction in 10 minutes. Boom.
That's now updated across everybody's copy of the the, the
accounting software called the blockchain for Bitcoin all over
the world. And then, I don't know a little
ways in, they realized, oh, you know, Bitcoin.
Bitcoin wasn't really worth anything.
Like like less than a penny. Maybe At this point, I'd have to
go back and check. Exactly.
And there wasn't really even a clear price at at that point, to
be honest. But they decided, oh, this could
potentially be a way where people could attack Bitcoin in
the short term if they just made a whole bunch of transactions
and there wasn't like any way to like not let them, you know,
flood everybody's computer hard drives for that.
So they decided to put in a temporary one MB limit just so
that people couldn't spam the network that way.
And then later on, what happened is that through censorship and
propaganda, that one MB block size limit that was always
intended to be removed. If Bitcoin ever became more
popular, more people started using it.
And that one MB limited Bitcoin to having about 2000 something
transactions every 10 minutes. They weaponized that into a tool
to trap Bitcoin. It's not being usable for
payments where you had to use a custodian, You had to get, you
know, permission from that custodian to do what you want
with your own money. And they tricked the entire
world into thinking that that one MB limit was a good thing.
And my background before I got involved in cryptocurrencies, I
was literally selling networking equipment that would be
transmitting the data for these, you know, block chains and for,
you know, everything on the Internet.
And I watched, you know, some of the, the first things I was
selling, you know, were like, you know, 2400 Baht modems was
my first modem. And that's that's so incredibly
slow. I don't know, I I I'd have to
get out of the, you know, calculator and do the math.
It would take something like an hour to download a single MB
with a 2400 baht connection and then you know today you know the
connection. I'm talking to you right now
here, I have a 10 Gigabit connection on the Internet here
and it costs like $30.00 a month to do that.
But I was telling you all the networking equipment to support
that and now you can get, you know, 100 Gigabit, you know,
hardware and even more. And I watched the prices for
this just plummet year after year after year.
And so for people to be fooled into thinking that one MB every
10 minutes is the right amount for for bitcoins block size to
be allowed to increase is just absolutely like it's it's just
like the Luddites in in England that were mad about the the you
know, weaving machines taking their jobs and breaking them and
saying, oh, we we don't, we don't want that sort of thing.
These people are literally destroying the tools that push
human civilization forward by limiting the block size to one
MB per block on Bitcoin, forcing everybody to have to use a
custodian, telling people it's not supposed to be used as a
medium of exchange. They're literally destroying the
things that are going to push all of human society forward in
in a in a faster, better direction.
And they don't realize it. Just like the people that are
out there advocating in favor of the minimum wage.
They're damaging and hurting the poorest people in society and
society as a whole. And you know some of them are
doing it on purpose, but others are just absolutely, you know,
just useful idiots that are, you know, drank the the the
censorship induced propaganda Kool-aid and they're out there,
you know, told the party line because that's what they've been
brainwashed into doing. And it's really sad and
frustrating to see that that's the case.
But that's why it's important for people to continue to speak
out and point out the minimum wage hurts poor people and hurts
society as a whole. And limiting the Bitcoin block
size to one MB hurt Bitcoin specifically, hurt the entire
Bitcoin ecosystem as a whole cryptocurrency ecosystem as a
whole, and hurt all of human civilization as a whole to the
point where and the Bitcoin maximus have loved to mock me
for this quote, but like, literally, babies are dying
because of this. And the people that mock me for
that are the ones that don't understand the economics, right?
Fewer babies die today at childbirth than 100 years ago.
The reason fewer babies die at childbirth today than 100 years
ago is because we have better technology today and more money
to spend on healthcare and more money to spend on doctors and
more money to spend on all of these things because
civilization has progressed and the rate of economic growth has
continued. Well, Bitcoin that works as
peer-to-peer electronic cash for the world is the best tool we
have to create more economic growth.
So if we have 1% economic growth this year versus 5% economic
growth this year, if we have 5% economic growth, fewer babies
are going to die next year because we'll have more
resources to devote to saving them at childbirth.
And so the people out there that mock the idea of babies are
dying because of this. They're just showing their
economic ignorance to the entire world for anybody who's paying
attention. And that's why cryptocurrencies
are so incredibly important, because it's literally the tool
to create more economic growth for the entire world, which
raises everybody up out of poverty and allows fewer babies
to die at childbirth, fewer people to die of starvation.
Everybody literally on the entire planet, from rich to poor
to young to old. Everybody has a better standard
of living because of more economic growth, and
cryptocurrencies that aren't crippled are the best tool we
have to enable that for the world.
Plus, shout out to AI as well, because that's really gonna be
an amazing multiplier of human ingenuity as well.
So I wanna say a couple things on that, just so people
understand when your questions about blocks and we're talking
about the size of the blocks being one MB.
No. No, that's fine.
That's that's fine. That was that was good and
important things to say. I just want to put in context
for people if they're unfamiliar.
This is the, the size of blocks is not within multiple orders of
magnitude reasonable for on Bitcoin.
So we're saying that, you know, the transactions get bundled
into blocks and then the Ledger gets updated with these blocks.
OK. If people are familiar with like
computers, one MB is itty, itty, bitty.
That is a fraction of what a picture of your phone on your
phone is in terms of size. Like if you take take your
average smartphone, it's going to be at least 4 megabytes a
photo all the way up to like, you know, way, way, way, way
larger than that. OK.
This, this, that that is, you know, one MB roughly of data
every 10 minutes produced on the Bitcoin network.
That is insane. That's not a little bit off.
That is crazy. It OK, so, so I want to get an
analogy. OK, so imagine we're talking
about cars and we're talking about like somebody's building a
new car and they're working on the gas tank.
And while they're working on the car, they don't want there to be
too much gas in the gas tank because maybe there will be a
spark and there will be an explosion.
And so they say, OK, here's the rule, While we're working on the
car, we can only put One Cup of gasoline in the tank.
That's it. No more.
OK, great. The agreement, the understanding
is, and when we're done working on the car, then you can fill
the gas tank up and it can go far.
So the analogy to Bitcoin is imagine now the they're done
working on the car and they say you can no longer you.
You cannot put more than One Cup of gas in the gas tank.
You'd say ever. You'd say, well, that's insane.
What do you mean a cup? That's nothing like we can't, it
can't go anywhere. We could barely even start this
thing with a cup of gas. That's crazy.
But that's effectively what happened to Bitcoin by capping
it at one MB blocks. It's like having a cup of gas in
your gas tank and and it's it. And the the creator of Bitcoin
could not have been clearer that the system was designed for
those blocks to be very large, arbitrarily large really as it
scales over time. So that would be an analogy to
just put in perspective, this isn't like a this isn't like
maybe it could be one MB or 8 megabytes like we are multiple
or you know it can easily be a GB.
There's already been blocks that have been produced on the what's
called the test net for Bitcoin cache, which is where people do
experiments. They've already successfully
produced GB blocks, which is 1000 times larger than one MB
blocks, so I figured that would be an important thing to add.
Yes, I know in the book I don't remember the exact numbers.
You actually use Visa and MasterCard as references for if
we want this free money, not free.
If we want something like a cryptocurrency that everyone can
use, well, we got to actually look at what people like Visa,
MasterCard, American Express are actually dealing with.
So if many people are expecting A1 MB block, do we have any
reference as to what American Express, Visa and MasterCard,
the amount of space that they use for transactions or PayPal?
Yeah, it it's increased over the years, but when Bitcoin first
came out, I believe that the average transaction throughput
through like Visa, MasterCard was something like 15,000
transactions a a second I think was the peak I I'd have to and
this is kind of old history at the moment.
I wasn't prepared with the exact data in front of me, but totally
doable right now. Today on Bitcoin or Bitcoin Cash
for a bunch of block chains, all they have to do is allow it to
do so. And the arguments, I guess it's
like a lot of these false arguments like in economics too,
where people say, oh, we need the minimum wage to to help poor
people. The result is the exact
opposite. It hurts the unskilled people in
the workplace. People told everybody, oh, we
need to limit the block size on Bitcoin to keep it censorship
resistant when the exact opposite is what wound up
happening. Now we have, you know, 10 years
of history to look back on. By limiting the block size on
Bitcoin, it forced everybody into using custodial platforms
where you have to do KYC for everything.
They can close your account, they can freeze your funds.
It made Bitcoin far, far more sensible, which is the exact
opposite of what they were claiming they were trying to
achieve. And so, like, as Milton Friedman
said, again too, we have to judge government programs by
their results, not their intentions.
And the same is true with limiting the block size on
Bitcoin. We have to judge it by its
results, not their intentions. Maybe their intention was to
keep Bitcoin decentralized and everybody would be able to be
able to do whatever they want. But the results were that it
made Bitcoin more sensible, more centralized, and easier for the
government to control. It looks like Steve may have
some some data. Ready for it?
Yes. I got my bike book in the mail
today. So to answer your question, the
running the back of the envelope calculations has been done by
Satoshi himself and by the other early developers and
entrepreneurs in the space. So So these are just back of the
envelope calculations here. But on page 58 it says if
Bitcoin processes roughly 4 transactions per second per MB
block, then that would mean 800 megabyte blocks equals around
3200 transactions per second, which ends up being 100 billion
transactions per year. So 100 there's your and it can
go up from there. But 800 megabyte blocks to get
100 billion transactions is not, remember 800 megabyte blocks on
average every 10 minutes. There are other other
calculations later in the chapter where that's literally
less data than streaming, like an HD video from Netflix.
So when the calculations were run, a lot of these calculations
were run. We're talking like 20/10/2011
where you didn't even have Google Fiber, hadn't been rolled
out anywhere, nobody was streaming HD videos over the
Internet. So just not only did the
calculations even make sense back then, but in today's terms
it's it's very clear it can we can scale on chain you know more
than 1000 fold without really any issue.
Rodger What was the Bitcoin fork of 2017?
So there have been you know this brewing disagreement within
Bitcoin and and initially I, I I was on the fence and the the
disagreement was like small blocks versus big blocks.
Do we continue on the path that Bitcoin was laid out by Satoshi
which was just let the blocks get as big as they need to be so
they can become peer-to-peer electronic cash for the world or
should we limit the block size of Bitcoin to try and keep it
more You know, censorship resistant was was the claim from
the other side and my heart was on the big block side because
that seemed to make the most sense to me.
But I also wanted to keep an open mind and maybe I would
learn something new and and and and you know I I'm always trying
to learn new things every single day.
And so, like, I just wanted to listen to the arguments from
both sides and and hear what everybody wanted to, you know,
what what the arguments were on both sides.
And I would decide for myself. And then I saw that almost, you
know, the, the vast majority of the people on the small block
side suddenly started doing everything they possibly could
not to argue. Their positions went to censor
the people on the big block side and they would delete their
posts and and do everything they could.
It was, you know, kind of a a precursor to the a lot of the
cancel culture we have today. They did everything they could
to censor the other side of the debate.
And that was what made me make up my mind and say, OK, well, I
already thought that big blocks made more sense.
And now I see the small block people trying to censor free
speech on the big block side. Well, of course I'm a big
blocker now. And of course I, of course I
support free speech. So of course I'm going to go and
speak out now. And so I did, you know, I had, I
bought bitcoin.com early on. I, you know, I had was the first
person in the world to start investing in this ecosystem.
I had a big number of bitcoins. Of course, it made sense to
support the side that supported free speech because it was also
the same side that was supporting, you know, using
Bitcoin as in commerce because it would increase the rate of
economic growth around the world.
It was the IT was the side that made sense.
And if you support free speech, you kind of had to be a big
blocker. And if you support free speech
and you're a small blocker, you're you're kind of a
hypocrite at at this point because they've done, to this
very day, they're, you know, still trying to cancel anybody
they possibly can in regards to, you know, advocating for just
even being able to talk about these ideas in Bitcoin.
So if you're opposed to people being able to even talk about
ideas, you're an enemy of the progress of human civilization,
right? Like here, here with without,
without exaggeration. You really are.
You're an enemy to the progress of human civilization if you're
opposed to free speech. So another few points to add
here. The fork occurred in 2017 and it
was actually a backup plan. So what the biggest miner in the
world at the time was planning on having was how how to
summarize without going in too much to the weeds here, they
were trying to upgrade the network in a non dramatic way.
But the Bitcoin Core developers had acted in bad faith many,
many times and so this these miners had a backup plan and
they said OK, if the developers don't come through again, then
we have to scale Bitcoin somehow.
So we're going to fork off and make a chain, a secondary chain,
just in case they don't follow through.
And that secondary chain is called Bitcoin Cash.
That's where Bitcoin Cash comes from.
It was, it was made as a backup plan in case the core developers
didn't come through, which they didn't.
So after that the attempted non dramatic upgrade failed, a whole
bunch of people switched over to Bitcoin Cash.
A lot of the old entrepreneurs and some of the biggest
businesses said OK, well this the Bitcoin Core chain is no
longer promising because they're going to have this one MB block
size seems forever and that doesn't make any sense.
And so the other, the other best option at the time seemed like
Bitcoin Cash because that was scaling according to the
original design of Satoshi Nakamoto and and Roger, I mean,
you're obviously maybe the most connected person in Bitcoin
ever. When you were talking to
different companies and businesses, what percentage of,
let's say, the CE OS that you would talk with were in support
of bigger blocks? And what percentage were, what
percentage were expressing frustration to you at the core
developers that they really were failing at their jobs?
Almost all of them, with the only exceptions being the
businesses that didn't really have any traction, so they
didn't have any customers that were trying to transact on
chain. So like certainly Coinbase,
certainly BitPay, certainly blockchain.com, certainly you
know, bitco.com. And at that point too, like
those businesses and zappo.com at the time those businesses
probably accounted for, you know, combined, I don't know 90
plus percent of the the transactions on Bitcoin at that
point, like I'm overwhelming support for that.
And I I want to thank you for for two things there, Steve,
actually like or one was like thank you for answering the
question that Keith asked me because I got sidetracked and
and didn't answer it. So I apologize.
I'm so glad I have you here to answer the questions.
And two, I want to point out to the world because it just gets
misreported over and over and over again.
I love Bitcoin Cash. Bitcoin Cash is great, but I had
absolutely zero to do with the creation of Bitcoin Cash.
I had nothing to do with it. It's reported over and over and
over again that I'm the creator and the founder of Bitcoin Cash.
I had nothing to do with it. Bitcoin Cash forked off and I
still had nothing to do with it for months and months and
months. It wasn't told the very final
last straw, that these Bitcoin Core developers reneged on their
promise to the entire Bitcoin industry to allow Bitcoin to
scale to be money for the world. And they reneged on this thing
that was called the SegWit 2X agreement.
And when they reneged on that one again, you know, because
they had reneged over and over and over up to that point, that
was the final straw for myself and a bunch of different people.
And so I looked at all the other block chains that were out there
and I thought, OK, which one has the best chance of becoming
peer-to-peer electronic cash for the world?
That's outside of the ability of governance to control?
And I I think that there were probably three 3 1/2 contenders
on my radar at that point for that.
There was Ethereum was interesting, Monero was
interesting, and Bitcoin Cash was interesting, and I think
that they were all pretty good contenders.
I was scared of Monero being that role because Monero is so
incredibly good right out of the gate that, like, governments
have been opposed to it right out of the gate.
So I'm recording this from here in Japan.
Monero and other privacy coins are not allowed to be listed on
any Japanese exchange. They're not allowed on any
Korean exchange. They're not allowed on any
Singaporean exchange. There's all sorts of countries
all over the world that'll let people trade Bitcoin all day
long, or Bitcoin Cash and a number of other coins, but not
Monero or other privacy coins because they're so good.
And so that made it seem like Monero would be an uphill battle
to become money for the world. Even though Bitcoin Cash or
Bitcoin with bigger blocks, you can have awesome privacy
available to you on it without scaring governments right out of
the gate. And Ethereum also, you know,
seemed very interesting and lots has happened there.
But in addition that I owned bitcoin.com, it seemed like a
really powerful tool to use because that Bitcoin brand is
incredibly powerful there. And so again, I just want to
clarify, I had nothing to do with the creation of Bitcoin
Cash, yet everybody today says that I did.
And the reality is I probably did a heck of a lot more
spreading Bitcoin BTC to the world early on than I did with
with Bitcoin Cash later on. So just want to clarify that and
thank you Steve for answering the questions earlier And I I
got distracted and went off on an well.
It's also worth noting to the the small blockers or the BTC
guys are are actually explicit in wanting to rewrite history.
There's a part, I don't know if you've got a chance to read the
book yet, Keith, but there's a part in the book that's
literally shocking. Where some of the biggest names
in BTC, the most influential people, are pseudonymous.
There's this guy named Themos and this other guy named Cobra,
and I don't know who they are. I don't know what their personal
identities are, but they between the two of them they end up
owning the most important discussion platforms in the
world. There's a website
calledbitcointalk.org which is the I think that is the the most
popular and also the R slash Bitcoin subreddit as well as the
Bitcoin wiki Bitcoin dot IT. So there's just two people that
own the most important discussion platforms in the
world and have for a very long time.
And they what, there's some explicit exchanges they have
with one another where they say, and I'm, I'm only roughly
paraphrasing, you know, I've noticed a lot of newcomers in
Bitcoin are confused about the purpose of Bitcoin.
And I think the reason for this confusion is the white paper
that Satoshi Nakamoto wrote. So I think what we need to do is
make a new white paper, call that the Bitcoin white paper and
update it so people aren't confused.
So these are, this is an explicit conversation that they
had. It's like recorded there's a
citation you can go, you can look at this exchange.
So I I bring that up to say they are open about their information
management, their information control and they are good at
rewriting history and smear campaigns.
So Roger has been for a long time the subject of a lot of
smear campaigns, some of which are particularly nasty, that I'm
sure you can talk about if you want to.
You know, there's this idea that he's a Bitcoin Judas, he
betrayed Bitcoin, or he was trying to pass off BTC as or
passive BCH, just the real Bitcoin.
And it's only BTC that's so awful.
Well, people don't realize, especially if didn't live
through it, there was a period of time where it was not clear
what would be called Bitcoin, and for very good reasons.
We go into it in the book, we explain some of the reasons why
this makes a lot of sense. You don't want to just say
whatever the Bitcoin Core software produces is Bitcoin
because that means the Bitcoin Core developers have captured
Bitcoin. So at the time when we were
talking 2017 around this, the time of the split, it was not
clear I think to anybody who was going to win.
Was it going to be the Bitcoin Cash fork or was it going to be
what people call Bitcoin now? BTC and notable, we had a couple
of prominent people like Gavin Andreessen, who was the the heir
of Satoshi, the person managing the Bitcoin software project.
After Satoshi left, he said that again, it's a quote in the book,
something like Bitcoin Cash is what I is the project that I got
involved with at the beginning. It's a store of value and a
medium of exchange. There's a quote from Metallic
Buter and also saying he can. At the time he considered
Bitcoin Cash a legitimate contender for the name Bitcoin.
So despite what the history rewriters want to say, it was
actually very much on the table who was going to win this fight
between the small blockers and the big blockers.
Roger, do you want to bring any more?
Yeah, there was actually a time where it looked like the big
block side was going to win. Actually, there were more minor
signaling for the big block side of Bitcoin, and it looked like
what is called Bitcoin Cash today would wind up becoming
Bitcoin. And then unfortunately, one
software bug was found in one of the main node implementations
for the big block version. And that caused a bunch more
drama and gave like a, you know, a wedge that the small blockers
could use to attack and say, oh, the Bitcoin and the big block
developers aren't as competent. And look at this mistake they
made. And then never mind the fact
that a bit later one of the big block developers literally found
an inflation bug in the BTC one MB version of the the software
code. And that's about the most
catastrophic type of bug you could possibly have.
Meaning that anybody could have produced a a trillion bitcoins
on the network. And the really interesting part
about it too is that the guy that wrote the the bug and I use
that in air quotes, the guy that introduced the bug into the
Bitcoin software there that could allow anybody to create
any number of bitcoins is literally a guy that was calling
for the US government to like you know ban Bitcoin cash and
ban big block Bitcoin. He sent a letter to I think it
was the Federal Trade Commission or something saying that you
have to make Bitcoin cash illegal.
So this is absolutely the opposite of somebody who
supports free markets. It's a guy with blue hair and
lives in San Francisco like about the the most
stereotypical, like non libertarian free market type of
guy you can get who's calling for the federal government to
ban Bitcoin cash. That's the guy who implemented
this, the most serious type of bug you could have in Bitcoin.
And the guy that discovered it said, you know I don't have any
proof, but I can't help but feel the way that this was introduced
and integrated into into the code there.
I can't help but feel like it was done on purpose, right?
He doesn't have proof, but like, this is the the guy that
discovered it says he really feels like it was introduced,
you know, on purpose. And it's like that would have
been almost the end of Bitcoin. It would have been, you know, a
huge, huge, huge set back for cryptocurrency in general about
years and years and years if an infinite inflation bug had been
exploited. And the big blocker who found
that dagger, I believe was his screen name, rather than exploit
it and use it to attack BTC and and weaponize it against the
small blockers, he told them quietly and secretly said, hey,
you guys better fix this. And they did.
And I don't have proof, but I'm, I'm very confident in my heart
of hearts, if the bug had been on the big block side and the
small blockers had noticed it, they would have exploited it and
used it to destroy the entire big block chain of Bitcoin and
destroy this, you know, tool to bring more economic freedom to
the world. I'm.
I'm very confident that they would have.
So something very relevant to a libertarian podcast here is
again, there's more quotes in the book.
If you want to lose respect, if you're a libertarian and you're
listening and you want to lose respect for the BTC people, you
got to look at some of the quotes in the book of when this
fork happened. They were.
It wasn't just this one Matt Corallo guy.
It was other people from the affiliated companies, Block
Stream being primary among them, the small blockers who are like
tagging the F at the SEC on Twitter saying hey is did you
did, did they get prior written permission from you to do this
fork. There's there's multiple quotes
in there of them tagging multiple government agencies to
try to get them to effectively regulate BCH out of existence.
That was the that was The Dirty tactic that they were playing.
One of many dirty tactics. Unbelievable, especially after
what the SEC did to Jeremy Kaufman and Library.
Not to mention even people like Ian Friedman getting kidnapped
by the state for daring to use a ATM without the mass murdering
government's permission. And actually I want to add to
that, very brief, if you don't mind.
So like Ian Freeman's the person that I heard about Bitcoin from,
I had been listening to Freetalk Live for years and years and
years. Ian Freeman, for those who know,
was the radio host on a radio program called Freetalk Live on
more than 100 radio stations across the the country.
Gavin Andreessen, the intellectual heir to to Satoshi,
the guy that Satoshi turned the project over to, contacted Ian
and said, hey, you guys need to learn about this Bitcoin thing.
They had lunch with with Gavin. Gavin told them all about it and
then they started talking about on their radio show.
That's where I heard about it. And I was already sponsoring
them with my other company just because I wanted to support
giving, you know, these libertarian ideas out.
And I said, OK, we're, I was paying them dollars at that
point. So we're going to pay you in
Bitcoin at this point. We're going to change all of my
ads from my company to promoting Bitcoin to the world.
That was the start of of Bitcoin getting promoted to the world.
And this guy, I believe he got sentenced to 8 years in federal
prison for running a Bitcoin, you know, cryptocurrency ATM
machine there in New Hampshire. And he didn't get the, you know,
whatever money transmitter license these people that he's
never met and that know nothing about him.
Like absolute stranger said he has to get their permission to
run a Bitcoin ATM machine in New Hampshire.
And so now they've passed him in jail for eight years for simply,
you know, making the world a better place.
And it's just a absolute shame. So, you know, I, I wish more
people would speak out for Ian Freeman because you know, a lot
of people over the years called me, you know, Bitcoin.
Jesus, I don't know. I I heard about it from Ian
Freeman. So Ian, you know, thank you,
Ian. And and the world appreciates
you and it's an absolute shame what the government's done to
you. But who is it?
Some dictator said one man's injustice is a travesty, but 100
million is just a statistic or something like that.
Well. I think that was Tony Fauci.
Well, the same is true with Ian Freeman.
But the US government, they're doing this to millions of
people, right? It's not just the end and it's
just really needs to come to a stop.
And people don't realize cryptocurrency is such a
powerful, powerful tool to put an end to that sort of thing.
And that's why, you know, here I am coming up on 15 years later
after having first gotten involved still, you know,
shouting from the rooftops about cryptocurrencies being this tool
to promote more economic freedom to the world and strip away
government's power and. Also, people don't realize the
the cryptocurrency world as it is today, actually in many, many
ways, is a worse experience than it was in 2013.
Not just because the transaction fees are higher, but also the
government hounded a bunch of entrepreneurs out of the space.
I remember my wife was working at BitPay early on, and so I was
talking to the people there. This is the biggest Bitcoin
payment processor in the world. And they were, you know, they
were very ideologically aligned as well, very like hardcore
libertarians, many of them. And they had a bunch of amazing
ideas that could have been, that could have taken over the world,
you know, in 2013 or 2014, but they couldn't implement them
because of the state. And, you know, banking, getting
involved in the banking system is incredibly difficult,
incredibly expensive. And so, you know, the crypt.
The whole cryptocurrency world, not just Bitcoin, is a tiny
little fraction of as awesome as it could be if we didn't have,
you know, massive state intervention in this industry.
I mentioned that. This was actually a decision to
keep the block small. Who are the people making this
decision? So I I think, I don't know if I
had to choose one single person that probably had the biggest
impact there was the John Dilly guy that was contacting Peter
Peter Todd and paying him to put out the small block propaganda.
Do you want, if you had to choose a single person would be
him or Adam back or Greg Maxwell.
Who who would you choose? Steve, I'm here, so for me, I
would choose. Greg Maxwell, I think he had the
most influence over the people that were making the the the
developer culture I feel like was set by Greg Maxwell.
A lot of the ideas were set by Greg Maxwell.
Or maybe And what is? And what is their?
Incentive. What is their incentive?
To keep the block small, so in the in the case.
Of block stream. They were literally selling a
product that would compete directly with Bitcoin.
So you you gotta explain what block Stream is, yeah?
I'm sorry. So Blockstream was a company
that? Raised a bunch of venture
capital and then hired up a bunch of the Bitcoin developers,
most of which or many of which previously were in favor of
raising the block size. They then came out with this
product called Liquid, which is basically like a competing
blockchain with Bitcoin, but it's permissioned and not
censorship resistant and doesn't have any of these like same sort
of wonderful characteristics that Bitcoin did.
And then they intentionally strangled the transactions on
bitcoins that Bitcoin transactions by their
intentional design and their open admission.
Like it sounds so crazy but I've been, you know, you you can go
and listen in their very own words, they intentionally made
Bitcoin transactions slow, expensive and unreliable and
then told everybody, oh, you think Bitcoin transactions are
slow, expensive and unreliable. They were always supposed to be
that way. So as a solution, you should use
our product that we'll charge you to use and we collect all
the fees for everybody that uses it.
So it would be like if I, you know, owned a a factory that
made wheelchairs and I took my baseball bat and went out there
and started whacking people in the legs right and left so they
can't walk anymore and say, hey, I have these wheelchairs for
sale, Look at what a great guy I am.
If it wasn't for me, you wouldn't be able to get around.
Good thing I made this wheelchair for you to use.
That's exactly what these guys did to Bitcoin.
Without exaggeration, yes. And then you said and don't.
Worry, I'm. Working on a lightning
wheelchair that will eventually get you everywhere in no time at
all. It'll be out in 18 months.
In 18 months, exactly. So, so I want to use a term I I,
I recently did an interview on the Todd Woods show and he he
had a turn of phrase I thought was really good and it's very
relevant to this. We were talking about nutrition
science. And he, he had previously spoken
with somebody who had said that essentially like cereal
companies were paying to produce research that was saying
breakfast is the most important meal of the day so that they
could, like, sell more cereal, which is funny.
But he used the term he said it's like it.
They're cartoonish. It's like a cartoon villain to
think it sounds, it sounds like a cartoon.
Oh, you're telling me Big cereal is financing the scientists to
produce this information that says breakfast is the most
important meal of the day so they can sell more bran flakes?
Like, it sounds silly, but that's actually true.
And that's that is the level of conflict of interest that we
have in Bitcoin. It sounds cartoonish The the
this company Blockstream hired the most important Bitcoin Core
developers at the most important time in Bitcoin's history and
they are the reason that blocks were capped at one MB and they
are the reason why fees shot up to two dollars $5.10 dollars
$100 and they $1000 sometimes. Depending if they're complex.
Transactions and the CEO of that company that employs the Bitcoin
Core developers literally are selling their own proprietary
side chain as a solution to high fees on Bitcoin.
You can't make it up. I mean, they're explicit about
it, and it just it feels cartoonish to even say, but it's
documented in the book well, I can't help but think of.
Tony Fauci using the Eco Health Alliance to fund gain of
function research at the Wuhan lab of Virology and then coming
out with a vaccine. It's so ridiculous.
Or just as the military industrial complex, it's widely
accepted that they will actively advocate for something that is
terrible for so many people because they have a vested
interest and they can benefit at the expense of so many other
people. All right, so we got through why
the blocks are intentionally small.
The incentive is to increase transaction fees so they can
make more money. I love what you guys did in the
book. Where you actually listed.
Here is what we Here are the five criteria that will know
something is Bitcoin and when it's not.
Just like calling something the Patriot Act doesn't make it
patriotic. Calling it Bitcoin doesn't make
it that when you lose all of its, you know, vitally important
aspects. So you start with the fact that
it's the white papers titled A peer-to-peer cash system.
What's the type of peer-to-peer electronic cash system?
A peer-to-peer electronic cash system.
I've heard about Bitcoin so many times and it was never described
to me as that. It was always described to me as
a store of value for you to invest funds in.
And I watched a lot of, say, Michael Saylor videos.
I don't mean to throw anyone under, but it seems like this is
just, it seemed like it was just an investment strategy.
It never occurred to me to actually look at the origin and
see that it was peer-to-peer. So Rodger, please walk me
through what does Bitcoin Cash have that Bitcoin does not and
why people should go to Bitcoin Cash as opposed to what you call
Bitcoin Core. Well, first of all, maybe we
should cover the. Things that Bitcoin Cash and
Bitcoin both share, right? They both share the same genesis
block in the beginning of the blockchain.
They both share that, You know, they were both created by
Satoshi Nakamoto originally. But what they don't share is
this. And they used to share it right
the same everything up until the split happened, right?
What they don't share any longer is the fast, cheap, reliable
payments for anybody to use anywhere, anytime, for any
amount, anywhere in the world. Bitcoin had that back from its
founding up until 2015 ish, and then they both lost it for a
bit. And then in 2017, when that one
single version of Bitcoin split back into into two versions, the
Bitcoin Cash version then restored those fast, cheap,
reliable payments for the entire world.
And they also both have the same limited supply.
They're both limited to 21 million coins.
So Bitcoin and Bitcoin Cash are both equally scarce.
They have the exact same scarcity.
Bitcoin Cash, you can argue, is more decentralized than Bitcoin
at this point and has more censorship resistance than
Bitcoin. And it works for payments.
So the only thing that Bitcoin has is that Bitcoin Cash doesn't
is the cool Bitcoin name and the cool BTC ticker symbol.
And so the only reason Bitcoin BTC is still number one in the
world today is because of incumbency, not because of any
inherent merit in itself. And like, that's a quote from
the book there, but it's so. It's so true, right?
Bitcoin is still #1 because it has the cool name, not because
it does anything actually cool or useful for the world at this
point. And the Michael Sailors of the
world, like, wow, you know, he's a black belt in techno Babble.
He talks about an, you know, encrypted cyber Hornets of pure
energy traveling at the speed of light and like, OK, that sounds
cool, but what does it even mean?
And I I'd love to ask him at some point, like, I think he's
scared to ever even have a discussion with me about this.
Why didn't you believe in Bitcoin early on?
You knew about it for years and years and years and you mocked
people that believed in it And then suddenly now you know,
Johnny, come lately, now you're interested in it while you're
promoting something that wasn't even the original peer-to-peer
electronic cash version of Bitcoin to begin with.
And you're saying, oh, there's never going to be 21 million
Bitcoin more than that. And it's the only one.
There is no #2 this and that. Like, well, I'm sure Myspace
could have said there is no #2 social network where we have
everybody. Everybody's right here.
Well, when the user experience gets bad enough, people leave.
And so like Bitcoin still has a big network effect.
It has the cool name, but the user experience is horrible.
It's censorable. Everybody's busy using a
custodian platform. I think maybe when the big giant
government seizure of everybody using a custodian, you know,
platform account somewhere comes maybe that'll be the really big
wake up call for people to realize, oh, Bitcoin isn't this
tool for economic freedom after all, Bitcoin got turned upside
down into a tool for economic oppression.
And. And that's why I'm really a big
fan of things. I like Bitcoin Cash.
But again, I had nothing to do with the creation of Bitcoin
Cash. But I'll tell you what, I did
have something to do with the creation of one, you know,
kicking off Bitcoin into the entire world.
I absolutely was a Co creator of Ripple.
I was a Co creator of what Z Coin was just now called the
Furo. I helped put up the seed money
for Z Cash. I helped put up the seed money
for a whole bunch of coins and helped kick off a whole bunch of
other things. But Bitcoin Cash was not one of
them. And so I've never, ever, ever
been a Bitcoin Cash maximalist. I was never a Bitcoin
maximalist. I was never anything other than
a tools to bring more economic freedom to the entire world and
empower individuals to have more control over their own lives.
Maximalist. And so any tool that enables
that, I'm going to be out there supporting and cheering for it.
And anything that's been morphed into a tool for economic
oppression, like I really fear BTC is being morphed into at
this point with everyone having to use a custodian.
I'm going to be cautioning people about that as well.
So don't use the US dollar. And don't use cryptocurrencies
that force you to use a custodian because you can't
transact for them directly because of the slow, expensive,
unreliable transactions that were intentionally introduced by
a bunch of, you know, software engineers that get paid to
cripple Bitcoin. Yeah, and you know, coming back
to. Economic concepts Here, there's
a There's a critical relationship between information
and prices, and so I think people would be people look at
the price of BTC and they go, there's no way it's that bad.
Surely we're exaggerating. Surely the experts have figured
this out like it can scale in some other way.
And I think people would be will be utterly floored to learn just
how bad many of the ideas in BTC are because the price is is so
high they just assume it was settled.
And so my, I mean I'm not going to make, I'm not going to dare
make any you know price predictions in the future
because that's not what you do in crypto.
All I can say is this as information changes prices will
adjust. And I know from talking with
people I know Roger knows this and it sounds like you have some
experience with this keep. People really don't have good
information about what's going on in Bitcoin and
cryptocurrencies right now. Lots of people are talking about
crypto and they're excited. They're talking about Bitcoin
and they're excited. But the average understanding is
abysmal about the basics, about the absolute fundamentals.
What is the purpose of this technology?
What is the basic structure of how this thing works?
You know is there any realistic way to get transaction fees
down? Like can this be a store of
value without being a medium of exchange?
There's no there's almost no understanding of this, even by
people like Michael Saylor. When I.
When I when I plug my ears and I, you know, hold my nose and
try to listen to him, I don't think he understands the basics.
We in the book, we have many quotes by Saifa, Dean and Moose
who wrote the Bitcoin Standard, and I don't think he understands
the basics, right. This is a guy who's written the
most popular Bitcoin book out there so far, so far.
Go ahead on over to. Hijackingbitcoin.com right now
you can help change that. Buy a copy.
Well, exactly. He, and you know, he travels all
over the world talking to people.
This is surely the expert. Chapter 7 is a refutation of
Seifidine's perspective. He makes simply, frankly, basic
blunders about the scaling capacity of this technology and
basic blunders about, you know, Bitcoin Cash, which he
criticizes. He he does not understand the
basics. So, so my I I say, I say that
because prices and information have a very tight link and it is
definitely the case that the information quality in
cryptocurrency is abysmal right now and hopefully this book will
help correct that a bit. Awesome.
So of. Course everyone should check out
Hijacking Bitcoin, The Hidden History of BTC.
But also assume that you have completely convinced people that
All right, I was wrong about Bitcoin.
I shouldn't have watched so many of those sailor videos.
And I want to get into Bitcoin cash cuz I actually want a
peer-to-peer electronic cash system as opposed to a store of
value. Roger.
Where? Where do I get started?
Yeah, of course bitcoin.com is. A fantastic place to get
started, you know, started and founded by by Anarcho Capitalist
right from day one. Sorry for the call.
Coming in. Another place though you can go
would be blockchain.com, right? Another company I Co founded.
Let me hang up on this guy. So sorry, people are persistent
in calling me when I'm here. Another place you can go would
be coinbase.com, also founded by somebody with a profound respect
and admiration for the free market and the benefits brought
by economic freedom. So basically, any place you're
already using crypto currencies with will already support
Bitcoin Cash, right? It was right there from day one.
And the reason they all support Bitcoin Cash already is because
almost everybody in the entire ecosystem in the split happened
philosophically. They were on the big block side
because they knew that's what this we need to do in order for
this to scale to be money for the entire world.
So a lot of people then started focusing more on you know,
Ethereum or or or somewhere Bitcoin Cash or some other
chains out there. A lot of people don't know this.
Avalanche for example, the avalanche chain and the
avalanche that was born out of the Bitcoin Cash community,
those were all big block Bitcoin supporters that then went and
created avalanche as well. Another one, I think it's a top
ten coin or certainly top 20 coin at the moment as well.
So there's all sorts of these things that spun off when
Bitcoin that had such amazing first mover advantage and had a
great user experience. Nowadays, when it was
intentionally crippled and destroyed, people forked off
these other chains. So of course, you know basically
anywhere is a great place to get started with Bitcoin Cash if you
already have a wall. But the bitcoin.com wallet?
I'm I'm Tooting my own horn here a little bit, but for sending
and receiving transactions, not just Bitcoin Cash but for
anything, I think it's the best wallet out there.
It is so smooth and so slick and so easy to use and you can send
Bitcoin cash to all your friends even if they don't have a
bitcoin.com wallet yet. There's this feature called Send
a shareable link and send feature there for Bitcoin Cash
where you can send anywhere that you can share a link.
So Facebook, Instagram, you know, Telegram, e-mail, text
message to someone's phone number and if they don't already
have the wallet, it doesn't matter.
It automatically downloads it from the App Store for them and
the money will be right there in their wallet when the app is
done downloading. It's really an amazing, powerful
tool. And if you really want to
trigger a ABTC Maxima small blocker at this point, ask them
Hey, how could you send me $5 worth of of Bitcoin on Lightning
Network without me having to be online, right?
Without me having to have my computer or my phone be online?
Can you do that? Of course with Bitcoin Cash you
can do that. The person doesn't have to come
online for the next couple of years and it's not a problem
with Bitcoin BTC, Lightning Network?
Impossible. There is no way for them to
receive payments without being online unless they use a
custodian platform. And if they're using a custodian
platform, the person's not receiving Bitcoin, their
custodians receiving the Bitcoin for them, which means it's
completely sensible. Means you have a third party,
which defeats the entire point that was pointed out in the
Bitcoin white papers. peer-to-peer Electronic Cash
Transactions without Requiring a Third party.
Lightning requires a third party to receive transactions if
you're not online yourself, no if ands or buts about it.
So it cannot compete with a Bitcoin point cash in that that
that manner at all. So if you really want to push a
a Lightning Fanboys button, say hey, how can I receive a payment
without using a custodian if my if my phone's not online or if
my phone's out of battery or if I didn't even you know?
In any case, if you're not online, you can't receive a
Lightning payment without using and it should be noted that.
If you're using Lightning and you lose your Internet
connection, there is a risk that you could lose funds which has
happened, not just move funds. You could have your funds stolen
and. And sent back to somebody else.
Yeah, that's what that's Yeah, right.
That's a better way of putting. It and there is a whole chapter.
Oh sorry, just let me complete that thought.
There is a whole chapter, Chapter 9 in Hijacking Bitcoin
where we talk about the Lightning Network and it's very
deep problems. Yeah, I love the.
Interface on this every other time that I have been asked to
get into Bitcoin. It seems so complicated and I
got the the first time I saw that long address.
I go, all right, I'll, I'll, I'll write that down eventually
and I I don't know what to do. But it took like 30 seconds for
me to download this wallet from bitcoin.com.
Put my e-mail in now. OK, so say that I get money
here. Why is this safer than PayPal?
Or what are the main things I need to know once I've
downloaded the wallet? So I I think that's one of the
biggest. Problems, I guess in
cryptocurrency there too. Or, or I don't maybe lies.
Like there's so many apps out there that call themselves
wallets that aren't. And it's like one example of
this, like Wallet of Satoshi. Satoshi, if he had a shotgun,
he'd probably be ready to shoot the person that's doing that
disservice out there. Like Wallet of Satoshi is not
made by Satoshi. That's a new Satoshi and it's
not a wallet. It's an account, right?
Somebody else is holding the funds for you.
Just like with PayPal. PayPal is not a wallet, it's an
account, right? So like I, I don't have a
physical wallet near me or I'd show you, but it's like the
difference between having a physical wallet with pieces of
paper in your pocket where you have those bills and you're in
control. Or it's like when you deposit an
account is when you deposit those pieces of paper with Bank
of America or you know, PayPal or somebody else and they're
holding it for you. If it's deposited in the bank,
the bank at any time can go out of business.
They can refuse to give you your money.
The government can tell them to give the government your money.
You know it's not your money anymore.
You're trusting somebody else with the bitcoin.com wallet or
any other real wallet out there. You have control, and there's
not a single person in the entire world that can freeze
your account or block you from moving your funds.
And so that's a really, really, really important difference.
And that's the big problem with these small blocks on bitcoins
that forced everybody to use accounts.
And even though they're still calling those accounts wallets,
they're not wallets. They're accounts.
And that's a very big, big, big, big difference.
And the bitcoin.com wallet is a real wallet where you're in
control. And even if the US government or
anybody else came to bitcoin.com and said, hey, I want you to
freeze Keith's, you know, cryptocurrency in this
bitcoin.com wallet or send it to us or whatever, we don't have
the ability to, we can't even do it because it's not an account,
It's a wallet. So make sure you understand the
difference between a wallet and an account.
But actually, with that, you know, great freedom comes great
responsibility. Make sure you've securely backed
up your wallet. In fact, the guy that was just
calling me a moment ago and I had to turn off that app
altogether, he's calling me because he lost his wallet.
He's still, he needs some help restoring a really old wallet
with a he has a seat. And like, the really funny part
is people like to joke about, oh, I lost my cryptocurrency in
a boating accident. No joke.
This guy dropped his phone off the side of the boat in the
ocean while he was fishing and lost his wallet.
He really didn't. He had quite a bit of crypto.
So he needs my help to get it back there.
So with that great freedom comes great responsibility.
Make a backup of your wallet, the backups, really easy.
It's just 12 words you can write down with a pen and paper and
put somewhere, put in a safety deposit box.
But anybody that gets access to those 12 words can then access
your money. So it's important though that
you have that put somewhere safe and then nobody in the entire
world can mess with your money. It's really a a powerful tool.
And again, the bitcoin.com was founded by an analytical
capitalist Murray Rothbard fan, and the current CEO bitcoin.com
and other, you know, he calls himself an ancap as well.
So we haven't taken a single penny of outside venture capital
money at all. Like, we're still there day in
and day out, building the tools to enable more economic freedom
for the world. And so I invite everybody to go
and give that to app a try. It really is the best app for
sending and receiving cryptocurrency.
It's not the best app for buying or selling cryptocurrency yet,
but we're working on that part of it.
But it's certainly the best for sending and receiving.
All right, so can I get the instructions on?
Here on how to back it up. Yeah, it's as you download it'll
start. Nagging you gently to to make a
backup and it'll show you your 12 words.
It'll let you back it up to iCloud with a password or to
your Google Drive with a password.
It it's a pretty smooth app, so give it a try.
And that's why we have more than 20 million installs of that app
at this point and more than a million monthly active users.
So that's some real numbers. We've moved the needle in terms
of people that now have access to tools that give them more
economic freedom in the world. And it's also interesting to see
like we've done zero marketing and 0 promotion in Nigeria.
But Nigeria is one of the countries that we really have
just so many users of this app. It's really incredible and
clearly they they like and appreciate and are enjoying it.
All right, awesome. Check out.
Hijackingbitcoin.com for the book.
Once that convinces you, check out bitcoin.com as well.
What I love about Roger's style is just how empirical he is.
So when he's having a conversation, he'll be like, Oh
well, you know, it doesn't cost that much.
He goes, OK, well let's look it up.
In fact, send me $5 in Bitcoin right now.
Let's see how long it takes. If it if the payment comes in
today, I'll give $10,000 to your favorite charity.
So when you see someone just putting so much skin in the
game, giving us bitcoin.com. You spoke with my friend John
Bush and you just showed him how to get the wallet and how to
send money immediately. It was so user friendly that
it's not like, well, people first have to read man, economy
and state and then they'll eventually, you know, get a
Bitcoin wallet. It's so user friendly.
I just did it immediately after seeing that.
So awesome stuff you guys are doing.
I'm so appreciative of it. Steve Patterson, where is the
best place for people to find your work at the Natural
Philosophy Institute? Yeah.
So you can go to Steve Dash. Patterson.com I've got a bunch
of writing and content produced there.
I've also in the middle of starting a Research Institute
called the Natural Philosophy Institute.
You can sign up for the e-mail list at Nat phi.org.
Doing a lot of interesting research.
You know, we were talking a little bit about a little bit
about it beforehand. You know, people are familiar
with this idea of fake news. Now people are finally accepting
that maybe a lot of the news is fake.
The next fake news is fake science, because the government
has intervened in the production of scientific knowledge for a
long time and there's a big mess to sort out.
So that's what I'm trying to do at Nat Fi.
All right, Roger. First, Steve Patterson.
Thank you so much for your time, gentlemen.
Thanks, Keith. Thank, Keith.