Are you crypto-curious? This past year has shown that an increasing number of people are dreaming of becoming crypto millionaires. But what is blockchain and this strange new digital currency and, more pertinent to this podcast, how are conspiritualists trying to exploit it, even when they don’t understand what “it” is?Matthew drills Derek, who worked in blockchain for over two years with two different companies, on the basics, before Derek interviews David Morris, the Chief Insights Columnist at Coindesk who also just happens to have a longtime interest in MLMs and cults. Matthew also reviews the 1996 essay, “The Californian Ideology,” the famous 1995 study of the bizarre Silicon Valley-fueled fusion of cultural bohemianism and free-market utopia rhetoric. In the Ticker, Julian reconsiders the definition of free speech in an age of digital misinformation through the lens of anti-vax champion RFK, Jr, Vandana Shiva, and returning Conspirituality champion, Russell Brand.Show NotesThe Lesson of Bitconnect: Promoters Can Be LiableChina’s Anti-Crypto Crackdown Is Different This TimeOf Course China Is Anti-Bitcoin: Look What Happened to Jack MaBiden’s New FTC Chair Could Be a Big Web 3.0 Ally23-year old who kept QAnon onlineItaly’s Five Star Techno-UtopiansRFK’s Children’s Health Defense article on Brand and ShivaSeeds of Doubt New Yorker article about Vandana ShivaStanford U. Letter on Shiva’s Anti-Science Rhetoric“Bill Gates Agenda” viral articleGates New Agriculture Non-ProfitBarbrooke and Cameron, 1995: THE CALIFORNIAN IDEOLOGYRichard Brautigan, 1967: All Watched Over By Machines Of Loving Grace
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Conspiratuality 60, Crypto Dreamin' with David Morris.
Are you crypto curious?
This past year has shown that an increasing number of people are dreaming of becoming crypto millionaires.
But what is blockchain and this strange new digital currency?
And even more pertinent to this podcast, how are conspiritualists trying to exploit it, even when they don't understand what it is?
Matthew drills Derek, who worked in blockchain for over two years with two different companies, on the basics, before Derek interviews David Morris, the chief insights columnist at Coindesk, who also just happens to have a long-time interest in MLMs and cults.
Matthew also reviews the 1996 essay, The Californian Ideology, the famous 1995 study of the bizarre Silicon Valley-fueled fusion of cultural bohemianism and free market utopian rhetoric.
In the ticker, I'll be considering the definition of free speech in an age of digital misinformation through the lens of anti-vax champion RFK Jr., Vandana Shiva, and returning conspirituality champion Russell Brand.
This is the Conspirituality Ticker, a weekly bullet point rundown on the ongoing pandemic of messianic influencers who spread medical misinformation and sell disaster spirituality.
The technology conundrum.
Hi guys, I want to start off today congratulating Colin Hoback, the director of HBO documentary series Q Into the Storm.
You may have seen he got an Emmy nomination, or the show did, for outstanding picture editing.
Yeah, really well deserved.
One of the things that stayed with me from the show was the moral crisis we watched Frederick Brennan go through.
As he candidly reconsidered his stance on free speech absolutism.
Now, just to refresh the listener's memory, Brennan is the software developer who started ImageBoard 8chan in 2013, which then became known as the most prominent platform willing to host material associated with antisemitism, white nationalism, hate crimes, child pornography, and the lengthy manifestos posted by mass shooters.
Brennan eventually moved to the Philippines to work in partnership with Jim Watkins and his son, Ron Watkins, who is widely believed, per revelations from that HBO documentary, to have been the person posting to 8chan and then the 8kun reboot as none other than Q.
Brennan has since fallen out with the Watkins and wants to end 8kun, saying it causes more misery than anything else.
Now, for anyone who watched it, you know that in an ironic turn of events portrayed in the documentary, Brennan had to flee the Philippines based on their incredibly punitive laws against cyber libel.
So much for free speech, right?
After Jim Watkins filed a complaint against his insulting tweets that called him senile.
But I'm revisiting this aspect of the story because it seems like questions of free speech and what counts as censorship are more and more complicated by digital technology.
There's a tie-in here with our cryptocurrency topic today and wondering whether or not any technology can ever be said to truly be politically neutral.
Matthew will be covering an influential and perhaps prophetic 1996 essay by Richard Barberk and Andy Cameron that they called The Californian Ideology, identified as a form of techno-utopianism unique to Silicon Valley.
Emerging in the early days of the internet, this kind of digital utopianism has generally posited cyber communication as being an inevitably emancipatory force that would favor the oppressed.
And this seemed to be borne out by social media organizing and communication playing a huge role in the Arab Spring, those protest movements across the Middle East between 2010 and 2012.
Of course, as we know, that optimism has more recently been soured by the enabling amplifier that social media has turned out to be for Brexit, Trump, COVID denialism, anti-vax propaganda, QAnon, and the capital insurrection.
Part of this too, that I was just looking into, is that dreams of a populist rebirth that roots out political corruption via direct democracy on the internet, and thereby renders parliament obsolete, are also central to the messaging of Italy's five-star movement party, headed up by former comedian Beppe Grillo.
Their successful approach to digital politics resulted in visits to study their methods in 2015, an important year, by figures who would later become central to Brexit and to Trump's rise to power.
As we've now seen, cutting out big media middlemen can hand a much-needed megaphone to those with marginalized voices.
But it also means that anyone with internet access can become a citizen journalist, start a blog, have a YouTube channel or a podcast, and potentially corrupt cultural discourse by amplifying misinformation, pseudoscience, and conspiracy theories.
Of course, it also creates a trail of digital evidence when you do a terrorism under orders from your big loser cult leader ex-president while live streaming and geolocating.
But jokes aside, in 2021, my sense is we all have a front row seat to the world being forced to grapple with how game changing technological advancements interact with culture in intensely disorienting ways that radically reframe central questions about how the relationships between my sense is we all have a front row seat to the world being forced to
Now, Wild West entrepreneurial independence means that when websites that have been party to inciting, fostering and then cheering on violent terrorism like the Daily Stormer, Gab and 8chan have service denied by the tech companies that keep them online, figures like 23-year-old Nick Lim, who owns Gab and 8chan have service denied by the tech companies that keep them online, figures like 23-year-old Nick Lim, who
A recent Bloomberg article that we'll link in the show notes identifies Lim as responsible for keeping QAnon online when no one else would.
Now, Lim says publicly that he doesn't contract with sites like these due to any affinity for their far-right politics.
But because of his principled support of, you guessed it, free speech.
His publicity photo shows him wearing a suit while standing in his backyard between his home gym workout equipment and what is identified in the caption as his crypto mining shed.
It's quite a combination of elements there in terms of what we've been talking about more recently.
This brings me to the July 1st article on RFK Jr.' 's anti-vax propaganda machine called Children's Health Defense.
It covers anti-GMO activist Vandana Shiva's appearance on Russell Brand's podcast, once again, hi Russell, in which they highlighted Bill Gates' supposedly evil plans for the developing world, which of course are disguised as an attempt to fight climate disaster and lift farmers in developing nations out of poverty.
At this moment I feel like I should yell bingo or something, and having found the complete set of collectible conspirituality cards in one convenient place, we got Russell Brand, Bill Gates, RFK Jr., vaccines, GMO, Vandana Shiva, and terrible plans for the developing world.
It's a little bit corkboard-y.
Yeah.
Maybe you might need some more string or something.
We've covered Shiva on the Pod before, because a section of her 2020 book, Oneness vs. the 1%, was published as a very widely shared article that placed Bill Gates at the center of a plot to perpetuate lockdowns, dismantle the public education system, create a dystopian world where, and I'm quoting here, children never return to schools, do not have a chance to play, do not have friends, a world without society, without relationships, without love and friendship.
She refers in that same piece to an ominous-sounding new Microsoft patent, you may remember, for a piece of tech that would allow tracking of individuals' biosignals during cryptocurrency mining, a concept we might ask Derek to help clarify for us.
The tech, of course, happens to contain 666 in its patent number, a kind of coincidental catnip for conspiritualists.
Shiva then links this to what she refers to as Gate's sinister agenda, quoting again, to colonize the minds, bodies, and spirits of our children before they even have the opportunity to understand what freedom and sovereignty look and feel like, beginning with the most vulnerable.
So we'll link to that piece in the show notes for those interested, as well as to Shiva's appearance on Brand's show, which is discussed on RFK's website with regard to the new nonprofit that Gates has started called Gates Ag One that seeks to bring breakthrough scientific technology to smallholder farms whose yields are threatened which is discussed on RFK's website with regard to the new nonprofit that Gates has started
Now, in this case, to continue the theme, she sees the digital data gathering activities of this kind of project by which it seeks to optimize all aspects of farming as being a kind of data slavery in which those farmers again are being mined.
And then what's the point is...
Is that data going to be used against them in some way?
Or it's going to be consolidated by big agriculture?
It's so tough because so much of her political positioning is easy to agree with, right?
She's sort of anti-neo-colonialist.
She's pro the people, you know, she makes a lot of these sorts of cases for not enacting a sort of cultural imperialism and having people in developing countries turned into serfs for big corporations.
Of course, yeah.
Yeah, which is important.
But at the same time, her lack of understanding of the technology means that she interprets ominous agendas behind things that it's hard to see how they get there.
As I'll explain in a little bit, one of the best use cases for blockchain is agriculture and supply chain management.
And what she could be referring to, which is a real problem, is if you are a farmer If you purchase seeds from Monsanto every year because you're not allowed to use the seeds from the plants and they are tracking you on blockchain, they can tell whether or not you're buying those seeds in your supply chain.
So that is a real problem, but her attempt at relating that to the mining of a psychological phenomenon, which is what she's doing in that essay, is problematic.
Yeah, so she tends to make that leap quite often into this more sort of mythopoetic reverie.
And in this case, she also personalizes it and says, you know, Bill Gates doesn't know anything about farming.
That's why he has to mine our local indigenous farmers for their information so he can learn how to do farming properly.
It's very much like the wellness influencers who around the turn of the century started talking about getting downloads from God, right?
It's the same thing.
You're taking technological metaphors without really understanding it and then applying it to whatever your brand is.
Yeah, and in a way it's not that surprising because here's this woman who obviously is quite brilliant who got her PhD in philosophy and her dissertation is on quantum physics.
So, she did that move that we know so well where someone tries to extract metaphysical spiritual truths from quantum physics and then turn it into this sort of academic pastiche.
The conversation features a lot of Russell Brand having to gather himself emotionally.
He's on the verge of tears many times because he's so, and I think this is really sincere, he's so spiritually awed by Shiva.
I think, too, he carries a certain amount of guilt and humility about British colonialism, which is perhaps appropriate, right?
I often think Russell is sincere.
That's part of the problem.
I mean, I really do think he's sincere with a lot of his beliefs.
It's just that critical thinking is often lacking, but his sincerity comes across, I think, quite often.
I know Matthew will have something to say on that.
I mean, there's a difference.
Well, I don't know.
I mean, there are degrees of sincerity based upon how much anxiety I feel coming off of a person.
I mean, you know, there's a kind of sincerity that feels like it's, I don't know, that it's rich or something like that because it's, the person has to feel, the person is feeling something the person has to feel, the person is feeling something and there's empty space and he has to fill the space.
That can feel authentic, it can feel sincere because it's being driven by some sort of terror of the silent microphone or something like that.
So, I don't know.
I don't know how to parse out people's feelings that way.
I I mean, I trust that he's not lying, if that's what we're talking about, but I don't trust that he's expressing something that feels settled.
Well, let me put it this way.
My sense, my interpretation is that there is a an actual emotion showing up for him that is impacting his behavior, how, how we, whether or not we can then claim to understand what that emotion really means or what it's really for is, is something else.
Right.
Yeah.
So he's definitely spiritually awed by her.
She holds forth throughout the section that I watched, inspiringly, about the sacredness of nature.
So you have this juxtaposition between desacralizing technology and a return to the earth.
And a sense of the sacred that comes from ancient tradition.
But again, the extent to which she gets the science wrong is really striking.
Critics have pointed out, and I'll link some articles here in the show notes as well, that she not only propagates pseudoscience and conspiracist ideas, but she also has actively and at times successfully campaigned against relief efforts that donated GMO food to areas suffering famine and other disasters.
So, you know, she seems to be okay with those people starving on the basis of her anti-GMO absolutism while turning around and charging $40,000 reportedly per speaking engagement plus a business class roundtrip plane ticket.
We end up here, I think, between the right-wing free speech warriors like Lim and conspiracist anti-vax censorship martyrs like Brett Weinstein has turned into, and then more left-leaning activists like Shiva, and to an extent Brand, who see technology as an extension of colonialism.
Questions of how to accurately understand digital ethics seem to only become increasingly thorny and complex, and that's before we even start to try to understand what the hell even is cryptocurrency anyway.
That's great, Julian.
I wanted to just repeat this quote from Vandana Shiva, who I still don't really know that well.
I'm sure I'll learn more.
But is this from her article?
She's predicting a world where children never return to schools, do not have a chance to play, do not have friends.
It is a world without society, without relationships, without love and friendship.
Is that from the article?
Yeah, I'll tell you the name of it right now.
So she wrote that out?
Yes, exactly.
She wrote that out in her book, which I cited, and the article was really an excerpt from that book, which is part of the reason why it has a weird kind of tangential quality to it.
I later found out it was just taken directly out of the book.
I'm always, I mean, we've spoken so often about how people with scientific credentials that they marshal appropriately or not, you know, according to their lanes or their disciplines or not, and how they will break into a kind of scriptural diction that, you know, in this case, Almost has like a Job or Ecclesiastes kind of feeling to it.
It's so stark and absolute and for a while like I've thought about moments like this as kind of like the eruption of the person's black and white psychology in some way that I take this psychoanalytic perspective where, you know, does she actually believe that the world is turning into a place where children never return to schools?
Like this must be an exaggeration.
And if it's not, and if she doesn't catch it in one edit after another, and if no editor says, Hey, you know, can you tone that down a little bit?
Cause it sounds a little bit extreme and it just floats through.
It seems to be this instance where this like really powerful projection sneaks through into the person's public discourse where they have this enormous fear about what the world is turning into, and they can't help but to turn that into an actual prediction.
Yeah.
Yeah.
And it's, it's very similar to some of our conspiritualists.
Bauhaus wife comes to mind Bauhauswife does it, yeah.
Who use the fear, the sort of science fiction fantasy that vaccines are going to turn us all into AI and that's what they're really for.
There's really this other bizarre agenda of turning us into machines.
I mean, I think with Shiva, the second aspect of how she does this comes into play because I think that when a person like that, or Zach Bush, slides into a kind of scriptural language, It's so entirely divorced from the science that they are ostensibly concerned about and talking about.
I almost feel like it has this anchoring function for the readership or the listenership.
It's like science is complicated.
The worldview and the connections and the conspiracies that I am Putting together for you are extremely difficult to understand but I'm going to give you a little mental break here and with a couple of sentences I'm going to give you like a almost a refrain of horrible but simple things that you can understand that will transport you back into familiar territory.
Right, the familiar territory of listening to the Old Testament or hearing poetry or something like that.
And so, I'm just really interested by that.
It's like, on one hand, obviously, she's not saying something that is reasonable.
She's Making something that she's afraid of and she's projecting it and amplifying it to some absurd degree.
But on the other hand, I think that it functions for the audience as a kind of set point where people can come back to this point in her speech or in the article and say, oh, she's speaking to things that I can understand, which is that my children need to play.
And I just find that really interesting.
Yeah, and even more than that, what you're kind of identifying as a mythopoetic, like an Old Testament sort of tone, is that it's more highly charged.
It's richer in the emotional and imaginal response that it evokes.
So for Christiane Northrup, a really good example is Luciferase, right?
That she found out there's Luciferase.
And because it has that name, that must mean something awful.
In this case, the fact that the patent has 666, Even though she doesn't directly reference that, everyone who talks about this patent includes the patent number because, again, it evokes some sense of like, see, it's true.
She's also well known for taking, and of course, no fan of Monsanto, not shilling for Monsanto ever here, but she takes the proposed G.U.R.T., what was it called, termination genetics, whatever
That proposed technology was for stopping the seeds from continuing to propagate and proposes that that's going to lead to a complete global apocalypse because it will eventually become contagious enough that it will destroy all life on the planet.
It will stop all reproduction of all plants and eventually all animals and that's how it's going to go.
So yeah, that pivot on a scary, hard to understand technological concept into something that has Mythopoetic kind of ominous overtones is very prevalent.
Right, well and that particular technology I think is terrifying when it's laid out in layman's terms and she's got a lot to grab onto there and it's just very interesting to see somebody or people again and again default to okay well how can I reduce this into a paranoid soundbite and make that the centerpiece of the rest of the sort of charismatic dream that I'm weaving for the public.
Okay, Derek, I have some questions for you about blockchain.
I'm really hoping that you can help me understand this thing that makes me feel very intimidated.
Let me start by just saying that I have worked in technology now for five or six years with a number of companies.
Right now I'm with Centered, which is software, but before that I was with blockchain.
But I've always worked on the content and marketing side, so I do have some understanding because I worked directly with engineers over a number of years.
I am giving a high-level, 101 overview of these topics, whereas when you hear me talk to David Morris, More granular understanding, you're going to hear a little bit more about the specifics.
So I am taking a 35,000 foot approach, so if there are people who are technically more efficient than I am, I apologize for any broad strokes.
I think that's, I think that's going to be good enough as an opener.
And that's a great disclaimer.
And I think that the, I think blockchain is so mysterious that the 35,000 foot view is really, really useful.
So let's start with, okay, so, um, what are the basic building blocks of blockchain?
There's a block, there's a chain.
What, what the fuck are these things?
Yeah, I don't know.
So I want to point this out because I think it's fascinating and both of you as writers I think will appreciate this.
The very first evidence of writing that we have is an accounting ledger.
The story goes, and it relates back to agriculture here, that as city-states were starting to form and people were actually trading with people they didn't know, they needed to both make sure that the trades were considered fair and that they would track their livestock or whatever they were producing.
So we are talking about a point in history when Currency was how many goats you owned, or how many avocados you produced.
And writing became a way of keeping track.
So poetry and mythology grew out of accounting, which I personally find fascinating, because we're right back to that story with blockchain.
So when people think of this very overwhelming thing that they don't understand, a block is simply where new data is entered, how many goats I have, And how many avocados you have.
And the chain is the series of blocks linked together.
So effectively a blockchain is just a database.
Now spreadsheets, we probably all use spreadsheets as conspirituality as a business, we use spreadsheets for certain things to track certain things.
And a database is just an organizational scaled spreadsheet.
It's just a very big spreadsheet.
Now I think what people Get a little confused by is this tethering of cryptocurrency, which we'll get to in other in other comments here.
But let me just say that also bring up the term a node because that's very big in blockchain and a node is has a full record of the data That has been stored on blockchain since its inception.
So as soon as you enter a block, that's the source of truth.
That's where, for example, non-fungible tokens or NFTs are very big right now.
You're just putting your artwork on that first inception block and saying, this is the original and now I'm giving it to you.
And that's where the record starts.
Okay, so we already have the sort of metaphor of the deposit.
The block is something that we've put data into.
When I think of my Gmail account, when I think about my online banking, I kind of think of a filing cabinet in space.
Where my data is sort of mutually, it can flow to me, but I can put data into that filing cabinet.
But that's not blockchain in the sense that That's my private communication of data into a filing cabinet that nobody else can access except myself and the company that I trust.
But with blockchain, the process of that data sharing ends up being open in some way or verifiable by other people.
Well, so first off, there are public blockchains, which is what most people are accustomed to with Bitcoin and Ethereum, the two biggest, but there are also private blockchains.
The three of us could spin up a blockchain and control it completely for our data organization.
But let's not get too into that because that'll be too down that road.
that rabbit hole.
So an open ledger just means it's publicly available.
It's a defining feature of Bitcoin and why it was started.
So the activity you're talking about, the transactions or storage of data, happens inside of the blocks, as I said.
So the transaction process is this.
A transaction is entered and then it's transmitted to a network of peer-to-peer computers around the world.
The For Bitcoin, the network solves complex mathematical equations to validate the transaction.
And then once the transaction is confirmed, those transactions are clustered together, and the blocks are then chained together, and then the transaction is complete.
I know that was a lot, so let me break it down a little bit more.
When you go to your online bank, You are entering your PIN number to access your account and you're right.
Ideally only you and the organization has access to that.
The problem with this form of security is that it is very easy to hack if you only have one point of entry.
And so that's why when you see things like LinkedIn was hacked and 85 million people had their identities stolen, it's because there's only that one point of entry that people were able to.
Hopefully their security protocols are more intense than that.
They spend a lot of money.
Cybersecurity is one of the most lucrative industries in the world.
Hold on a second, Derek.
When you say one point of entry, you mean one binary way of validating your identity as opposed to something that would be more distributed?
Yes.
I'll be a little more clear on that because that's for your personal identity.
If someone gets a hold of your password, they can access your account, they can access the entire bank's account.
Banking security is more complex than that one point of entry.
First off, I'm going to get back to security, but I think this is important.
The reason that blockchain hasn't scaled yet is because of those points of verification on the peer-to-peer networks around the world.
So for example, Ethereum takes 12 transactions, meaning 12 different people have to say, this is a valid transaction, and each one takes about 15 seconds.
So you talk about three minutes to verify a transaction.
So if you're online and you're buying something with Bitcoin or Ethereum, it's not what we're accustomed to with credit cards where the transaction is instantaneous.
But it's interesting because credit card payments actually take 24 to 48 hours to validate.
The thing is that the credit card companies are so big that they basically say, we trust you for this, so we're just going to cover it instantly.
But the actual transaction, if you look at your bank, why it takes a few days is the process is actually in reality much slower.
It's just that blockchain cryptocurrency has not been adapted widely yet or adopted widely yet, so that people don't have the same level of trust in it at this point.
So, in normal transactions, a merchant will absorb the cost of the transaction, while in crypto, it's the sender that absorbs the cost.
Now, in Ethereum, this is called gas.
And this is why, as you'll hear in a little bit, when David says that you can't untether cryptocurrency and blockchain, because you need something, an incentive program, for it to actually run.
And I know we have questions on that, so I'll get to that.
That has to do with the nodes and how the networks are distributed and the functions of each of those points of distribution.
Yeah, so for me to spin up a node, I'm not going to spend all that money on computational power and then not get money in return.
Okay, so let's back up because I think, let me see, in my list of questions here, maybe this is the next one that makes sense.
Okay, so I understand that blockchain is the larger category, the technological sort of landscape in which something like Bitcoin unfolds and that each of those products or software systems, Bitcoin, Ethereum, and a number of others that we'll talk about later,
That they all use blockchain in a particular way, but the general idea is that within a blockchain system, each computer has the potential of monetizing the process or verifying or tracking the ledger.
Now is that automatic?
Do users sign up for that?
How does that work?
So right now there's two different ways, which is proof-of-work and proof-of-stake.
And so blockchain, famously, is proof-of-work, which is very energy-intensive.
So a miner is really, it's just a metaphor, talking about metaphors before, it's just someone who has the computational power that will solve these complex mathematical problems to verify the transaction.
Now, you can verify transactions on Bitcoin with something as small as what's called a Raspberry Pi, which fits in your pocket.
One company that I was working with was trying to get Tesla.
So that Tesla's, when they were charging, were actually mining cryptocurrencies through solar energy, which is a great idea.
So your car can pay for itself through cryptocurrency.
And then there's proof of stake, where the creator of the block is chosen by an algorithm based on the user's stake.
And just briefly, so I have a bunch of Ethereum.
If I were staking If that cryptocurrency would allow me to stake, I put up a small amount of money in order to solve the block, to solve the problem, or I'm sorry, to get chosen by that algorithm to then get rewarded with more, hopefully, cryptocurrency.
And part of the issue right now is Because it's a global cryptocurrency, the worth is always variable.
And so some days an Ethereum transaction will cost me nothing, and some days the very same transaction could cost me $50 in fiat.
And so that's part of the problem of why it hasn't been worked out yet.
You just used the word fiat, and what you're referring to is standard issue, government-backed currencies that are used around the world.
But hold on, hold on, Matthew, because it's convenient, Derek, that you mentioned mining.
The thing that Vandana Shiva had talked about with regard to this Microsoft patent and biotracking.
So it's a patent for a device that hasn't been made yet, but that apparently will track biosignals in a certain way of people who are mining cryptocurrency.
What does that mean?
The mining is again, you have some sort of computational power that will solve complex equations.
But what you're really asking is how is it tracked?
Because the issue is the tracking.
So on a public blockchain.
In order to partake on that blockchain, you will get an address.
Now, Bitcoin addresses range from 26 to 35 alphanumeric characters.
So we can right now go to a blockchain explorer like blockchain.com.
We can log on, we can just look at it.
And you will see every transaction happening on that blockchain as it's happening.
But all you're seeing are strings of numbers of 26 to 35 characters that is a person or an organization behind it it doesn't reveal your identity you have to know who's A string of characters, that is, in order to identify them.
Now there are ways if you, like one of the blockchains I worked for, we would monitor transactions on the chain and you can kind of tell over time by certain behaviors who the people actually were and then you could actually write down the numbers if you wanted.
But for the most part, part of the reason that it's considered shady is even though it's done in public, When companies in the US are sending crypto to Russian hackers to pay off to get their data back, you can see their blockchain number, but you don't know who's behind that.
She's being a little hyperbolic with that.
You would have to know who everyone's numbers are, and you can also spin up many addresses if you open many different wallets.
Every wallet is associated with an address, so there are many ways of being undetectable if you're using cryptocurrency.
Yeah, it sounds like from looking at the patent, it was a while ago that I looked at it when the article first came out, it sounds like it's some kind of piece of wearable technology that enables, it sounded to me like someone who was earning money doing cryptocurrency mining would, it's a way of sort of verifying the fact that they're on the job somehow by tracking their bio-signals is what it sounds like.
I don't know how to make head or tail of that.
Yeah, I'm sorry.
I was giving you a bigger explanation of what mining was for that in terms of that particular... I've seen potential use cases where, for example, I use Strava when I cycle and it's tracking my performance.
I just got a heart rate monitor so that tracks that.
I can choose to make that public or not.
So all you're really talking about in that situation is them wearing some sort of wearable technology.
The only difference is it's powered through blockchain instead of traditional.
A lot of stuff that's being built on blockchain can be built on traditional infrastructures.
There's just a certain sexiness by saying it's built on blockchain.
And it really doesn't actually have to be.
It's actually more cost intensive to do it that way.
So in that situation, that's more fear mongering than anything else.
But the principle behind the entire thing is ostensibly decentralization, because if the tracking and administration of all of the transactions for whatever the software is, is distributed amongst peer-to-peer computer networks, no single person is in charge, nobody can make
Ostensibly, nobody can manipulate things, but I understand that as the computational issues have gotten more and more complex, and this contributes to the energy intensiveness of this process, that more and more hardware is needed.
Like, I'm sitting here with a plain old Mac desktop, and it's unlikely that I would be using my computer to contribute to any kind of Bitcoin jamboree, right?
You could.
You just make a very small amount of money.
Excellent.
So that's, and I'd also blow out the computer because it would be running all the time, right?
No, no, not at all.
I mean, it depends on how much you, it depends on what other programs are running while you're writing.
Okay.
But my, my understanding is that the computation is so, um, uh, intensive and I want to ask you about the equations too.
Like, are they random?
Is it kind of a game that these computers are playing?
Like what the, like, um, Don't ask me math because I won't be able to answer that part of the question.
Okay, cool.
But my understanding is that it's not as decentralized as it appears because the hardware requirements and the energy requirements for doing the major portions of the mining, especially if we're talking about currency, that's actually super expensive.
And that's why dude, Mr. Lim, in Washington State or wherever he is, has a shed full of data mining that he has to probably keep in the shed so that it doesn't burn his house down.
So am I am I am I right about that, Derek?
Yes.
I'm going to answer that.
I'm going to answer your question about manipulating the ledger because they're related, just so you know.
Right.
Yeah.
I mean, all people and all those sheds are holding our computers.
They're just that's it.
So there's there's some, again, like There's just a lot of computers because you want as much computational power as possible to be able to solve the equations as quickly as possible.
So if you think about those photos from the 1950s when computers were first starting being built, how my father was a computer operator in the 60s.
So he would be in a room.
of computers that were much taller than him walking around.
And so it's just they're building up this immense amount of power to be able to solve the problems as quickly as possible.
Now, with that, there are companies that have sprung up to build these sheds or warehouses to try to maximize computational power in order to make as much money as possible by mining cryptocurrency.
You are correct that the equations get more complex because there is a limited number of all cryptocurrencies.
So as you mine more, they get harder.
That's a feature that was built into this piece of technology.
But there was one thing you said that was a little off is that there is something called a 51% attack and it has happened.
It's It's unlikely it'll happen again, but it has happened a couple of times.
And so this is when a miner or a group of miners are able to control more than 50% of the network's computing power.
And so what happens is those miners then block transactions and they can even double spend the coins, which is a feature of the security protocol.
that you're not supposed to be able to do.
But one thing they can't do is they can't rewrite the existing ledger, but they can start to manipulate the ledger moving forward.
There's also something known as the 34% attack where you have 34%, but that's very hard to pull off.
So with the 51% attacks, there have been two on Ethereum and one on Bitcoin Gold.
And that one, people were able to steal over $18 million.
But again, if you think about... Remember, Bitcoin right now is worth more than Goldman Sachs.
It's worth more than Bank of America.
I mean, it's one of the most lucrative valuations on the world.
And you would have to own half of that To be able to control the rest of it, which doesn't make any sense at this point, because if you already own that much, you would have to spend that much to get less back.
So a 51% attack would have been more possible a few years ago when it was tried.
And as I said, a few succeeded.
But at this point, so many players are in the game.
You would have to get all of them to come together to do an attack like this.
And then you're only mining what is actually a finite resource at this time.
So, it's not worth anyone's interest.
So, my sense is that we might be losing listeners in droves the deeper we go into all of this on these different tangents because it is confusing and it is abstract.
So, I just wanted to add, for whatever it's worth, if I was listening, maybe I would say, okay, so I'm getting a sense that
As I try to understand blockchain and cryptocurrency, that this is a way of trying to decentralize the way transactions are verified through complex networks of different computers that takes it out of the hands of the financial establishment as the middleman, right?
And that mining is participating in that process by making your computing power part of how those chains of verified transactions are built So as to achieve that goal.
Facilitate the entire project.
Is that correct?
Am I correctly understanding?
Yeah, there's two parts of that.
And the first one is that this was dreamed up by anarchists who wanted to take down financial institutions who they saw as manipulating world governments.
That is where this is born out of.
Of course, Satoshi is the creator of Bitcoin and no one knows who that is.
And many people, including Peter Thiel, have claimed to be him.
But there's no way it was Peter Thiel because he's a douchebag who just wants attention.
It's Ron Watkins.
But there are other people.
There are other people.
So Nick Szabo in 1998 created Bic Gold, which his work got into Satoshi's white paper.
So some people have speculated it was him.
There's We Day, a computer engineer who talked about B-money in 1998.
He was also referenced.
We can go back further.
David Chalm in 1982 wrote a dissertation on what became blockchain protocols and as early as 1990, he founded something called DigiCash.
So people have been thinking about Stuart Brand, famously of Whole Earth, who was very early into this world as well.
Whole Earth Catalog in the early 70s, of course, being the hippie, you know, apex of hippie culture.
He was very early in digital technologies and currencies.
Um, so the idea was born out of giving power to people in controlling their resources.
And I want to bring up some use cases, but let's keep going with the questions and I'll end with that.
Well, no, that's good because my, my, my followup was if you're not an anarchist, you know, if you're not on, on that radical extreme in terms of why you think it's a good idea, why is it a good idea?
From my perspective, there's a few reasons.
Walmart has done a great use case of their agricultural supply chain on blockchain.
Blockchain is just a very secure and very reliable way of tracking information.
I know, and as David says, you can't untether crypto from blockchain, but I don't talk much about cryptocurrency because the technology itself is blockchain.
If there is an E. coli outbreak somewhere and you want to be able to track where that spinach came from, right now our supply chains are Shit.
If you've noticed when there's an outbreak of Salmonella or any of these, it takes them months to identify what farm it came from at times, or at least weeks.
But if you have a blockchain verified, you can scan that and immediately go back to trace the origins.
I've had friends who've worked for Whole Foods and the amount of Connections it takes to get a product into Whole Foods is not like going there and saying, hey, sell my product.
There's a lot of middlemen that come between the source, the agriculture, and the final product.
Blockchain helps streamline all of that.
And that supply chain is complex enough that what you're saying is that the retailer at the end of the day actually doesn't know where the thing came from on the shelf, like where that romaine actually is from.
Absolutely.
And if you look at the health and beauty industry, there are no guidelines.
I can spin up something in my kitchen and sell it at Whole Foods right now without actually revealing where I'm getting the products from.
And so blockchain used universally by the agricultural industry would ostensibly allow for instant tracking of all leaves of romaine lettuce?
Yeah, every bundle.
You can mark every bundle and then through every step.
So don't just think of even the lettuce, think of like a pesto.
If you have an olive grower and a dairy farm and then the spinach farm where it's sourced from there, all of those steps, if they were tracking where the olives were harvested and then made into oil and the spinach and the cheese, if you're tracking all of that and then you put every step of the way you're required to verify where it's coming from, then you can actually, when you get the final product, you know the farms where everything came from.
Okay, so that's a vision of something that's hyper-orderly and transparent and, you know, I would say open source is the language that I guess I would use for it.
But, you know, a major selling point in many of the blockchain ideas and technologies, especially with concurrency, is not only the elimination of the middleman with this verification of peer-to-peer, you know, processing, but Also, a level of, you know, the possibility of secrecy or dodging.
Like, how is cryptocurrency, for example, not a machine for avoiding governmental oversight and taxation and things like that?
Well, it is.
Let's bring up what I think is a positive use case and then let's bring up what you're referencing here.
A positive use case and one of the very original ideas when cryptocurrency was being dreamed up was to deal with climate change.
Actually, Julian, you brought up the Philippines earlier with the Watkins.
I have some family members who are Filipino through marriage.
In order for their families to travel outside of the Philippines, they have to have at least $10,000 in the bank, in the state-run bank.
And when they leave, if they are gone past their visa or how long they say they're going to be gone, the government freezes their assets.
And this is not just the Philippines, this is in many countries.
So say you are in an area, let's take India for example, where climate change is going to create more and more monsoons and flooding.
And say that you're, I don't know the banking situation in India, there are a lot of unbanked in India though, I know that.
And say you have your resources either in a controlled organization or you just have your money in your mattress.
Whatever that is, when a catastrophic event comes and you have to run out of there, and you flee the country because of a crisis, or as happened with the Arab uprising, the state can say, You don't have your money anymore, so what are you going to do?
Or you can actually lose your physical money.
So the good use case of blockchain is that as long as you have your keys, your passcodes basically, then you can access it as long as you have an internet connection.
That's it.
That's all you need is a mobile phone, an internet connection, you can have your money anywhere.
So that's the positive use case.
But as with anything in life, there is manipulation of that and so it leads to What we're seeing with hackers, where they can capture people's data, freeze them out of their computers, and then say, pay me in this because you can see my public key, but you don't know who I am.
So I'm going to take that money.
And that's how you get a lot of trading on the dark web of Of slavery, of people, of sex, of all of that.
So it's like any technology we've ever created.
There are good uses and bad uses, but they're not inherent in either.
I know you'll discuss how some technologies are born out of malicious ideas, but there are both in terms of blockchain.
Okay, so now, do cryptocurrency fans fantasize about regulated currencies just withering away?
Like, is this an idea in the culture that Bitcoin could just replace the U.S.
dollar and everything would be better?
You know, I mean, we've talked before and all of us know something of the history of yoga.
What happens when you bring Indian ideas into neoliberal capitalist America?
They get translated through a lens that you can't quite grok the initial ideas because you aren't born of that culture.
And I very much attribute the same thing with this.
You can dream of Bank of America shutting down and then everyone having money.
But that's just a juvenile fantasy.
So if it was born out of these anarchist dreams, you know, tear it all down.
But what do you replace it with?
Satoshi actually said, well, this is what you replace it with.
So I'm sure there are some people who have those fantasies, Matthew, but you do need And it's important to point out that fiat is the evolution, a constantly evolving form of currency.
Again, if we go back, and even still now, It was one of the founding ideas of Burning Man.
15 years ago when I was there, you're serving up chai and I have a new music CD.
So here, let's trade.
That was very much what currency was for a long time.
It's just like, I have this, you have this.
So fiat itself is an idea.
It's one that has worked on a lot of levels, but we also know the problems with neoliberalism and capitalism.
So we have run smack into what those problems have caused with our space billionaires right now, and we're either going to continue along that route, creating bigger economic rifts, or we're going to replace those systems.
Okay, so I think that leads to the political questions, because you have referenced blockchain coming out of an anarchistic perspective, and I think there are some other points of view that the people that I'll refer to in a bit bring to that.
But would you say, in general, that blockchain has a political bias?
Does the tech itself push people in conversations in a particular direction?
I think in a, again to use the term, neoliberal capital society, yes, I think it does.
Because look how cryptocurrency at root is me saying, I have this much to be able to power this much data on the blockchain, but how does that translate in terms of how people Oh, it's another stock market, but the gains are so much quicker and bigger.
Right.
And that is not how it was initially intended, but when you put it... It also discredits it as a form of money because it has no storage value.
I mean, it's funny because it's a... I mean, I'll get to this in a bit, but it's like, It's a currency that, so far, people can use in exchanges, but they can't really use it to store value, and they can't really use it to be assured that the thing that they bought for 1 Bitcoin in January is going to be worth 1 Bitcoin in February.
Most famously, the first Bitcoin transaction was a pizza and it was something like 8 Bitcoin.
So someone paid in today's value $300,000, $400,000 for a pizza.
But back then when it was $10, then it made sense.
Yeah, I think in a lot of people's minds, especially right now, the different cryptocurrencies that have been in the news are linked to the GameStop and the AMC stock stuff.
And then that's also linked to this idea that there are these groups of people on message boards Like 8kun and like Reddit who are staging these big events where they use the distributive decentralized power of the internet to attack established institutional sort of ways of maintaining balance and reveal that the whole thing is actually incredibly vulnerable and provisional.
And there's something there too about like, I think one of the things that's disorienting for most of us is that when you start thinking about this stuff, you have to then confront that all currency is this symbolic game that we play and buy into and take for granted.
And when you peel that back and go, oh, hold on a second, what is money?
Yeah and I think the zoom out question too is the what is money according to central banking and and government issue currencies is a series of highly complex social agreements that are regulated through several institutions and it seems that things like bitcoin want to sweep all of that away and propose a kind of fixed value upon something that uh and and an eternal value on something that
that has no social contract around it.
The social contract is kind of replaced with the technology of verification.
There's a great Jay-Z line that I'm not going to get exactly right, but where he says that basically, you fools holding money up to your ear on Instagram, we don't call that cash over here.
Because even though we have this idea where people like to hold up big piles of cash, that's not actually wealth.
Wealth is real estate.
It's owning things.
And we have a very distorted view of what wealth actually entails and where Wealth is acquired.
People who have a lot of money actually have a lot of things and they have stakes in things or they have stocks or whatever that is.
They don't necessarily have a lot of cash on hand.
So, it's very hard to even talk about some of these topics sometimes in a culture that gets very caught up in the idea of just cash all the time because that's not actually accruing wealth.
Well, maybe this is the last question then, which is, is there anything about the technology of blockchain or the phenomena of cryptocurrency that you think either challenges or could challenge the basic mechanics of capitalism, like the extraction of surplus labor value?
One of the best use cases is one of the companies we were working with in Africa was doing some sort of solar mining project where it was specifically for the unbanked, because Africa happens to be, I believe, the biggest place in the world with unbanked people.
In some areas, you're talking about dozens of miles people have to travel to get to a bank, but they have mobile phones.
Online banking, that requires the institution to go and find those people, which doesn't really make sense for them.
So, if you take that idea where you do have a true, I have control over my finances, including the transaction fees, including where I travel in the world and how I use it, that is a challenge to what we currently have.
And again, I know in America, we We have a different setup so that most people, wherever you travel, your visa card is going to work.
But for a lot of the world's population, that's not how it works.
And as capitalism tries to spread, or we try to spread capitalism more and more around the world, You know, there's a reason why people, you know, we talk here about pushing back against autocracy and communism, but there are places in the world that push back against capitalism with equal fervor, and there are reasons for that.
And that is the, not the state control, but that these giant corporations are controlling what I have, what I do with my resources.
And so, yes.
There are definite use cases that can play out and actually help people, but it's like anything else, it's going to be a real challenge.
I think this is where we have our blockchain commercial break.
Maybe a little tune, maybe a little tune.
Derek is going to encourage people to invest in a once-in-a-lifetime opportunity to become a millionaire overnight.
Well, this is what I was going to bring up, is that I've definitely noticed that crypto tags have intersected with the social content of our influencers.
But I often feel like, and maybe this is because I dissociate when I see it, but it almost feels like a side gig for a lot of them.
And often it's shielded from the other content themes they have.
You know, I'll see somebody that Josh Goldstein retweets, another like raw meat eating guy who thinks the earth is flat, he'll have like a hashtag for some, I think it's hex or something like that, some cryptocurrency in his Twitter bio.
But the way he talks about it, it obviously
is directed at some in crowd like people are there for the raw meat and he's kind of putting the hashtag for the crypto onto the side and i don't know maybe they have a separate conversation about that but i've seen it in a lot of instances they all blur together um and yeah so i have noticed it but it's been hard for me to follow and concentrate on but i do know that Sayer G for example is definitely a crypto advocate And he might be sidelining as a crypto guru.
There's a workshop presentation that he's collaborating on with some crypto guy.
And he makes this on brand by connecting it to his fear that, or his proposed fear, that centralized computing, the centralized computing that controls Facebook, ostensibly, will deplatform him completely.
And so he's also pitching blockchain projects like the video platform that's called Odyssey.
Now, I wanted to ask you about this, Derek, because if you took YouTube and suddenly plonked it onto blockchain and decentralized it, Would I be right in assuming that the storage requirements of something like that would be way bigger than for any of the use cases that we're talking about, like currency, and wouldn't that be even more energy intensive?
Like, how does a video streaming service replicate the whole ledger of all of its videos so that everybody's channel is available to everybody all the time?
When I was working on a music streaming service powered by blockchain at that time about three years ago, it would cost you about $100 to stream a song.
Wow.
But that said, even my current job Because we have a video component, by far the most expensive aspect of the application that we're creating goes to video storage.
It is extremely expensive and that's why I always kind of laugh a little bit when I see these influencers Making these holistic back to the earth, you know, climate change long videos.
And I'm like, you don't realize even at the cheaper rates that our storage now costs, they're still creating a heavy load on the Internet by posting those hour long talks.
I didn't even think about that.
That like if you if you had a really great sort of eco activist content stream, if you were doing it by video, you're like frying us all.
Yeah, oh, absolutely.
And that's why when I see them, I mean, look, we're using these mediums too.
And the cost isn't nearly what it is in blockchain, but at the same time, at least understand what you're saying and the technology platform you're using.
Okay, well, Sayre is also boosting some sort of doppelganger internet called Quartel, actually spelled with a Q, which I find kind of suspicious.
It's weird to me.
Everything is connected.
I know, it's weird that a blockchain internet would imply replicating the internet on everyone's device or within everybody, like making the entire internet accessible to everybody ad infinitum.
It's like a parallel universe.
It's a parallel universe thing.
Yeah, maybe that's what the point is, is that you walk into a house of mirrors with Sayre and you don't know whether you're him anymore.
Maybe that's it.
But does that make sense, Derek?
Did you look at Quartal?
I think I put it into Slack.
No, no, I didn't have time.
I was preparing all the other notes.
You glazed over.
Not in this universe.
Even you glazed over.
Holy shit.
I mean, just reading off of what you said, there is one idea that In North Korea, they don't have access to any internet, or other countries can turn off certain parts of the internet at will, but I don't think he's being that benevolent.
So this sounds much more like something metaphysical that I don't even want to get into.
Right.
Well, you know, I always had also the impression, as I'm getting this in drips and drabs, that crypto seems to lean right, but I didn't really have any evidence for that until, you know, we thought up this episode and you got in touch with David, did that great interview.
And then I looked around and I found a great book by David Golumbia, which is called The Politics of Bitcoin Software's Right-Wing Extremism.
And his main point, which he gives lots of evidence for, he's a literary theorist by training, I think, like an English prof, but he got into analyzing technology.
But he basically says that crypto boosters, without Knowing it, perhaps, they end up bullhorning far-right economic views, including conspiracy theories about things like centralized banking and who's running it.
And he says that this is so regular in practice that whenever the social or philosophical implications of something like Bitcoin are mentioned, even in mainstream sources, these ideas are just taken as read.
And so I'll just quote from him.
He says, in the Bitcoin literature, as in the central bank conspiracy writings, we read that the Fed is a private bank that hides its real purpose, that it steals money from some private citizens and puts it in the hands of the elites that control the Fed, that the Fed itself is covertly run by a shadowy group of elites often made up of Jews and members of English banking families such as the Rothschilds.
So, I mean, this all sounds pretty familiar to us.
And it seems like the crypto answer to it all, you know, drain the swamp, go peer-to-peer, it harmonizes with a vision that we're familiar with.
He also, Columbia also, pinpoints these key features of crypto ideology.
So, I've already referenced that, you know, central banks are run by bad people.
Secondly, inflation and deflation are the manipulations of central banks instead of complex responses to an infinite number of factors, supply, demand, you know, weather patterns.
You know, population movement, whatever.
Thirdly, the idea that computer-based expertise trumps that of all other forms of expertise.
And then lastly, the very general feeling that government is inherently evil.
And he also hints at a kind of systemic deception, not intentional necessarily, but This way in which the technological discourse permits boosters to use right-wing talking points in the name of freedom.
And he owes a big debt here to this essay that, Julian, you referenced in the introduction by Barbrook and Cameron, which was amazing for me to come across because it put a lot of things together for me.
It's called The Californian Ideology, published in 1995.
And they do remark, or they track actually sociologically, this
Weird conjunction between San Francisco hippies who held progressive leftist values in all things, except when they drove down the highway to the valley and got into the magical world of computing, where somehow they could fantasize that politics didn't exist, or they could dream that everything would be made better through—Golumbia uses the phrase technological fatalism,
Which I found very poignant because I often feel fatalistic as I'm sitting in front of this fucking box like, oh here I am, this is what it is, I don't know how it works and it's controlling so many parts of me.
So yeah, he also brings up the idea of cyber libertarianism being kind of at the at the heart of some of the developments that come out of the 70s and 80s.
He talks a lot about how as just a literature student and professor, he was very aware of, you know, the kind of language that came out of Far-right ideologues regarding banking and monetary systems going back to the 50s and 60s, you know, things like the John Birch Society.
And he said he was really shocked when he started seeing this language pop up in, you know, early versions, early issues of Wired Magazine or places like, as you were referring to, Derek, the Whole Earth Catalog.
So, I'll just say a little bit because it's so good about the Californian ideology.
The writers are Richard Barbrook and Andy Cameron.
I've got a couple of quotes here.
Their first graph ends with, at such moments of profound social change, anyone who can offer a simple explanation of what is happening will be listened to with great interest.
At this crucial juncture, a loose alliance of writers, hackers, capitalists, and artists from the West Coast of the United States have succeeded in defining a heterogeneous orthodoxy for the coming information age, the Californian ideology.
And then it's defined as, this new faith has emerged from a bizarre fusion of the cultural bohemianism of San Francisco with the high-tech industries of Silicon Valley.
Promoted in magazines, books, TV programs, websites, newsgroups, and net conferences, the Californian ideology promiscuously combines the freewheeling spirit of the hippies And the entrepreneurial zeal of the yuppies.
I think there's references in a couple of podcasts that I heard Barbrook on about Steve Jobs's tour through, you know, India seeking enlightenment and so on and then winding up back in the valley.
One of the things that I found really super helpful was their analysis of how the
technology and its developments through the 70s 80s and the 90s where they're they're they're doing their work allowed people who were otherwise or maybe even foundationally progressive in their values to say almost to take their their eye off the ball that that for instance they write by championing
championing this seemingly admirable ideal of technological freedom, these techno-boosters are at the same time reproducing some of the most atavistic features of American society, especially those derived from the bitter legacy of slavery, because their especially those derived from the bitter legacy of slavery, because their utopian vision of California depends upon a willful blindness towards the other, much less positive features of life on the West Coast, racism, poverty, environmental
Ironically, in the not-too-distant past, the intellectuals and artists of the Bay Area were passionately concerned about these issues.
And then I think maybe the last thing that I wanted to point out is that I think in this amazing effort for 1995, which is kind of getting, you know, recycled, as I understand it, every five years or so as people have some kind of crisis moment around the meaning of technology.
And they say, like Barbrook, in one interview I heard him say that this was just repudiated by most American technologists when it was printed.
But then they were invited back at some point to some, I don't know, conference in California where they were welcomed as sort of subtle prophets of the future.
But one of the things that they really nailed down is how the technology development also intersects with the emergence of More individualized labor and gig work economy.
So they're talking about how there's a need with all technology sectors for creatives to emerge and do highly individualized work.
So, just quoting from the essay, they say, although companies in these sectors can mechanize and subcontract much of their labor needs, they remain dependent on key people who can research and create original products, from software programs and computer chips to books and TV programs.
And along with some high-tech entrepreneurs, these digital artisans form the so-called virtual class.
The techno-intelligentsia of cognitive scientists, engineers, computer scientists, video game developers, and all the other communications specialists.
And, unable to subject them to the discipline of the assembly line or replace them by machines, managers have organized skilled workers through fixed-term contracts.
They become the labor aristocracy, or like the labor aristocracy of the last century, core personnel in the media, Computing and telecoms industries experience the rewards and the insecurities of the marketplace.
And so, on the one hand, these digital artisans not only tend to be well-paid, but they also have considerable autonomy over their pace of work and their place of employment.
And as a result, the cultural divide between the hippie and the organization man has now become rather fuzzy.
Yet, on the other hand, these skill workers are tied by the terms of their contracts and have no guarantee of continued employment.
Lacking the free time of the hippies, work itself has become, this is so perfect, work itself has become the main route to self-fulfillment for much of the virtual class.
And oh my gosh, like how prescient that is of contemporary economies and the precariat as well, which they don't coin as that term, but they might as well.
So anyway, we'll link to the essay and we'll appreciate all of your listener feedback on whether or not you understand better and are ready to invest in Conspiratuality Podcoin.
There's points that you've raised that are so, I think, interesting and important in terms of technology claiming to be apolitical or populist movements claiming to be apolitical.
And one of the things I linked to in the show notes that I referenced earlier was this five-star movement in Italy.
And how, you know, it started off in I think 2013, claiming to be neither right nor left, and actually having a fair amount of socialist sympathies and being sort of more progressive in terms of social issues as we identify them in the United States.
And over time, they've morphed into this more sort of They've morphed into having alliances with fascist figures, and a lot of it has to do with wanting to decentralize government altogether, get rid of parliament altogether, have everything be direct democracy through the internet, and they call their platform that they use for this Rousseau.
Oh wow, yeah, the noble savage using the internet.
And actually that article is in Wired, oddly enough.
So direct democracy through the internet, are they high?
Are they completely high?
Meaning no middleman, right?
Meaning eventually we get rid of people.
Politics should not be a career is one of their platform statements.
Well, okay.
I can empathize with a sentiment there, but what's the benchmark for expertise in public policy?
Like, I mean, people have to do things.
Direct democracy means everyone who can vote on every different thing gets to have a say, right?
And so it's a popularity contest where you are eliminating some of the checks and balances that come from some kind of expertise.
Yeah, I would love to have vaccine distribution actually happen with no middleman just come directly out of my fucking computer.
And the vaccines be distributed amongst nodes and decentralized.
Yeah, and you can just choose if you want vaccine or ivermectin.
You just click.
Exactly.
You just choose.
And then there's another button where the soylent green pours out of the bottom of the thing.
And you can track how many people have done which choice and how much they like it just by clicking a button.
And then there you go.
Can we talk about the use of the word node right there, Matthew?
Yes, please.
Did I get it wrong?
Okay.
So, I understand that Adam Curtis, the British documentarian, made a series called All Watched Over by Machines of Loving Grace.
I haven't watched it yet, but I will because he's awesome.
But I remembered the title from the Richard Brodigan poem from 1967.
Brodigan is an incredible writer, incredibly tragic and ambivalent figure as well.
He died of suicide after a lifetime of It's a great interview, Derek, and I hope our listeners enjoy it.
others and he left some incredible things behind including this poem uh and i hope that uh our guest appreciates it um it's a great interview derek and i hope our listeners uh enjoy it okay so all watched over by machines of loving grace i like to think and the sooner the better of a cybernetic meadow where mammals and computers live together in mutually programming harmony like pure water touching clear sky i've
I like to think, right now please, of a cybernetic forest filled with pines and electronics where deers stroll peacefully past computers as if they were flowers with spinning blossoms.
I like to think it has to be of a cybernetic ecology where we are free of our labors and joined back to nature, returned to our mammal brothers and sisters, and all watched over by machines of love and grace.
David Morris is the chief insights columnist at Coindesk, which is the premier publication covering cryptocurrency and blockchain.
I've actually been a reader for years, so when David and I connected on Twitter, I knew he'd have plenty of insights to share, which, as you'll hear, he did.
David was previously a reporter at Fortune and has bylines at The Atlantic and Slate, among others.
He's also authored two non-fiction books, Bitcoin is Magic, Internet Money, Mimetic Warfare, and The End of Mere Reality, which he calls, quote, a psychedelic trip through continental philosophy, witchcraft, the history of propaganda, and the dark rituals of the blockchain, end quote.
He also has another equally fascinatingly named book, Blown Horizons, Incidental Notes on Psychedelic Noise, Abstract Rap, and Other Music That Will End Your Mind.
Unfortunately, we didn't talk about music, and I'm sure we could have had a great conversation about that and psychedelics.
But as you'll hear, we start off with some blockchain basics to fill in the holes that we've missed so far in this episode.
And then David and I get to discussing cults and charismatic figures at the intersection of wellness and cryptocurrency.
David, thank you for taking time out to explain blockchain and cryptocurrency thank you for taking time out to explain blockchain and cryptocurrency to Conspirituality I really appreciate your time.
Yeah, thanks for having me, Derek.
I'm a fan of the show, so it's great to be here.
As I mentioned offline, we have gotten requests to cover crypto for many months now, and there are a number of wellness influencers who seem to be curious or diving into that world, which we'll get to.
But the reality is, As I said, I worked in blockchain for two years.
You are really in that space at Coindesk.
And it would be great just to give an overview, first of all, of what blockchain is and what cryptocurrency is, because in general, people People are interested and they see it as a stock and something you can make money in quickly, but I don't think a lot of people really understand the origins and how it's evolved and what it was originally serviced to do.
So I'd love to hear a 101 from you to start.
Yeah, and it's very important for people who are new to this to get kind of a basic grounding because they're, you know, and we'll talk about this in more depth.
There was a very, I think, clear, simple rationale for the technology to be used in certain Settings and those have been, you know, wildly successful when you talk about like Bitcoin and Ethereum specifically.
And that has led to a lot of people trying to use, you know, and now it's a thing that has been going on for many years, but using the idea of blockchain and cryptocurrency technology to sell applications where it's really not fit to purpose and using that to draw in investment money that really is kind of doomed to go nowhere.
So to start from the very beginning, the problem that Bitcoin set out to solve as a project Is this idea that in a digital age you need to have some form of electronic cash that is a financial instrument that you can send over the internet but that doesn't require a central administrator.
The problem with a central administrator, so for example if you use PayPal or something like that, We've seen a lot of cases in recent months especially, but really for a long time now of those sorts of systems censoring some transactions in particular.
So you have, you know, whether it's sex workers or, you know, other legitimate but maybe borderline businesses that can get denied access to payment systems that are basically required in this day and age for somebody to have a viable business.
So when you take something like Bitcoin, the reason it is valuable and has a social utility is because, and we can get into the technology of it as much as you want or don't want, but because it's set up in a way there is no central authority, there is no
Person that the government for example can go to to apply pressure to stop certain kinds of payments That is the the utility of that system is that it allows anybody to transact Anywhere you have an internet connection you can send and receive Bitcoin On a theory and you can do other more complicated things, but similarly it's uncensorable so that's the that's the key thing I think really when you boil down to it is a
Are you dealing with an application where, A, there's finance involved because for reasons that we can get into, the financial element is sort of central to how these systems work, and B, do you need it to be uncensorable?
Do you need it to be something that, you know, bypasses Authority to get something done.
And so anytime you look at something that advertises itself as blockchain or something like that, ask yourself whether that's a necessary part of the setup, whether you actually gain anything from making this a blockchain thing.
Because most of the time when you see some random thing advertised as a blockchain system, there's actually not much point to it being on the blockchain.
And it's just a marketing thing.
So that's, I think, the starting point for our discussion.
I do want to talk a little about the tech.
One of the reasons I became bullish on crypto early, or not as early as some people, but a few years ago, was because of the security protocols.
So beyond a 51% attack, which is Probably not going to happen with at least the major players.
Can you talk a little bit about why the verification process on blockchain is much better than having a password with Bank of America, for example?
Yeah, I mean, the security thing is very interesting.
I think that we're still pretty far from understanding the full potential of it because The way that a blockchain works, the reason it's uncensorable is because you have all of these, they're called miners, although it's a kind of unfortunate and misleading term, but you have people who maintain nodes of the network.
And they are rewarded financially by the system for doing that work.
And they each maintain a copy of the ledger that tracks transactions on the system, whether you're talking about Bitcoin or most other cryptocurrencies.
And because there are all these copies out there, it's effectively impossible, except under some very, you know, fringe situations, for somebody to go in and change those records.
And, you know, there are certainly Examples in the way we've got the internet set up now of why this is an advantage.
You have people who are, you know, when you look at a traditional system or an existing system, I guess, there's all kinds of ways to compromise that data.
And it's not just about, you know, a hacker going in from the outside and taking something or changing something.
It's also, again, about the administrators of the system itself having the ability to manipulate the data.
And, you know, I think that you can sort of start to see why there are, it's not a mainstream problem.
It's not something where, you know, we need to transition the entire system to cryptocurrency.
But there are some specific cases where that solidity, that like, Immutability is the term that we use most of the time.
That this is a thing that's not going to change.
You can't mess with it.
And that's the security.
You do have to be careful because people will start talking about Different definitions of security, particularly when you start talking about data security, for example.
Anytime somebody wants to start talking about putting data on a blockchain and that's going to be secure, that's not really how it works.
A blockchain, for technical reasons, is usually very transparent.
So when you park data on it, it's very hard to put that on a blockchain in a way that is secure, but still maintains the advantages of the blockchain.
It's kind of like building things on top of other things that don't make sense.
So when you talk about security on the blockchain, you do have to be careful.
It's a very specific definition of security.
And I think that, you know, we're going to talk maybe about BitCloud.
And that, I think, is one of the cases where these different definitions of security become a little bit problematic when you start using them interchangeably.
One of my favorite use cases when I was working in blockchain was the possibility of putting medical records on blockchain.
And you can argue that you can do that in a variety of ways that don't need blockchain.
But one of my biggest issues, having had a lot of medical procedures in my life, is how Hard it is every time I change insurance companies and doctors just to access my records, for example.
But you make a very good point, which is that that data can then become available more broadly.
So I'd love to hear what you think the best use cases for blockchain are.
Yeah, well, I mean, very quickly, I think that there is some potential for the medical records thing, basically because of what you're talking about, that you want a unified system.
And that has been appealing to people over the years.
People have tried to do it.
But I think that there's still a lot of work to be done in figuring out how you balance that unified system with, yeah, having the right levels of control over data.
But to your question, I mean, I think that I'm You know, I'm all in on this stuff.
I believe it's transformative.
I believe it's got huge potential.
But I am, you know, somewhat conservative, I think, relative to other people in terms of what I think the applications are.
And I think that the applications for now that we know work.
And that I think have huge potential are financial.
And, you know, we'll get into that and why that is.
But basically, you know, money is inherent to the way these distributed systems work.
The money that's built in the systems is used as a reward for those maintaining the systems.
And that's how the decentralization works.
And that's how the uncensorability works.
It's very hard to divorce the financial aspect from how these things work, which is, by the way, why you, you know, when you hear people talking about like, I'm not into Bitcoin, but I'm into blockchain, that that's illogical.
It doesn't make any sense.
There is no there there when you're talking to people like that.
So, for examples of really compelling use cases, I think that, you know, there's a lot of experimentation and frankly a lot of fraud in all of these.
But when you look at something that's called decentralized finance or DeFi, it runs primarily on a system called Ethereum, and it allows you to use automated systems to send and receive loans and other kind of relatively complex financial transactions using cryptocurrency.
And the automated nature of these things is really interesting.
Theoretically, this is starting to happen in a very small way.
But theoretically, you could, for example, take out a car loan on the blockchain.
And there are, you know, things that can happen in ways that might reduce some of the, you know, labor involved in doing that through a traditional bank.
There's some really interesting possibilities there.
But very broadly, if you're trying to just be very conservative about how you define these things, Any blockchain application that doesn't have some pretty inherent financial element, I look at very hard.
If it's not set up to do something financial, There's an extra added risk that somebody is kind of selling you a fantasy that's not actually going to work out.
One of the use cases we were bullish on when I was there was voting, and there was a lot of problems.
We actually did do a board of directors voting on blockchain for our members at that time.
That's a very small use case, but that is something that has been talked about, especially right now with Voting being in the news every day.
There is no financial incentive on the face of it there, though.
But would you see that as a use case that could be realized in the future?
Well, again, I think it's an interesting concept.
And, you know, if I if I try to do it justice, I think the idea is that you have a permanent record of votes that can't be manipulated and therefore that makes it more trustworthy.
But again, there are problems in terms of the data structure.
I don't think it's an insoluble problem and there might be some value to be had there.
But so far, the experiments that we've seen have been really uncompelling because you end up with things like, you know, permanent records publicly viewable of how people voted, which is not how you want a system to work.
And so, you know, again, I think that When you look at these second order cases that are not strictly financial, a lot really comes down to the very nitty gritty details of how you design the system.
And, you know, it ultimately turns into kind of a problem for the investment structure of these systems because It's very easy in cryptocurrency, as we've seen over the and blockchain stuff, as we've seen over the last few years, to sort of throw out a big idea like blockchain voting or a blockchain social network.
And those are like buzzwords that people get really excited about.
But they don't necessarily, when you're a member of sort of the general public, you have to, you know, have a lot of insight into incentive design, into data structures, into, you know, You know, blockchain technology that's hard to understand in itself to be able to evaluate whether a specific application actually is going to work.
And so that's how you end up with companies that have a lot of investment on a very thin idea that winds up being executed in a way that just doesn't make any sense because of the structure behind it.
So, you know, it's just to say that, like, the voting thing, kind of interesting.
Really matters how you execute it and therefore there can be big disconnects between like interesting high-level idea and a system that doesn't actually work all that well a lot of the time, at least on the first couple tries.
So again, when you're thinking about getting involved in these things, just to highlight that there's a lot of nuance, like just the fact that somebody is going to put a system on the blockchain doesn't mean it's going to add any value.
Well, I do want to get into the wellness aspect, but we were talking about finance and I think the origin story of Bitcoin is still, you know, shrouded in mystery with Satoshi, but some people have speculated that it comes from the anarchist movements in the late 80s, early 90s, from the very early internet days.
And the whole concept was to take down the financial system.
But it seems now that the financial system is a main driver behind crypto.
Alibaba has the most blockchain patents right now.
Mastercard, IBM, and Bank of America also have a lot of blockchain patents.
So you see that the very targets of what the original intention of blockchain was for, people are now getting involved in that.
How much of that How much decentralization do you think is possible if we're going to move into an area of private blockchains, of the Chinese Communist Party doing a digital currency on a private blockchain?
Is there room for both private and public blockchains?
The history is interesting.
And to make a slight distinction, you know, we don't know who Satoshi Nakamoto, the creator of Bitcoin, is specifically.
And I do want to talk more about that because it really speaks to this ethos of like, you know, the entire point is you don't want a leader.
And that is an important idea that is unfortunately a little bit eroded these days.
But the actual, you know, it's pretty well documented, the inputs into the ideas behind Bitcoin.
And I highly recommend for people who really want to dive into this, a book called Digital Cash by Finn Brunton, B-R-U-N-T-O-N.
He gives a history of the, you know, we now maybe refer to them as crypto anarchists, but there is, as you said, a long legacy of people
Starting in the late 80s, we're really intensifying into the 90s, and of course, this all leads up to the 2008-2009 invention and deployment of Bitcoin, where, yeah, you're trying to create an alternative to the traditional financial system that basically mimics what people thought the early internet was going to be, which is just everybody can publish everything, it's a complete free-for-all, no rules, and
That does still exist today for sure and I can get into it but for technological reasons it again is pretty much impossible to shut down Bitcoin or any other major blockchain network that is actually robust and has users.
The entry of big corporations into all of this, I would say two things about.
First is that a lot of it happened, you know, a couple of years ago when there was a lot more, I think, even a lot more than there is now belief that long term, this blockchain technology could be a big deal, that it could apply to everything.
So when you look at things like IBM's blockchain project, they, for a couple of years there, spent a lot of money, hired a lot of people, kind of ultimately realized that there wasn't a whole lot that they could benefit from.
And IBM has since scaled back its blockchain operations a lot.
A lot of the time you'll have big corporations kind of, again, not too much different from retail scam investments saying, we're going to do this thing on the blockchain and they'll get a little maybe stock bump or something like that.
But it doesn't really amount to much.
The actual corporate blockchain applications are pretty thin on the ground.
I mean, who knows what the patents will wind up being worth long term.
But ultimately, you know, there's just not a lot that I think a major corporation has to gain from this because The entire point is nobody's in charge, which means it's very hard to get profits to flow to a central person or entity.
And if you do get profits flowing to a central person or entity, you're then legally liable for the stuff that's happening on that network, which is what you don't want in the first place.
And so there are some pretty serious boundaries to what a big organization can do with the technology.
And the fact that they're getting into it is, I think, substantially about like, we want some hype.
We want to look cool.
You mentioned scam investments, and obviously there's been a ton of those.
Talk briefly as we transition into the wellness space about how companies do an ICO and then make a ton of money and then just disappear.
So the basic thing
that is behind all of it is this is largely a product of well I mean it could happen using other technologies but a lot of it has happened on the Ethereum network where they have a mechanism called ERC20 which basically allows you to mint your own cryptocurrency without actually building your own network and for a couple years in 2017-2018 a lot of people were doing these initial coin offerings where essentially the argument was
We have created a new cryptocurrency.
We're going to use it for X, Y, and Z applications.
And then just like Ethereum and Bitcoin, it's going to become worth a million times what it is today.
And because it was so easy and is still so easy to create these coins, people will basically print a bunch of them, give it a flashy name, Right up a what's known as a white paper about their ideas of what they're going to do.
And often these white papers can be very superficial.
And then most of the time, or at least very often, they'll pay either people who are influential within the space or more recently, people who are just famous in general, pay them to talk about the coin.
And then they'll get people to buy it.
And usually, not usually, but when these are bad actors, they'll get people to, you know, whether you're paying with Ethereum or Bitcoin or another cryptocurrency that has much more durable value, they'll just, you know, get people to buy their coin on the basis of an idea that they've laid out roughly in a white paper and isn't usually all that viable.
And then they'll take people's Bitcoin and Ethereum and they'll either disappear sometimes Or they'll just continue sort of working on the project as the price of their coin relative to real cryptocurrencies declines.
And then eventually they can just go, oh, well, it didn't work out.
Sorry, we'll keep your money.
And so that's the basic way that these investment schemes work.
And the important thing to point out is that this is different from like a stock market because there's basically no barrier to retail investors just buying these things on the internet.
And so there's fewer layers of due diligence being done, for example, by the investment banks that would screen an initial public offering of a stock and give you maybe some insight into what's going on, like what's the actual revenue, Who are the people behind this, for example?
None of those standards are in force for these initial coin offerings.
They're now totally and clearly illegal in the United States and other regulated environments.
So, you know, FYI.
You mentioned to me when we first started talking that you also have an interest in MLMs and cults, which are obviously things we cover often on this podcast.
What is the crossover that you've noticed between an MLM or maybe even a cult with cryptocurrency world?
At the risk of overstating it, in its very worst cases, Cryptocurrency is the perfect way to monetize the psychological dynamics behind an MLM or a cult.
And, you know, we can talk a little bit about, I think, perhaps the most developed version of this that I've seen so far, which is called BitCloud.
And that's true because there's an adoption curve.
And in MLMs, it's really close.
The parallel to cults is a little bit more distant, but you know, MLMs, right?
Like the promise is you get on the ground floor, all of these people under you are going to be your downline.
They're going to be generating revenue that you get.
The version for cryptocurrency is a little bit different, but still kind of spiritually similar, which is, you know, if you buy this token right now, And then other people come in later, they're going to want it at a higher price.
And there are some legitimate arguments behind that.
In some cases, these are real systems that actually have demand.
Again, mostly they're things that have to do with finance.
But the element of that that really becomes like an MLM or a cult is that Once people have this financial stake in a network, they then become advocates for it.
And they have every motivation to do that.
And, you know, to the exclusion of considering, you know, maybe there are some problems with it.
And so they just become, you know, relentless shills is the term that we use.
Or, you know, I don't know what the equivalent would be in a cult, but, you know, recruiters.
And so you have now, in addition to The same stuff that comes with an MLM or a cult, which is the sense of belonging, this idea that you maybe have somebody who can give you some guidance in your life.
You now have a financial incentive to advocate for the ideas behind the network.
So, you know, that's where some of the, frankly, worrisome and scary parts of cryptocurrency come in for sure.
They are, you know, it's a monetization of collective activity.
In a way that can produce some real worrying behavior, I think it's fair to say.
I noticed last week that a man named Shaman Durek has a big cloud account.
Last night when I was researching for our talk, I saw that Goop as a blockchain and crypto 101 explainer on their website, which is interesting.
And then just this morning, you told me that Gwyneth Paltrow has a BitClout account now.
So can you talk to me more in depth about what BitClout is?
Yeah, so this might take a little bit of explaining, but BitClout is a very controversial attempt to build a social network that is in some, frankly, fairly misguided ways based on a blockchain.
And the way they've done this is you almost have to express some admiration for how nakedly they are manipulating people to get them to participate in this.
What they did was they set up, um, they basically at the beginning of the project, which launched at the beginning of the year, more or less, they scraped the Twitter data for very popular people.
Well, I'll say this and then I'll backtrack a little bit.
What they did was they set up profiles for very popular people.
I haven't checked to see whether I have one.
Probably not.
I'm not that influential.
But they set up these profiles.
They actually scraped the data from Twitter, which is illegal.
They took people's profile pictures and profiles and put them on their own website, which is illegal.
But then what they did, and this is, you know, it's evil genius, and there's a lot of evil geniuses involved in crypto.
What they did was they then assigned a monetary value to these profiles through a complicated system of buying and selling tokens.
And they made it so that people, these influential people whose profile data they'd stolen from Twitter, could activate their accounts, claim these accounts that had already been created for them, And at that point, they get access to a pool of tokens that they can sell.
And the value of those tokens that has been generated by people already on the platform can seem really large.
You'll actually look at the website and see like, oh, my profile is worth $40,000.
I should probably claim it and then sell those tokens and get that $40,000.
It's very hard not to not to be susceptible to that.
Um, however, um, they've engineered it in some interesting ways.
So, uh, for example, most people, if you want to claim that $40,000, uh, you have to buy a couple of tokens yourself, which can be several hundred dollars.
Uh, you do that with Bitcoin and you send it directly to the site, which is a whole other, uh, kettle of fish.
And so they've created these incentives for people to get on the website.
They've led with the most influential people and they have a token.
It's BTC or something like like it.
It looks a little bit like Bitcoin, which is, again, another sketchy part of the project.
And those tokens can be bought and sold.
They've created this incentive system to get influential people on the platform and create some hype.
My guess is they did not expect Gwyneth Paltrow to buy her own token in order to activate her profile.
My suspicion would be that they've worked directly with a lot of these influencers to make it free for them to activate their profiles, which benefits them because, oh, Gwyneth Paltrow has a BitClaw profile.
And people are going to get interested.
Now, to backtrack on two things, one, just in general, this is the really sad part about how cryptocurrency, not cryptocurrency, how powerful.
Blockchain systems often market themselves, which is by leading with influential people.
We talked a little bit about John McAfee.
He was this like colorful guy who for a time was selling his influence to promote a lot of really bad and scam projects.
And so it's just kind of a sad testament, I think, to the weaker side of human nature, which is that there's this big new thing that people are interested in.
It's specifically designed to avoid a leadership structure that makes people susceptible to charismatic influence, you know?
And yet that's what people immediately flock to.
So, you know, BitClout, it's a sad testament to the weakness of human nature.
A few important things to point out and a few reasons why I would be very cautious if you're thinking about getting involved in this.
And one thing that is very concerning Now, this is a project that has made a lot of hay out of the involvement of some fairly big name investors with people like Anderson Horowitz, venture capitalists who have a strong track record in technology.
And in some cases, that's a real endorsement.
Unfortunately, in this case, I'm quite disappointed in the involvement of some of these entities, because what you've really got is these are venture capitalists who bought a bunch of tokens on this system that has a kind of a short term, very big alpha, but not necessarily a long term life.
So a lot of people bought in at very low prices.
And there is a I'm actually going to pull them up right now.
A reporter for the website ProDos has been following the sales of these tokens very closely, and a lot of them are already getting dumped.
His name is David Kanellis.
It's at D Kanellis on Twitter, if you're interested in looking.
But a lot of people who bought these early at, you know, I'm just making these numbers up, but they were able to buy tokens at like eight cents, and now they're already able to sell them for $100.
So the involvement of these people doesn't actually imply any faith in the long-term viability or legitimacy of this project.
It's really just a short-term play.
And the same goes for a lot of the influencers who have bought in, who have also just activated their accounts, sold the tokens that they were awarded as a basis of that, and then, you know, don't really have anything to do with it.
There's also, and this is I think an important thing for non-technical and non-financial people, is that you can really sometimes look at the signals that don't have anything to do with math or money and get a solid picture of what's going on, or at least some hint.
And one thing that people who are not familiar with the space won't pick up on is the guy who founded this is pseudonymous.
He uses a screen name.
Some people think they know who he is, but it's not really confirmed.
And the name he goes by is Diamond Hands, and that really says a lot that people are not going to pick up on unless they're really familiar with it.
Diamond hands is a phrase that is used by basically day traders and speculators.
Increasingly, unfortunately, it has some stuff to do with with Bitcoin and long term holding.
But it's really more and more associated with people who are speculators, money focused.
It doesn't convey a real commitment to ideals or, you know, philosophy or anything.
Really, it leads with the idea that this is about money.
And a lot of the things about BitClout really suggest that that is the priority.
For one thing, until relatively recently, you could buy BitClout with your Bitcoin, but you couldn't then turn around and sell the BitClout.
There was no market for it.
For months and months, people were just sending Bitcoin to this website that then displayed your BitClout balance.
And there wasn't an actual market for it.
And that's particularly concerning because when you look at, for example, the Elon Musk market cap on Bitcloud, that's essentially fictional.
There's no clarity into how the prices are set for the tokens associated with people's identity on this network.
So as far as we know, publicly, those numbers are just being made up.
And so when you look at that website, people are going to get excited.
They're going to say, oh, this guy's big cloud is worth X amount of dollars.
I'm going to buy some.
Maybe there's some upside down the road.
None of that seems to have really any grounding in market reality.
And in this way, it's really similar and frighteningly similar to a project that people can look up called BitConnect.
BitConnect was another blockchain.
It was a real cryptocurrency.
It really existed.
But there was no market for it.
And the operators posted prices for the assets on their own website, even though there was no public market for it.
And it turned out to be a $4 billion fraud.
People lost immense amount of monies.
Lives were ruined.
People involved are being sued now by the SEC.
And, you know, I'm not saying that that's what BitCloud is about, but they have set the system up in such a way that it very much resembles some sketchy prior projects.
I also, you know, by way of warning, and this is sounding like a lecture, but hopefully people find it useful.
I want to read something from BitCloud's vision document.
This is a very high up key paragraph.
The inspiration for BitCloud hinges on one key insight.
If you can properly mix monetary speculation with social media, you not only end up with a novel product that creates innovative ways for creators to monetize, you also end up with a totally new business model that solves these problems and that isn't based on ads.
Now, what I take away from this particular passage is that this is a system that wanted to build A social media platform that had market elements, and the market was the important part, not fixing any actual problems with social media.
Now, they do get into some of the ways that parts of the way Bitcloud is set up can do some interesting stuff for social media.
You can have curated feeds that are off-site, and those are all important things.
But it really honestly saddens me that this is the way that these ideas are being brought to market in such a sort of clearly financially incentivized and frankly misleading way.
And I just think it's something that nobody should be involved in if you're looking at long term.
What you're saying is that the perceived price of BitClout coin is tethered to the star of the person.
I mean, if you go to the site now, Elon Musk is number one ranked and he hasn't claimed his profile.
I think the top person to claim it seems like is Balaji, that seems active on the site.
And just so people know, it's really just in terms of social networking, it pretty much is like Twitter, where people just post tweets, and then it's their star that really matters.
But you've also written about celebrity crypto endorsements, which I kind of consider tied into this in terms of Different blockchains, different coins, using people's star power to drive people's attention to them.
Was that a fair assessment?
Yeah, and it's a major red flag for sure.
I mean, anytime you see somebody who's Tweeting about an obscure project You should you should be be careful or you know participating in it or anything because we had a case a couple weeks ago Kim Kardashian Posted an Instagram story about something called emacs which I personally believe to be a Deceptive and ill-intended project.
And it's probably the biggest social media promotion of a cryptocurrency ever was her story.
Now, in her case, she had a little disclaimer.
This is hashtag ad.
So she was paid for that and she acknowledged it.
And that's legal protection for her.
But in that case, and in a lot of other cases, people will tweet about or talk about projects without that disclosure, but they actually have been paid.
So there are many examples over the past five years ago of people, particularly celebrities, saying like, oh, I'm a big fan of this new crypto project, you should check it out.
And no disclosure, no discussion of why they're tweeting about it, but it turns out they were paid by the project.
And it was an illegal promotion.
So Floyd Mayweather, for example, got fined a total of about $615,000 for tweeting undisclosed promotional stuff about a project called Centra back in 2018.
And it's still ongoing today.
So anytime you see somebody who's an influencer who's trying to promote one of these projects, honestly, just stay away.
It's a negative.
It's not a reason to be interested in this stuff.
Occasionally, of course, somebody will be legitimately interested in something, but it's a very, very rare situation.
Tied into that, especially since the pandemic started, I can't tell you the number of people on my social media feeds who have been asking for crypto advice to Facebook, which is just absurd on its face.
Because when you have a lot of people who have no idea what it is, then talking about their anecdotes, it doesn't lead to anywhere good.
So what advice, though, you being someone who is working in this daily, for somebody, let's say in the wellness space, since that's predominantly who listens to this podcast, who is genuinely interested in the functions and perhaps, I don't want to say investing, just getting involved with crypto in any way.
Like, what would you tell them as they try to wade through this sea of deception and, you know, paid endorsements and such?
I think that, you know, the general advice for everything these days is to focus on media literacy.
Be sure that you're getting your information from somewhere reputable.
And, you know, it's this is the problem of our era.
Right.
Which is that people who are new to something are inherently easy to deceive because they don't know what they don't know.
And so the simplest advice I would give would frankly to be read Coindesk, read other, you know, specialist outlets that are really focused on this stuff and whose reputation hinges on getting it right.
A couple of other sites that are good are Decrypt.
Decrypt is actually maybe a little bit on it's accessible.
It's intended for the general public to a great extent.
And then there's another site I like called The Block, which is more of a professional financial professionals outlet.
But, you know, just read stuff from reputable outlets.
Like there are a lot of bad crypto sites, a lot of sites that take payment for publishing stories about sham projects.
So be very, very discriminating in the information that you consume.
Trust nobody.
Trust absolutely nobody.
Because most people are trying, like, statistically, most people are going to be trying to sell you something.
And I guess the final piece of advice would be, you know, start with trying to understand Bitcoin.
Try and learn, you know, how mining works, how hashing works, like really familiarize yourself with the basic technical concepts.
And from there, that'll give you a better platform for figuring out whether something is a legitimate application, whether there's some like, you know, actual reason for this thing to exist.
And that'll help you make some smart decisions.
So that's my general advice.
But mostly be very cautious because most of it is a scam.
Well, you work for Coindesk, but I will follow that up by saying that I've been reading Coindesk for years, well before we got in touch, and I will second that, that that is the number one source to turn to if you're interested in learning about blockchain and crypto.
I do want to end on a bit of speculation and not about costs or anything like that, but during our talks or one of the articles you've written is actually about Lina Khan being in the Biden administration now, which a lot of corporations are probably not happy about because she is a big antitrust legislator.
That's been a personal pet peeve of mine for actually many years, particularly around antitrust, around Ticketmaster, for example, because I was involved in some blockchain ticketing projects and seeing how corporations consolidate power.
Of course, Facebook has recently was sued by the FTC in over 40 states and the federal judge threw out the lawsuit.
Doesn't mean it's over.
But, you know, we're seeing movements to break up Amazon.
Elizabeth Warren talks about that.
So with Lena Khan's appointment, you've written about this, that, you know, it could potentially bode well for crypto.
And I wonder if you see this as a sign that we can actually move toward a more decentralized And progressive way of doing business, at least in in America, because other countries are arguably not faring so well on that front.
Yeah, I mean, I think it's it definitely still remains to be seen the actual impacts, but at least philosophically, you know, the breakup of big tech monopolies would definitely create more opportunities for people trying to build, you know, I'll be blunt again, people trying to build the real version of what big cloud is pretending to be.
And one of the key things that Nina Khan is focused on and has been focused on her entire career Is this idea that social media companies need to create data portability standards so that, for example, if you're a Facebook user, Khan and her allies believe that you should be able to hit a button, download your Facebook profile, and then go to another website and upload it that, you know, organizes the data in a different way, for example, or uses a different algorithm, or just has a different community.
One of the sort of new arguments for this new generation of monopolies is that if you lock people into one system, that can be anti-competitive, even if you're not charging them for the service.
So that's one example.
And, you know, I will sort of go back around to it.
But one of the things that's so frustrating about BigCloud is because it is such a compromise.
It's sort of a kabuki performance of some of these ideals.
And more generally, this integration, for example, another antitrust issue is Amazon, right?
They have this vertical integration where they're able to use the data from their merchants to decide whether they're going to make competing products of their own, which is just wildly dangerous for our economy, our society, innovation, all these things.
And, you know, when I was talking about the difficulty of doing data on a blockchain, there are ways to handle it that are sort of novel and interesting.
One, just kind of picking an example out of a hat, but there are these things called zk-SNARKs that allow you to wrap data and control interactions with it in a way that is quite interesting.
It's not necessarily an inherently blockchain thing, but it kind of comes out of that world and has been influenced by it.
And, you know, I'm spitballing here a little bit, but once you start breaking up these data monopolies, you can have things like an Amazon-like stack where different elements are actually owned and controlled by different companies, but their data can interact in productive ways that are still controlled without allowing the same kinds of abuse that you get when everything is siloed in one company, the way Amazon is.
For example, Amazon claims that there are, you know, walls between different units that monitor sales data and those that create products, but you can never trust that, right?
And frankly, there's no reason to.
It's probably not true.
And so once you have different companies doing these things, you know, whether it comes from somebody breaking up Amazon or somebody just forcing Amazon to have interoperability with competitors, then you have opportunities for a lot of things, but some of them might be blockchain based.
I'm definitely not saying that specifically she's opening up a space for blockchain stuff, but it will be on the menu.
