WBD202 Audio Transcription
Beginner’s Guide #17: Fuck You, Bitcoin! with John Carvalho
Interview date: Friday 6th March 2020
Note: the following is a transcription of my interview with John Carvalho. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
In Part 17 of the Beginner’s Guide to Bitcoin, I talk to John Carvalho. We discuss removing power from governments, why altcoins are a poor investment, and why Bitcoin is ‘fuck you’ money.
“I feel totally impotent to participate in politics, to vote to make the world a better place... It just feels minuscule. But when I hold Bitcoin, even just buying a little bit of Bitcoin, it feels way more powerful like I’m doing way more for the future of everybody.”
— John Carvalho
Interview Transcription
Peter McCormack: Welcome back John, how are you?
John Carvalho: I'm good, thanks for having me.
Peter McCormack: Always a pleasure to have you on. I've been doing this Beginner's Guide to Bitcoin, it's proved pretty popular and from the very start you knew I wanted you at the end. I wanted to conclude it with you for a number of reasons, but mainly because I think you're just the most hardcore Bitcoiner I know. I've covered a lot of subjects. I started off with Andreas and covered why we need Bitcoin. I did the technical side which Shinobi, I've done monetary policy with Dan Held, I've done macroeconomics with Travis Kling, so many shows!
We've done 16 shows, but here we are, this is the final one. This is the conclusion to wrap it all up! I want to get as much John Carvalho hardcore Bitcoiner in this as I can into one show. I want everyone listen to this as the final one to be bullish as fuck about Bitcoin and to have absolute no doubt. Are you up for this? Are you ready for this?
John Carvalho: I am! I'm actually quite honored that you're choosing me for this aspect of your series because to me it's like absolutely the most important thing, like the fuck you side of Bitcoin, is Bitcoin to me.
Peter McCormack: All right, so listen, we're going to start off though, for anyone listening John, why Bitcoin for you?
John Carvalho: Like I started to say just then, it is pretty much that. I think that we have a lot of human rights talk and a lot of freedoms and a lot of achievements we've made as a species, overcoming our own idiocy and greed and evilness that we can sometimes have. But I don't actually think we've ever achieved true freedom for ourselves. I think the current government dynamic with the way things operate, with border controls and money controls and all of the situation, we're all still kind of slaves in a way.
It feels that way when you're traveling and you're crossing these borders or getting letters from the government about your taxes or whatever. Just every interaction, for me at least, there's this underlying paranoia because you know you're kind of their slave in a way and that any moment if there's something they don't like about your behaviour, they can just lock you up and it's over, or kill you or whatever.
For most people and most situations it never gets to that point, but Bitcoin is like the first time I have ever in my whole life and probably all of us have had an opportunity of achieving an ideal, a kind of better setup that maybe dismantles the power of governments in one way and makes them to have to behave more like what we designed them to, to serve the people and provide centralized efficiencies for us, which I think is what they're really supposed to be for. I'm not like anti-government, I'm just anti-evil and anti-corruption. I think the current design allows for too much corruption, too much inefficiency, too much basically arbitrage of ignorance and that Bitcoin helps cure that.
Peter McCormack: How relevant right now, I mean over the last... You know I've been traveling a lot over the last year, but especially recently I've been out South America, I've seen the riots in Chile, I've seen the problems in Bolivia, I've been out to Venezuela, under an authoritarian rule, I've just been out to Turkey and at the border with both Syria and Greece and it feels like there's chaos everywhere right now. I know people have said to me, like my father said to me, he said, "it always feels like that", but right now, for myself personally, I feel like this is the most chaotic time I've ever lived through. So how much more relevant is Bitcoin now in this kind of current environment?
John Carvalho: I'll have to kind of side comment all of that. I have a saying, if you're looking for trouble, you're definitely going to find it and I think that maybe you do a little bit of that because it's your job, you're looking for the chaos and you're covering the chaos, so of course the world is going to look extremely chaotic to you. I see it too, but I don't think it's all bad. But in the context of what I think you're really asking, yes, obviously if you can get your hands on some Bitcoin in a situation where there are other people in your environment that will accept the Bitcoin or do business with you and kind of skirt the system that is oppressing you at the moment, yeah, Bitcoin's serving a great purpose there.
It is providing a little added freedom, a little more mobility, a little more security and safety for you hopefully. But as you've come to learn and now report it to others, this is not always as easy as it may seem. Bitcoin isn't always the perfect answer for every situation of oppression and this kind of thing. It can be and it gets better at it every year and everything we do, every amount we build out this economy, but for now it's just doing what it can and as best it can.
All we can do is help educate people that it exists and how to use it and what kind of purposes it does serve. But things like volatility and other shortcomings to people in these situations that need this kind of freedom out of their money, those have kind of solutions that are coming around the corner too. Even then, for now, Tether isn't so bad for short-term trust risk if you don't want volatility and a lot of other solutions are coming around. We can get into this a little bit more later as well with Lightning.
Peter McCormack: I had to moderate a panel in the summer at an event and it was Brave New World versus 1984. I'd never read Brave New World, I'd read 1984 and I understood that kind of Orwellian future which very much reflects I think a lot more ... I would say a lot more just somewhere like China, whereas Brave New World feels a lot more like the US.
But I do feel like we are slipping closer and closer to the art becoming a reality and the futures that these books have predicted. I feel like the growth of technology, while it's been great for us, enabled so many things, the internet's amazing, in some ways mobile devices are amazing, what's come with that has been more technology for the government, for the state, more surveillance, more control and with the digitization of money outside of Bitcoin, it feels like we've got even more financial surveillance and less privacy.
So I'm feeling like I'm seeing that dystopian future, those pieces of the jigsaw puzzle coming together now more than ever, and that's why I'm... That was kind of what the point I was asking you about, is that even now, Bitcoin is even more relevant as control and surveillance overall money is growing.
John Carvalho: Well it's tricky because there are also people who argue that Bitcoin makes surveillance easier and there are dangerous sides to that as well. Yeah, I think that Bitcoin at the base layer probably is better off being transparent and not private, and people can stick their fungibility and privacy better on layers and kind of detaching from the blockchain system. So yeah, I don't know, it's tough.
Peter McCormack: So for you it's a lot more about the taking control away from the government and taking corruption away, less so about then offering that immediate privacy now?
John Carvalho: Don't get me wrong, I'm making this point because I think that as a design for Bitcoin that it's necessary. It's not that I don't value privacy, I just feel like to do privacy properly, you probably need to have the base layer still be transparent, that's all. You need to make sure everybody can rely on this, for lack of a better way to put it, visually auditable ledger as the basis for your money, because this is the only thing that Bitcoin's for, it's to store value.
If you want to store value, you want it to be dead transparent and know that everything is legit. If you want to achieve privacy and other things, I think we can find other ways, and we already are finding other ways. So yeah, I think that privacy is super important and that you can still achieve it if you're smart. Mostly people I think try to achieve more privacy than they really need and there's a little bit of privacy larping on crypto Twitter and stuff like this.
The people who really need privacy, you're going to have to do a lot of advanced things to try to stay truly safe and private on the internet that go beyond just how you manage your Bitcoin.
Peter McCormack: Yeah, so I think right now true privacy for any Bitcoin user is beyond the technical means of most people.
John Carvalho: Probably.
Peter McCormack: But it's something I hope will be abstracted away in the future and will become almost natural and will be built into the product. But can you give me a window into... Because you've got this kind of grand vision of the future. The way I look at you John, is that you're picturing a Bitcoin world a few steps ahead of everybody else. Can you give me a window into that kind of future you've seen and where you're seeing this kind of Bitcoin world?
John Carvalho: I don't know that I see something steps ahead of other people's, but I'm certainly trying to at least maybe create models of how it could actually work and be practical about these models and maybe play a role in architecting, helping Bitcoin reach a model of basically alternative economy for Bitcoin. So if I were to zoom into the future, what I would say is I want to make sure and I want to help be a force to make sure that anybody always has an option, an alternative economy where they don't even have to think about bank accounts, they don't have to think about the government, whatever it may be. There's just a free market, an alternative market, a permissionless market that I can enter where all of the rules are entirely transparent, I know what to expect, and any trust relationship is completely obvious.
If I'm holding say a Tether token, I know that Tether is dollars issued by this central entity and the relationship is very clear and those kinds of things, maybe I think could end up tolerable. Maybe we can do something better than Tether, I don't know. But yeah, in the end I think that the future for Bitcoin is an entirely alternative economy where people completely opt out of the banking system, any limitations on money, traditional money, and just can be able to completely operate internationally and be fully agile within this economy without getting permission.
Peter McCormack: So you see in that future whereby we have no need to go to a bank account, give them our information to create an account and have permission to take money in and out, or perhaps have limitations on what we can take, or some scenarios that would seem reasonable. I think in the US I saw recently that FinCEN went into somebody's bank account and took money out, which is something that amazed me, or somebody else who was traveling from one country to another with some gold and they wanted answers where it's come from and they had to hand it over. You're seeing a future where it's just like, "fuck you, this is my money. You don't know what I've got and you can't touch it. I can completely operate outside of you and you hold no control over me."
John Carvalho: Right! The only way you can have freedom is if you're operating in a system where you're free and Bitcoin isn't free either. It has a lot of rules, but they're completely transparent rules that you can rely on. You don't have to trust it'll change or be disrupted. So you know you're getting into from the start and it's fully optional, you opt in. Whereas the system we're born into for most of us is not like that. We're born into a whole government system and tax system and payroll and borders and all of these things that affect basically keeping us as cattle or slaves for lack of a softer term and I don't think that having private money is a crime.
I don't think privacy is a crime, I think it's the only way you can have freedom and I don't think that regulating is a way to fight crime. Fighting crime, yeah, it was nice and convenient to be able to tap people's cell phones and spy on their internets and seize their accounts, but it was never really crime-fighting. It was never really fixing societal ills, it was just like catching and just putting out a net on the public and seeing if you could catch some bad guys while you caught good guys too. To me it's lazy management of society, it's lazy governmenting for lack of a better term again. I feel like Bitcoin could really realign things to get people to behave much more properly with incentives.
Peter McCormack: So do you think people are ready for this? I know it's a broad question because some people are and some people are not. Someone like Matt Odell is ready now, someone like you is ready now, I'm kind of like on my way there, but do you think the world is ready for people to have this completely separate economy where you can operate outside all traditional systems?
John Carvalho: My first answer is I don't give a shit. It doesn't matter if it's ready, it's going to happen when it happens whenever. It doesn't matter.
Peter McCormack: Fuck you Bitcoin!
John Carvalho: Yeah it's true, and in the end sometimes, I've said this on... I don't know if it was our interview or another interview, but sometimes I wonder if all of our debating about Bitcoin and kicking and screaming and debating and arguing, if it's all just like completely meaningless and all the things were going to happen the way they were going to happen regardless of how much we debated why they happened or when they'll happen, a kind of deterministic thing. But I think that my guess is it's probably not even the right way to form the question. I think what's probably... That's like a misleading question.
I don't think the world has to be ready for this, I think this is the way the world already is. All of the stuff that's happening that you're worried is going to happen because of Bitcoin already happens, just not on Bitcoin. I don't think Bitcoin creates crime, I don't think Bitcoin creates evil, it's just a tool. If evil decides to remap itself onto Bitcoin because there are incentives for it to do so, then yes, maybe that's getting to the heart of is the world ready. Is the world ready for money that actually... Suppose Bitcoin becomes confidently private, is the world ready for money that allows terrorists to transact with each other, paedophiles to transact with each other? Is the world ready for that?
I think my answer remains the same. Those people are already doing that business and they're already using some means. So Bitcoin doesn't cure or create those behaviours, it's just a format. The world doesn't need to be ready, it doesn't matter, this stuff's already happening. Bitcoin is not going to happen, probably not going to make it happen more or less. It's just going to make it maybe more apparent, maybe more topical, you know? I'd rather have the society talking about why paedophiles are a problem and what to do about it, than being very proud that we caught paedophiles sending money to each other.
Peter McCormack: Right, because the money is not the problem, because if you're going to do that, you can blame computers, mobile phones, electricity, and every other part of the jigsaw puzzle...
John Carvalho: The names doesn't do the stabbing!
Peter McCormack: Yeah, guns don't kill people, people kill people. Okay, that makes sense. So back into the format because this is a conclusion show. I'm going to have a bunch of people listen to this John who've gone through the series and they might still have some questions for themselves, but I just want to run through them and I want to get your version of them and this gets kind of almost like a summary of all the shows I've done. But what is it that makes Bitcoin unique for you?
John Carvalho: The asinine asshole answer is cryptography is what makes Bitcoin unique. But this gets into, I think maybe people talk about Bitcoin being a Schelling point, having network effect, being the first and I think that is true. I think that is kind of what makes it unique. You can't be the first rare cryptographic blockchain, you can't be the second one and then also claim that there's a digital scarcity concept, because then there's a third one and a fourth one and it just gets silly. So there is that kind of advantage of being first, there's a network effect advantage and the fact that it's probably going to be really hard to unseat this Schelling point.
You can make as many shit coins as you want and it's just more shit coins in a sea of shit coins and at some point, people are going to want to stick their head out of the water and see where the lighthouse is, and the only thing sticking out is Bitcoin. Every other thing that sticks out to somebody is like an oasis, an illusion. It's just because they're greedy or they're delusional, they just think they can make more money off of the second Bitcoin than they can make cooperating with the first one.
It has nothing to do with technology, and this is kind of a scam that people want you to believe, that you're being anti-intellectual or anti-technology if you don't support our clients, but yeah, Bitcoin is unique. It is the only Bitcoin. You can make forks and you can make new versions and new names and new brands and new designs, but they just can't be a Bitcoin because no two things are actually fungible in the end. So Bitcoin is definitely unique. Bitcoin is in my opinion our best chance. Bitcoin maximalism is...
I've mentioned this recently online on Twitter and stuff, Bitcoin maximalism, part of the idea here it was never about being scared of competition or thinking that new tech can't be improved on, you can't improve on Bitcoin tech. It's nothing to do with that. It was that this works if you actually understand that Bitcoin is a ponzi for the people. It is a headless ponzi, and the more everybody converges on this, the more everybody benefits out of it.
The only way to get central efficiency out of Bitcoin is by getting everybody to use it. You want maximal decentralization at the node level and you want as many... But the way to truly achieve decentralization is not via Bitcoin nodes, it's via human nodes. You need as many people in here as possible.
Peter McCormack: It's funny, you say ponzi for the people and the more people who join, the more benefit we get. But it isn't just a financial benefit, right? I mean, obviously there is the financial benefit, the number going up...
John Carvalho: No, it's the circular economy benefit. When we talk about a circular economy, this concept doesn't come from just from keeping everybody locked in here, it's an efficiency concept. It's about recycling, it's about keeping things within the loop and not creating redundancies where you're doing exchanges and transfers in and out and having to always have this entropy, this grind on everything you're doing. If you keep it all in one loop, then things are much more efficient, you reuse things and it's a better way to do an economy. It's economical and that's really what it's about.
Peter McCormack: But we can safely say that with every other shit coin that has ever existed, every factor of Bitcoin's tried to be improved upon. They've tried to improve upon the block size, and the speed...
John Carvalho: Yes, so every nob has been turned, every magic number has been adjusted, but maybe I'll jump ahead. I think you wanted to ask about altcoins.
Peter McCormack: Yeah, I mean that's leading...
John Carvalho: This topic is overlapping a lot, yeah. Should we care about altcoins? That question, if you want to talk about it as an investment, I would say, no. In the context of why people care about Bitcoin and why Bitcoin is important for humanity's future, no you shouldn't care about altcoins, probably not. But I'm trying to say that altcoins and their developers can come up with cool ideas and cool applications for blockchain.
Whether it'd be by mistake or through the creativity that say Ethereum allows them, they might feel more free there. They've definitely found some use cases that Bitcoin probably would've found them on its own too if that work had been just diverted back to Bitcoin. But there is some things to care about with altcoins, just to watch what they're doing. But the issue is that they never needed to make this a speculative asset in order to explore these things and this is where the whole scam comes in and even the delusion. These are developers that they create these coins and they buy their own bullshit.
They think these coins maybe could unseat Bitcoin, that these coins maybe are a better investment than Bitcoin because they have more TPS or whatever, but it's just not true. Bitcoin is going to keep trumping all of them. It's going to take whatever you make that's useful and put it on a layer. It's going to take any amount of traction you get for your store value and just eat it up over the years as halvings come and we get more and more people in here.
You literally cannot win by having two monies, you have to commit, because if you really think there's going to be appreciation of the money, thus more network effect, you have to choose the right money. If you want to make your business choosing the right money every day, then you're just a trader and you're trying to predict the future, and that's a different conversation.
Peter McCormack: And if you get tempted by any shit coin due to some technical factor, you've missed the point.
John Carvalho: Well it depends what you mean by attracted. If attracted means attracted to buy it, then yeah, you probably missed the point. But even then, investing is just a matter of time preference. If I think something is going to go up tomorrow and I have a high confidence and a low risk, I will buy that thing and sell it tomorrow. It's hard to deny an arbitrage opportunity like that or such profit opportunity.
But in the context of Bitcoin and this conversation we're having, yeah, you would be making a big mistake to buy any other coin but Bitcoin if you were looking for having this freedom money, having this security, this decentralized money, being a part of an alternative system and knowing you can rely on it still being there years into the future. I don't think you can get that with any other coin.
Peter McCormack: Yeah because it's the only one that has that kind of real focus on maximum decentralization. I've done it a few times, talked about... People have said decentralization is a spectrum when you say something like, "oh, Ethereum is quite centralized" and I actually say, "no, it's directional. Centralization is a spectrum and if something's becoming more centralized, then directionally it's headed in the wrong way. It feels like Bitcoin is the only one that directionally is always moving towards even more decentralization.
John Carvalho: That's one of the better ways that I've not heard before, that I've heard it described. Yeah, I think it's a great way to describe it. Bitcoin is striving for maximal decentralization and altcoins just simply aren't and the incentives, just by literally tweaking these designs, mostly what they end up doing is changing the direction. It's a very good way to put it.
Peter McCormack: Okay so listen, if Bitcoin is king and it's not about the technology, and it's more about the fact that it is first, the kind of trust that's already been embedded and built into it, I'm still going to have people that are going to come in, they're going to be tempted to buy shit coins, they're going to look at them, and they're going to hear different stories. If you could crystallize it down into a very simple message of why Bitcoin, just to keep it really simple for them?
John Carvalho: It comes down to understanding what a blockchain is. A blockchain is just a database that keeps track of a key and a value that's assigned to that key. The miners and the whole protocol of Bitcoin is just only for securely having a way to make updates to those key assignments, and that's the only thing a blockchain is actually for. It's just a way for everybody to have a copy of a database, be able to reflect the public key version of their private key, to show control over a number in a database. Bitcoin only really means something when you have two people that agree on this.
So it can be me and you, we each have our node, we connect and we say, "this is what I think the history is." You say, "I agree" and that's it. We don't even need miners at that point, we already agree. But if I want to have a kind of secure process for now updating this database, that's where proof of work comes in and where mining comes in, and where we're giving the reward to the miners for basically just making it really, really expensive to change this database. If we make it really expensive to change the database, it allows us to create a situation where we can have a money that does not require escrow and does not require a middleman.
There's no trust in escrow, and Bitcoin becomes the middleman. Bitcoin is the trusted escrow agent of our whole entire ledger. So you have to understand every single blockchain is this, they're all this. Every other blockchain, the only thing they're trying to do differently is they're trying to tweak what the rules are for changing the database and typically, the only way to make this better is by making it more centralized somehow, more risky somehow, because then you can make it faster, you can make it cooler, you can make it more complicated etc. So all these blockchains, they're taking this very primitive design and they're elaborating on it on the base layer.
So all these shit coins, they're all going to fail Bitcoin, because immediately they're either accepting more centralization, which means going the direction you mentioned, they're all choosing the wrong direction. So that's one reason to just not give a shit about them, they'll always fail or they are adding more attack surface.
They're just making the thing more complicated and more likely to be attacked, less reliable and the truth is, we're already using cryptographic key schemes and Bitcoin core developers and Lightning and these people are the best in the world at making really, really interesting tools with cryptographic key schemes where you can start chaining these things together and embedding them and making commitments and timestamps. They're giving us so many things to make things with, but everybody is so greedy that they're trying to just fast-forward.
They don't want to work on Bitcoin, "it's too hard to work on Bitcoin, I don't have time. I don't have the patience to wait for this to be possible on Bitcoin." So they're just jumping ahead and they're saying, "I choose risk, I choose centralization so I can sell this fucking shit to people" and that's really what's going on about coins. If there was really an innovative tech that simply could not be built on top of Bitcoin the way it is right now, but you knew it would be better if Bitcoin had it, if you were sincere, you could probably raise money from sincere Bitcoin people that think that your idea was worth having on Bitcoin, even if it required a hard fork.
They would get behind you and fund creating that technology for Bitcoin so Bitcoin could have it because Bitcoin is super valuable to a lot of people with a lot of money and resources. So unless you're just trying to arbitrage ignorance and exploit people, exploit people's interest in Bitcoin instead of exploit Bitcoin's actual features, then you're probably just making a shit coin that is actually truly shit and either delusional or a scam.
Peter McCormack: All right, that's exactly why I wanted you on John! Okay, so we covered the base chain there a little bit. But I know for you, the kind of big broad vision involves Lightning, and I haven't covered Lightning too much in this series. It's a big leap, but I've covered mainly the base chain. I did do one show with Jack Mallers to give people a picture of it, but it would be good to just cover that again. So firstly, if you could just explain to the audience now what Lightning means to you and why you think this takes Bitcoin to the next level.
John Carvalho: Sure! I said this before, I'll say it again, I think it's kind of impossible right now to overstate the importance of Lightning for Bitcoin. I've been a hype man for Lightning for about a year now at Bitrefill and just on my own as a Bitcoiner. The more I got to understand Lightning, the more I saw what people were building, I just kept getting more and more excited and projecting more and more expectations onto Lightning, and now onto myself as well to keep building some of these things for Lightning.
So the reason why I feel this way and it's unfolding this way is Bitcoin wasn't ever actually peer-to-peer in the sense that people thought when we were saying. There are peer-to-peer aspects to how Bitcoin works but not how people use it, but Bitcoin was never instant. We kind of got that wrong in the first few years, and yeah, I actually think that from working at Bitrefill I did learn that accepting zero confirmation transactions is actually something probably manageable if you're a revenue generating business. You can probably manage your risk of how much risk you want to take with accepting zero conf. There is some kind of an ability to do instant, but it's not user friendly at all.
What Lightning did is it brought everything that was missing for Bitcoin for the retail side of commerce, it brought it all to Bitcoin. We didn't have it before and now we do. We didn't have exact amount of invoicing, we didn't have any way to communicate as peers on the network, we didn't have instantaneousness, we didn't have high frequency payments for low cost and now we have all these things and we've entirely unlocked this whole other side of Bitcoin for commerce, for B2B, for consumers, for maybe micro task applications, for streaming payment applications, for streaming data applications.
This peer-to-peer network it's... I think we're going to see it used not just for transacting and not just for maybe some of the layer 3-ish things, people already know about. I think we could use this for peering for normal networking needs, and you'll probably see things like torrents being propagated across the Lighting Network and monetized and messaging and social media maybe even. There's a lot you can do when you build in monetization and you make it instantly responsive, close to instant. There'll be some limitations because I don't think Lightning would be as affordable as everybody is predicting.
There's some expense there, especially when you're routing across multiple peers. But the promise of Lightning is big, and I certainly have a lot of expectations for it and I have no problem with continuing to hype this and hyping other people's expectations for it because I do think this is like Bitcoin's first playground. You don't need consensus here. All of the Ethereum people that jumped the gun and just felt like they needed to leave Bitcoin to make cool, risky things, they can come back now, they really can.
We don't have Turing complete smart contracts and rich state faithfulness and such, but with things like RGB and Spectrum and tokens on Lightning, this is all stuff that's coming around the corner, messaging on Lightning already being functional and in more than one way, like you have to be nuts if his isn't enough for you to get creative and make cool products and think of new business ideas, then I don't know! You've got to be a little bit dense in my opinion.
Peter McCormack: That's cool for the devs, but say me as a user, how's my experience going to change with Lightning? Try and take me a few years ahead and give me a picture of what I'm going to be seeing. Will it be built into my browser? Will I have a Lightning wallet built into Chrome or in Brave? How do you see this playing out?
John Carvalho: The odds are it will play out a lot like how other things have played out that are similar in the past. In other words, it probably will start off with trading off some convenience for trust and centralization. We already see some custodial wallets and things like this. It's not something I think is really necessary or vital to the growth of Bitcoin and Lightning to have these custodial things, but there will be some cases where we need centralization as glue.
But as a user, what you're going to have is the user experience is finally getting some good attention, the product design is finally getting more attention, and you're going to be able to use an app without knowing too much about what's going on. You're just going to be able to say, "I want to be able to own decentralized dollars," and maybe you want to learn about ... Maybe there'll be like a Dai option on Lightning or something someday or some kind of stable coin that is algorithmic. But in the end you'll have Tether, you'll have Bitcoin, you'll have all these things and you'll be able to use them without thinking about it. You just go to the store and you will pay.
If say like you do with your credit cards or you can put your PayPal and your Google Pay, you'll probably start to see user experiences like this for Bitcoin, whether you'll just have your Bitcoin plugged into your Google Pay or you'll have your Google Pay plugged into your Bitcoin pay thing. You're going to start seeing Bitcoin create mirror versions of the current reality because that's how humans are. We're just going to mimic what we see and try to make a Bitcoin version, but you'll also see people getting more creative and realizing what the actual difference is here and creating even new user experiences.
A very simple example, paying to any. You don't know what the hell that QR code is, it might be a QR code for Bitcoin, Litecoin, Lightning, it could be whatever, but your phone scans it and reliably pays it. All you have to do is own Bitcoin. Situations like this, some of that might be facilitated by payment processing and exchanging and behind the scenes, and maybe, if you want a lot of convenience you end up asking for some KYC or for people who want total freedom and independence, they're just using normal Bitcoin.
Peter McCormack: So you see in both scenarios, one in this shadow world of new products that will pop up and appear that just exists within this kind of Bitcoin Lightning world, but there's also this Bitcoin Lightning world will also bleed into the traditional world where it will be an option alongside with PayPal and credit cards and you can just choose whatever you want.
John Carvalho: Sort of, yeah. The way you describe it, I'm okay with, but I do want to make a distinction in that, I feel like the industry so far, all of the money, the VC money, Silicon Valley, the big Bitcoin companies, many of them are on a path to where they're trying to exploit people's interest in Bitcoin and kind of amass custody of all their assets. This is indicative of, because I think they want all those assets to be theirs eventually. Their idea is that you keep spending money until you have none left, and then they've milked and they're done.
For Bitcoin I want more companies to be thinking, "who cares about fiat, who cares about banks. I don't want to make a new bank. I have no interest in competing with Coinbase or competing with JPMorgan or Bank of America, that's boring as fuck to me. What I want to make is a complete alternative." And I think you're going to see that more and more.
Peter McCormack: A bit like Jack has done with Cash App and Square?
John Carvalho: So I guess what I was getting at is not necessary Cash App and Square. More the direction thing again, like Strike from Jack Mallers. He's going in one direction and he's saying, "I hope you pay Lightning invoices with your cash." This is not something that tons of people are asking for right now, but it is an important part of the circular economy. That tube needs to be there and that's an on-ramp to Bitcoin. I have a lot less interest in off-ramps, at least fiat offerings. We're trying to get people in here, we're not trying to get people to just exploit the interest in Bitcoin and I think that's a mistake. We don't want all Bitcoiners to be here for trading, that's not how we're going to improve the world.
Peter McCormack: And not all just HODLing.
John Carvalho: And even just HODLing. There's nothing wrong with trading. Well, there's nothing wrong with trading as long as you're not fooling yourself and ignoring that you might actually be gambling, that part of it. But there's nothing wrong with HODLing either. There is a problem with people who think that HODLing doesn't ultimately result in spending. I don't like any kind of spend shaming, it's ridiculous.
Peter McCormack: No, no, I said "and not just HODLing". I've seen, there's some people who talk about like "it's just the store of value, that's all we need it to do" and that doesn't actually make any sense to me. I think there has to be some spending. There has to be the movement of Bitcoin wealth around.
John Carvalho: The first half of this Sergej Kotliar put it perfectly and he said, "All Bitcoin is always being HODLed. All of it, all the time. There's no paradigm where you talk about whether you're HODLing or spending. It's all being HODLed." It's the way Bitcoin works, it's a database of who's HODLing what. So the spending is just a matter of when, that's all.
Peter McCormack: Yeah, the moving from one HODLer to another.
John Carvalho: Yeah!
Peter McCormack: All right, so people have been listening to this, they've gone through 16 episodes hopefully and they've got to here. They're born in, they think they're in John, but they want to get involved. But look, the first stage you get involved is you can very easily just go and buy some Bitcoin. But how else can people get involved? Because I get it to me sometimes, like probably like once or twice a month I'll get an email and say, "I really want to get involved in Bitcoin. How do I do it Pete? What's your advice?"
John Carvalho: It's one of the hardest questions man. I spend a lot of time myself educating online on Twitter and I've even written some blog posts and I've done these podcasts. I do my part I think, anybody could always do more. But the thought of like getting an email of somebody saying, "hey John. I'm new to Bitcoin, what should I do?" Like that's not an email I really want to answer. That is such a fucking chore. There's no easy way to respond to that person without doing a responsible amount of work.
Peter McCormack: Well actually, I have a standard response now, and I think I stole this off Meltem, but I say to them just start writing. Start a Medium blog, find an area of Bitcoin you like and start writing about it. Then put that out there, get some responses, get a feel for the area of Bitcoin you want to be involved in because it is broad. There are technical side of things, there's marketing side of things, there's doing what I do, doing what you, there's a lot of different ways. That's always been my advice.
John Carvalho: And people show up for different reasons too. If they showed up for Bitcoin it's a lot easier. If they showed up for some other reason, it gets really complicated really fast. Somebody who's never experienced trading, never experienced gambling, never experienced investing, and now they come in here and they hear there's a better Bitcoin and they're experiencing all those things and more for the first time and cryptography, cryptocurrency, that is piled on like 20 different disciplines, and they're suddenly having to behave as if they're experts and if they misbehave, people immediately attack their egos.
This is not a good environment for cultivating positivity and cultivating safety because they're coming in from greed. Other people want to check their money, they're trying to take other people's money. It's just like the incentives are all over the place. So yeah, I don't know how to answer that question. I think maybe the series like your podcast series where you're covering everything in a comprehensive way, a lot of people were sharing Jameson Lopp's link page, that was a popular thing. But after a while, I stopped sharing that because you go to that link page and it's overwhelming.
You don't know what to click on. This is like, "okay, this is more than I would ever have in a college course or maybe even a whole semester of college courses. I don't even know where to start." So I think that maybe my advice would be you have to identify a few people that are worthy, are trustworthy peers, reputable, kind of like the easiest thing to do is go to hive.one maybe and just click on Bitcoin and follow the top 100 people and that's pretty great starter probably.
But there's so much to learn, don't jump in, don't act like you can fix anything, don't create anything. If you're a programmer, sure, get involved and start learning how to program and make stuff, but don't go and start your first Bitcoin company three months after you discovered Bitcoin. You're going to get it wrong for sure.
Peter McCormack: Well even on opinions, we can go back to the first time we recorded. That was after you removed your mute of me because, yeah, I did that. I threw myself in, came in with a bunch of opinions. It's a very hard world to come into, and I think it's getting harder to come into. Another thing I notice is that I don't have the patience I used to. I used to look at people like you and think, "can't you just be a little more fucking patient with me, give me some time. I've really heard this great thing about dash and I think it's got these masternodes," and you wouldn't have any patience. I'm there now, I don't have the patience. I actually just bulk mute a bunch of people going against what I felt previously, I think it's getting even harder to get involved.
John Carvalho: It is, especially when you have a longer bear market. What happens is a lot of the people with free time start disappearing. so you have less volunteers helping with Bitcoin. For me, through this bear market, I have advanced my career and gotten work and I work even more. So I spend a lot less time on Twitter, I spend a lot less time holding anybody's hand or whatever, so my involvement is even intermittent there.
When people ask, yeah, my tolerance has kind of gone now. If there's somebody that actually thinks like BSV is actually the real Bitcoin, just because they're a day-old Bitcoiner, a day-old crypto person, I'm not even going to take them seriously. I'm just going to be like "mute!" I just never want to even have this noise in my life. But if that's a real person, which I doubt most BSV accounts are, but if that's a real person, that's sad, like just totally being dismissed on your first day.
Peter McCormack: What about becoming a good guardian of Bitcoin?
John Carvalho: I think that one important thing people really need to do is get a fucking job. If you got rich off Bitcoin, good for you. But if you're trading it all the way slowly, that's not cool. Any trader, if you have less Bitcoin now than you did a year ago, stop, it's just over already. It's really hard to out trade Bitcoin in its own pace of growth on a four year timeframe, four or five years, to be consistently a great trader. Just stop! I don't think it helps. So to be a good guardian of Bitcoin I think you have to be a productive human being that puts value into Bitcoin. That can be as simple as just working on your career and making more money each year so you can have more money that you actually can save long-term.
Participating in the Bitcoin world, you have to be able to store value and that means you have to be in a financial position to save money long-term. You don't want to have to sell the bottom. You don't want have to only have enough Bitcoin to where you have maybe one month of flow in your life, and if anything goes wrong, you have to sell all your Bitcoin. You have to be a productive human being, contribute to society and so you can keep saving money and storing value. That's the simplest form and the kind of thing that anybody can do.
Many of you out there are not even doing that, just caring about being a productive human being. Beyond that is to take it to the next step, to now develop skills that allow you to specialize within this world. Whether that is becoming a better programmer, or learning more about economics or product design, or just basically doing what you can to have skills to get a Bitcoin job. You get a Bitcoin job, now you're helping Bitcoin within the industry, and that's like you've kind of gone to the next level.
Then eventually you just want to keep ... I've been here not eight years yet. This year will be eight and I've always, always upped my game for how much I feel like I'm doing for a Bitcoin, every year. There's always more you can do to just help Bitcoin. It might sound a little obsessive or something and maybe it is, but I feel totally impotent to participate in politics, to vote, to make the world a better place, to volunteer to make the world a better place, it just feels totally minuscule. But when I help Bitcoin, when I do something to even just buying a little bit of Bitcoin just feels way more powerful, like I'm doing way more for the future of everybody, just with that, because you're just supporting this whole movement just by buying more of it.
That's just a raw thing you can do that helps. But if you can start working for a Bitcoin company, helping Bitcoin grow through infrastructure etc, running a node, running a Lightning node, contributing to code, whatever, the closer you get to Bitcoin, the more you can help it. Every time I dived deeper into the rabbit hole, it's never drowned me, it's only felt warmer!
Peter McCormack: Well I find it hard to actually keep up with everything.
John Carvalho: Yeah.
Peter McCormack: Producing two shows a week and now trying to make films, trying to look at people using Bitcoin around the world, which is become a really important thing for me, I want to know how people use it in El Salvador or Venezuela, and the ones who are using it is very different from those in New York or London. It's a completely different experience. I find it almost impossible to do that whilst trying to understand the tech, keep in mind where the tech's going, understand where privacy is heading, following economics, understanding what KYC regulations are, there is so much. I feel like you almost have to pick an area and focus on that.
John Carvalho: Yeah, but I see that as why it's so awesome. The opportunities are overwhelmingly large. That's how I see it. I see no obstacles here, I only see opportunities and I really hope everybody starts to look at it that way too.
Peter McCormack: Do you think also as somebody coming into Bitcoin, it's important to have that skepticism for the government and be somebody who cares about freedom and questions the role of the state? Do you think that's an important part to become a real Bitcoiner?
John Carvalho: I mean, as a raw answer I'll just say probably not, it's not required.
Peter McCormack: But you know what I mean.
John Carvalho: I think you'll find an extremely high correlation. This is I think maybe part of not the only thing but indicative of the cultural divide between Ethereum and Bitcoin. I don't think with Ethereum people, you'll find the same quantity of them that are anti-being government slaves. These are the people that will look to the government for safety, these are the people that will trust the government, these are the people that are baked in.
Silicon Valley, they were disruptors for the internet for our generation, but then they kind of thought they could just keep being magical wizards and keep waving their wand and keep getting pats on the back, and now they've all just become like this whole ego trip and they totally missed the point on Bitcoin. They're missing the point! They're missing the boat. They've done a great job exploiting people's interest in Bitcoin and taking all of their money, but they haven't done really much to help Bitcoin or advance humanity in my opinion.
Peter McCormack: Well I referred to it in my Venezuela film where I said Bitcoin's been subverting the legacy financial system and there is that kind of... The reason I asked and said do you have to be, because I think can you really understand the key properties of Bitcoin and why they're important so much if you don't have that disdain for the government, because you want censorship resistance, you want seizure resistance. Whereas I think Ethereum for me is more of a coder's toy to make little games, little apps with, but there's no real desire to subvert the legacy financial system. If anything, it feels like just a way to enrich themselves.
John Carvalho: Yeah, I'm not a psychologist or a scientist or something, but I've been contemplating lately whether or not humans can actually learn anything without pain and if you define pain abstractly enough, that I'm not actually not sure anymore and that's kind of what I'm getting at with Ethereum people. They'll be happy to throw away their censorship resistance and embrace centralization and have all of their nodes be on one cloud and such, because they haven't felt the pain, they haven't been censored.
I don't even know why to this day, but I've been kicked off of multiple exchanges. One exchange gave me lies, the other one kicked me off I think because the first one kicked me off, and they were sharing information. To my knowledge I'm not a criminal, but I was treated like one and just that experience alone just made me double down more on Bitcoin. I'm like, "man, you know what? This is the whole fucking point. That was my money and they're oppressing me and they're not giving me a reason. I have no power in this situation." I think that until you felt pain, you're not going to properly design things safely.
Peter McCormack: Yeah or maybe see pain on others. I think you got that right.
John Carvalho: Maybe. I'm a little bit worried with seeing pain, where there's a little bit too much ego there where you think you're going to save people and you'll save them by any means. Ego is so tricky right now. I think about these things a lot, and the line between arrogance and confidence and conviction and being a fool and it's really hard. You can get philosophical about this stuff and I think that there's a lot missing in the culture for these shit coiners.
I just think there's a real cultural gap in this. I've been through a lot of shit in my life and I've dealt with authorities, I've dealt with all kinds of different problems and I know you have stories too. All of these things just make me feel more confident about this. I just feel like humans need a way to fucking escape and be free and have their own shit and be left alone. We need this, we need to create a better environment where the incentives work the way they should. I don't know.
Peter McCormack: I think a little bit of ego is okay because look, I have a bit of ego...
John Carvalho: I don't think you can get anything done without ego.
Peter McCormack: No, it drives you forward. But like you say, it depends where it's placed. But a little bit of ego that drives you forward where you're kind of proud of what you've created and you want other people to see and congratulate you, I don't think that's unhealthy.
John Carvalho: Yeah well this is what's tricky, is these people all will gaslight the fuck out of you on this level, you know? I go around and I act very confident for Bitcoin on Twitter, and people think... Like Ethereum, they think I am a fucking idiot. They think like, "wow, I can't believe how stupid you actually are." They say this to me. I'm like, I say dumb shit all the time, I know this, but I also know that I've put in like thousands more hours than many of these people on thinking about and reading about and understanding this on whole other levels.
Yes, I still feel stupid and I still say dumb shit, but I'm not going to let some random Ethereum people make me feel insecure about what I'm saying because no matter how they say it because I just know where things stand, I know how they actually work.
Peter McCormack: Fuck you Bitcoin again! All right, are there any blind spots here in our world of Bitcoin? Do you believe we've got any blind spots? Have you got any blind spots? Do you think there's any skill sets that are particularly missing? We have some of the best, if not the best developers on the world working on this. We have some of the hardest-working people I know, and also, just people who really genuinely care and they do. I've met so many good people in this world and I know there's some fuckers who screw up who have the wrong incentives, but do you believe there's any blind spots and do you believe there's skill sets we don't have enough of in this world?
John Carvalho: For the blind spots I think they're always there and they always will. The desire and the temptation to move towards centralization and trust, it's just always going to be there. It's going to always be pulling on everything all the time, so I don't think we can really get rid of that.
Peter McCormack: But that means you're going to fight it, right? You're going to fight it when it happens?
John Carvalho: Yeah, it's like a constant battle. It will never end, it's relentless. Everybody's always going to be fighting against it because everybody's always going to be trying to scam everybody out of their Bitcoin.
Peter McCormack: Yeah, people should go back and listen to our first show, it was called "Defending Bitcoin". It was based on you in the trenches defending Bitcoin during the scaling debate, so I think people should go and listen to that. The other point was what skill sets do you think... Are there particular areas you think we're missing skill sets?
John Carvalho: I think as long as you have a correct understanding of Bitcoin, we're probably okay as far as skill sets go. The education and the curing of ignorance probably is the priority, and as long as we keep that first and we do a good job with that, we won't have to compensate too much in areas of specialization, because one of the core things you have to understand about Bitcoin is all change is against consensus. Everything is you can't tell an enemy apart from somebody who's trying to benefit Bitcoin help. Every code change, every person trying to interact with it, you have to always assume that you can't trust them.
We need to train people to be scared to update their Bitcoin code to the latest version. You probably want that version to be five versions ago to feel safe. There's some kind of culture that we have to keep creating and generating where you shouldn't... You don't trust the core devs. No, the core devs, they're all Bitcoin attackers. I'm not saying they're bad people, they don't do good things with Bitcoin, but they're here to attack Bitcoin, and we can all agree to let them do so and move forward with what they want.
We have to keep framing it this way. You have to make sure the education stays this way because this is the same reason why government doesn't work now, because we don't want to allow development to turn into government and it could happen if we're not careful. The conspiracy theories that Bcash people like to put on us, they didn't come about because they were impossible. They didn't just make this shit up, that could actually happen, and they could even be right now.
The truth is it just has to not matter. It has to be that in the end we have enough people reviewing the code, enough people caring about being scared to change the code at all that we can stay protected. That said, I do think yeah, way, way, way more eyeballs on the code would be great. That's probably one thing that I think would be the most important. I think if I recall this is what core devs kind of say also, they would like more code review, just to make sure we don't let anything bad in, you know?
Peter McCormack: Yeah! All right, cool. Final question on this one before we close out. What does the future hold John?
John Carvalho: That's very, very broad!
Peter McCormack: It means you can answer how you want!
John Carvalho: Sure. The future for Bitcoin I really hope that this next pump does actually happen to some degree, just for the invigoration in the Bitcoin economy mostly, not for personal greed reasons. I can handle another year or two of Bitcoin at $8,000, it's okay. But I would like to accelerate. I'm here to make this happen faster, I want Bitcoin to happen faster and I want to be alive when Bitcoin happens. I think there is a Bitcoin happening moment and it's a whole other level than where we are now, and I want to help make it happen and I want to be alive when it happens. So the future for Bitcoin I think is disruption of maybe more and more markets each wave, each cycle.
We saw a little bit of disruption with high inflationary currency in some markets last bubble. The next one I think we'll see it happen to bigger countries than last time, and probably in the next couple of years we'll see our first major aggressor to Bitcoin. We had the India banning Bitcoin and now unbanning it, and then now maybe re-banning it, we'll see. But that was nothing. I think Bitcoin still has some hostility coming towards it. Could be some really bad laws in places that matter, outright bannings probably not.
I hope that we can progress Bitcoin in a proper way so that there's just too many people that have Bitcoin for the government to ever be interested in killing it because they're Bitcoiners too. But that's the future I hope for and the future I want to see, is just more and more people just using Bitcoin as if it was another tool in their toolbox and them all agreeing that we can't just get rid of this or ban it or hate it. It's even better than what we had! Yeah, we have to kind of poison pill the world into Bitcoin.
I don't know if we'll see the big Lightning Network moment until we see the next big pump. I think it'll keep growing, but people might be a little disappointed in the pace. They might continue to be disappointed because it's not... One, we still have to make all the cool products for it and these like kind of layer three-ish stuff so there's still a lot more work to be done and two, the commerce isn't actually here yet. People haven't made money on Bitcoin since Lightning.
We need all these people to make money to have money to spend. We need to have a lot of new entrants and we need to have people actually wanting to do retail with Bitcoin again. We jumped the gun in those first few years, 2013 or whatever and that kind of era, where we tried to get retail on board. It was way too early, there just weren't enough people that had Bitcoin yet. But yeah, that's kind of some answers I guess to the future of Bitcoin.
Peter McCormack: Awesome man. Well listen, look, it's always great to have you on. It's been a great way to end this series! I know you've got some exciting things coming up, we're going to talk about those in the future. But if people want to keep an eye on you, they want to stay in touch, or maybe even reach out to you, if they're not going to ask you how to get involved in Bitcoin, then how do people follow you man?
John Carvalho: I'm not as scary as I seem and generally I'm mostly a nice guy! I'm just a little bit rude on Twitter. You can find me on Twitter as @BitcoinErrorLog. You can find me on the same handle on Telegram if you want to chat about anything. Yes, I have a new project, the new stealth mode top-secret project that I will hopefully be able to announce to people by the time maybe the show is out, at least put the name and some initial narrative about the vision of this company.
But yeah, I'm looking for any help. If there are Lightning enthusiasts out there and people that share my kind of rebellious view of Bitcoin and its place in the world, if you think you can help me with this mission, get in touch.
Peter McCormack: Right, well listen, I wish you the best for that. You know if you need any help from me, if I can do anything, just reach out to me and appreciate you coming on again.
John Carvalho: Thanks for having me!
