WBD282 Audio Transcription

Bitcoin is Fourth Turning Money with Brandon Quittem

Interview date: Friday 27th November

Note: the following is a transcription of my interview with Brandon Quittem. 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 this interview, I talk to Brandon Quittem, a writer and advisor for Swan Bitcoin. We discuss the Fourth Turning, each 90-year cycle, individualism vs collectivism and the role that Bitcoin plays.

“Everyone is short Bitcoin, and only 1% of us realise it.”

— Brandon Quittem

Interview Transcription

Peter McCormack: Brandon, yo, how are you doing, man; are you doing all right?

Brandon Quittem: I'm doing great, Peter, thanks for having me.

Peter McCormack: Hey, dude, I've wanted to have you on the show for a while and I've been messing you around this last week, which I'm really sorry about, but I guess you're going to save me some time reading a book hopefully which, I know that sounds lazy, but I've got all these books that people keep saying to read and I struggle to fit the time in because I'm already working 80 hours a week.  I've got two here I'm trying to get through. 

I've got The Sovereign Individual, but I've also got The Fourth Turning, right, and I was like, I really, really need to read this book; I think it's going to make a lot of things make sense, in both my Bitcoin world and in the world of making political podcasts as well, I think it's going to make sense.  I've just have never got round to it and there you are, you come out with this big tweet storm and I'm like, "Dude, we need to do this".

Brandon Quittem: No doubt, yeah.  The Fourth Turning, I can't believe how relevant it is.  I'm usually quite sceptical of these types of, protect the future, see the patterns, simply because society is so incredibly complex and any time you're dealing with history and trying to look to the past to sort of predict the future, you run into selection bias.  You look for the little bits of history that you're trying to find and then build your case on that when maybe that's not a representative sample.

That being said, I spent a lot of time with this material and the more time I spend, the increasingly relevant it feels like it is.  So, I keep using this as a tool, or a lens, to view the world pretty much every day now; so, that's quite interesting.

Peter McCormack: And, it's highly relevant to Bitcoin, right?

Brandon Quittem: Extremely, right.  I mean, we'll get into the thesis here whenever you're ready but essentially, this period is when we redo the exterior world, and a big part of that is the financial system.  It's no secret that governments and banks all around the world are trying to figure out a way to redo the financial system, because we sort of hit a dead end; and, in that time, all the population demographics, there are all these trends leading to that moment, and then all it takes is a catalyst and we start to see increased volatility in society and people decide that they don't want that volatility.  They actually want stronger institutions, because they see society sort of coming undone.

So, these exterior world, the social political institutions, do serve an important purpose.  Now, we can decide if they're needed forever and most bitcoiners would say, a free market, sovereign individual-type world would be better, and I'm sympathetic to that.  But, in the short term, the people want order and so, they're going to get it however they can and usually, that means through centralisation of power and broad sweeping changes.  And so, I think that's where we are and I think Bitcoin will plug really nicely.

Peter McCormack: Do you think most bitcoiners want that, or most hardcore maximalists on Twitter bitcoiners want that; because, yeah, I know a lot of people who would consider themselves bitcoiners because they own Bitcoin and I certainly can't sell anarchist ideas to them?

Brandon Quittem: That's a good point.  There's a loud minority and, yeah, they're beating the drum and there's no doubt that bitcoiners, in a sense, it's a very human thing, we outsource our expertise to people we trust all the time; it's just a short cut; we can't think about everything.  So, if people are looked up to in the "community", yeah, some people will suspend their own thinking and just adopt other people's beliefs.  It becomes this crazy thing and we don't really know what's real.

I think your point's real.  I would guess it's a very small percentage relative to the noise.

Peter McCormack: Yeah.  I also don't know how possible it is.  So, interestingly, in doing this other series, The Chaos series, about what's going on in the US and political division, which is relevant also to other countries, but I'm using the US as a lens, I've been going through Jonathan Haidt's book, The Righteous Mind.  It actually says, I've got it here, the front cover, "Why good people are divided by politics and religion".  It's a really fascinating insight into why this happens and I've learnt a lot from it.

One of the key things that came out, there's a part of it where he's talking about, humans have always organised themselves into groups.  And, the reason they organise themselves into groups is because the individuals end up being dominated or killed off or destroyed.  So, there's like a history of humans organising together, which is why, to me, you always end up with government structures.

I always like what Churchill said, "Democracy's terrible, but everything else is a lot worse", and I stand by his comments with regard to that.  So, when people talk about anarchism I'm like, well, at some point, if you have anarchism, people are still going to organise themselves into some forms of groups anyway.  So, I'm not sold on it yet.

Brandon Quittem: Yeah, I think that's an important point and if you look throughout history, the invention of a city, or anything that we can do to essentially smash humans together in a tighter space, that's generally produced a lot more creativity and a lot more innovation.  And, the closer we are together, it offers opportunities to connect an idea with capital and someone to run the business really quickly; so, they become innovation centres.

Cities and tight groups also come at a high cost of all the bad things humans do, like violence or something like that.  But, all these institutions, or tools, they're kind of just technologies to extend the kin group, or the in group, and you can kind of agree we're all part of the same time or part of the same religion and it allows society to flourish, because we do produce more new ideas.

What I think is interesting about going forward is that, if we use The Sovereign Individual as a lens, we have this new transition to the internet.  Humanity's essentially uploading themselves to the internet into this global connected brain and through that process, maybe the physical location is less important; and, that's sort of the thesis of that book. 

The logic of violence changes where you no longer need a giant nation state with the biggest army; that's no longer the best strategy.  You want to be a smaller, more nimble, more localised form of governance.  I think that's the smart approach.  We can still leverage the innovation, because we're still smashing ideas together in many city states, however we still do want to outsource things to a security department, or someone should do the education, right; the specialisation is what creates wealth.

So, I'm kind of sympathetic to what you're saying, but I think technology will just shift how we organise, and that's what I see.

Peter McCormack: Well, it's quite interesting; maybe in 100 years' time, you're going to have kids at school, or whatever form of schooling there is, look in the history books and they'll tell of this time where we had these nation states and governments and we transitioned out of it.  That is a potential.  Or, we transition into what all the sci-fi films say, where we'll have two dystopian world groups with their badges and their armies, fighting each other; who knows?!

But, let's get into this book, because I haven't read it, but I kind of know what it's about.  I was referring my brother to it the other day, because I was trying to explain to him -- we're trying to talk about what's actually happened with this election process, pandemic, BLM, like why has 2020 been such a crazy year.  So, I just showed him the quadrant of the four turnings to show him it, and I could see a lightbulb go off in his mind.

So, before we start, obviously there are these four periods which the book breaks it down into; that's my basic understanding.  But, what's the historical basis for this; how many times have we been through the cycle?

Brandon Quittem: Yeah, good question.  So, I guess the premise of the book is that society does not advance linearly; instead, society sort of follows these predictable cycles.  You could think of it like a sine wave and this is not a new observation by these authors.  Many ancient cultures observed cycles in nature.  Biology's full of cycles in nature; the moon is our month; we go round the sun, that's a year; carbon, water cycle. 

And then, modern people have observed other types of cycles, like Ray Dalio's long-term credit cycle, The Sovereign Individual's cycle, etc, and so they're everywhere.  And, what these guys did was they essentially looked at demographics and how demographics shift and what that does to society.  I think it's important to realise that this is a broad strokes, generalised approach and so, the more time you spend with the material, you understand the framework better.  It's more like, squint really close and you can try to see the future.

But, the way I like to see it is, it's a bunch of pendulums swinging throughout society.  For example, is labour stronger or is capital stronger; how do we raise our kids; how much do we trust our institutions?  All these types of things just fluctuate over time and that creates a mood.  The author identified archetypes for each generation, which is another thing that seems to be embedded in the human psyche, and there are all these different little angles looking at society.

What that tells us is, the most important thing, I guess, from a takeaway standpoint, is that roughly every 90 years, we go through a crisis period.  That's essentially society realising that things have gotten bad, our institutions, our exterior world, our institutions are decaying and we need them.  It's usually kicked off by a war and so, to answer your question, "How many cycles have we seen?", the authors looked back about 500 years, and so it's essentially Anglo-Saxons in western Europe and then, quickly turned into the story of America; that's essentially where it goes.

So, the previous fourth turnings would be World War II --

Peter McCormack: Yeah, because I was thinking, also you had that followed by The Great Depression.

Brandon Quittem: Exactly right.  So, 1929, stock market collapse; the 1930s, which is the Great Depression; the new deal with FDR.  We were doing all kinds of new changes that society's never done before that were considered insane only five or ten years prior, like creating social security, unemployment insurance, FDIC.

Then, that leads right into World War II.  And, on the back end of World War II, as we saw where it was going, we re-architected the whole world again, created the Bretton Woods agreement; the World Bank; the IMF; NATO; all kinds of these massive exterior world institutions to try to say, okay, the clay is wet, we just went through this period, let's rebuild in a way that's better for today.  So, that was 90 years ago.

Go back one more cycle, the previous fourth turning before that would be the Civil War, 1860s, around there.  Then you go back one more, it's the American Revolution.  I think there might be one more in the book, I don't remember, but it seems to follow this pattern.  Then you can say, "Okay, why is that?" and we can go into a little detail there.

But, the most important thing for people saying, "I'm kind of sceptical here", is this is an emergent thing, this is a human property that just seems to come up through society.  And, human society is complex; we barely understand it, so I'm trying to be cautious where I make strong predictions here.  But, the general thesis is that histories create generations; generations create history. 

What I mean by that is that the time period we'll all born, let's say we're millennials; we're all born around the same time, so we're all imprinted by history; we're all impacted and we carry that, the times we were born, with us through young age.  And then, we grow up.  Again, we have this well-defined generation that now starts pushing back on history.

And, humans do predictable things, like we rebel against our parents.  For example, the baby boomers, they grew up in the 1950s and it was this sterile, Leave it to Beaver, white picket fence, strong nuclear family, also low in equality, the suburbs were built; all kinds of good things.  But, the young people realised, wow, my parents and all the old people are stuffy and lame; the music sucks; there's no interior world; and so, they grew up and they just rebelled.  They were given everything and they rebelled and created the consciousness revolution and campus riots, Vietnam protests, psychedelics.  All that kind of stuff burst out as a response to the previous period.

So, those are just some examples.  And, how we raise kids; that's one more example, and then I'll take a breather.  So, in the third turning, let's save that for a second, but in the Gen X generation, they were born of boomers who wanted to be strong individuals.  They didn't care about their children or whatever, they just wanted to worry about themselves; so, they under-parent the Gen X kids.  They become the latchkey kids, the bad boys, no supervision, etc. 

Now you see those bad boys grow up and they're the pragmatic, no bullshit, just get it done type people.  And then society realises, in America at least, wow, these Gen X kids are horrible; we can't do that to ourselves; society's decaying.  So, the pendulum swung the complete opposite way and now, all the millennials got over-parented as a result.  This is 13 placed ribbons, baby on board, everyone's a snowflake, that kind of thing.  And then, the millennials carry that story into adulthood and now, we're all special.

The point of that is, this is an emergent thing.  It comes from the ground up and these patterns shouldn't exist, but they do and it's because it's a complex system and we simply just don't understand it all the way.

Peter McCormack: But, I guess what you're talking about here, these are cycles and as you alluded to before, there are other cycles, there are financial cycles.  I was interviewing Lyn Alden recently and she was talking about boom and bust cycles, which is basically a story of greed.  And, I can't remember, is it every 10, 20 years you have a boom and a bust cycle, but then you have a mega cycle. 

And, do you know what would be kind of interesting, I wonder if those boom and bust cycles align with the four quadrants and then ultimately, the super cycle aligns with the fourth turning, because I feel like it probably does.  I can imagine it does, because you talked about it before with the Bretton Woods agreement or the Great Depression and what's happening now; money seems to be a central component of all three of those periods?

Brandon Quittem: Yeah, so a couple of points here.  First of all, Lyn's great, I'm really glad she's on Team Bitcoin now!  She's a rational voice that we need and we get kind of crazy and evangelical; she keeps us grounded in a sense, so thanks, Lyn.

Next thing is, so she brings up the business cycle; that's a five-, ten-year thing; that's the small, little curve.  And then, the long-term debt cycle, or credit cycle, which Ray Dalio popularised, that's every some 50 to 80 years, where we essentially break the money and have to start over.  We take on too much debt, interest rates go too low, we sort of trap ourselves, so we have to just redo it.

I think there is some overlap, like they're correlated.  These systems, all the variables are symbiotic, so you can't really isolate things very effectively.  But, how I would respond to that is, I like using economics as one lens to view the world; I think it's one of the most powerful lenses.  The Fourth Turning would say that the constellation of archetypes, meaning what type of people are at what age in society, creates this mood.  That mood, you can use to determine how we respond to catalysts and how we respond to technology, how we respond to economics. 

So, it's a separate way to look at the world, and they would say that economics isn't necessarily driven by this; instead, it's a human society thing and then we steer the economics into those places.  So, there are two ways to look at it that are both competing for the base perspective.  I don't have a strong opinion on either, but the more I spend with this material, the more I think that it is just a base human organisational thing and I'm not quite sure what can change it.  I think we can smooth out the volatility or increase the volatility, and I think that's what these financial cycles do; but, I think we're still going to have opposing human forces swinging over time.

I think it's a good thing, actually, because if we over-emphasise in any one category, like we're too orderly, then we end up with Nazi Germany.  If we're not orderly enough, we might have this, back to the land, hippie, utopian thing that just crumbles because we don't have enough structure.  So, I see it like a rubber band that we might stretch super far, but it's going to pull us back into this roughly consistent space, and that's good. 

I think humanity is a story of 1% compounding growth over time.  Yeah, there are obviously periods of volatility, but that's a good thing.  All we need to do is 51% forward, 49% back every year and we'll be in the stars, unless we screw ourselves up somehow.

Peter McCormack: Are we also heading for war?

Brandon Quittem: That's a good question.  So again, every 90 years, we end up in this massive crisis period and the previous three or four turnings have all been in massive war; we already mentioned those.  The question is, are we headed for total war now; and, not necessarily.  The thesis doesn't require war, but it does require some sort of catalyst that's large enough to mobilise the population to make massive change.

So, for example, the 1990s and early 2000s, the getting was good, people were making money, relatively society's fine, there's no big problem so nobody's willing to make a change.  Now, in 2008, we start the beginning of the fourth turning, which is a nice analogue to 1929 and then, all of a sudden people wake up.  You see the civil engagement skyrocket, where previously it was very low; how and change; Make America Great Again; we have to make change. 

And so, that's a period where politicians are digging their finger into the pain, making the pain sound worse in order to get re-elected, because the mood's shifted.  We went from passive, I don't care, to wow, we really need some institutions.  That's the supply of order staying really low, but the demand for order rising.  So, that transition increases, increases, and then the mood is, we want to make change, which is very clear in society.  Then you have these catalysts and since we're ready, all it takes is a spark and we go to war.

So, I'm not going to say we need war, but we do need something very large to mobilise the whole planet.  I initially thought that COVID was going to be the thing.  We rally around this big, bad thing; everyone's working together on the same problem.  But, I think that became politicised.  I think it's now dividing society.  I don't think it's going to be the force we need to actually make change; I think it's just part of the story.

So, that leads you down the path of, what could be the catalyst?  We could end up in some sort of conflict with China or Russia, maybe fighting over the next financial system.  We could see a black swan, some hacking, a terrorist thing, something like that; but I think that honestly and sadly, the most likely thing is another American Civil War.  And, I know how crazy this sounds --

Peter McCormack: Well, it doesn't, it doesn't sound crazy.  Okay, because a couple of things I was going to ask you.  Where was the Spanish Flu in relation to the last, and do we know how much of a role that played in the last turning?

Brandon Quittem: Yeah, good question.  That was 1913, I think, sometime around there, and that was firmly in the third turning.

Peter McCormack: I thought it was later than that?  I thought that was 1918/1919?

Brandon Quittem: 1917?

Peter McCormack: I thought it was 1918?  Yeah, 1918 pandemic and then, if you've got World War I, 1914 to 1918, so it came straight after World War I.

Brandon Quittem: Yeah, which is unsurprising, right?  You smash a bunch of people together and globalise and all of a sudden, a virus comes out; no surprise.  But, how I would evaluate that through this thesis is that, that was firmly in the third turning, and so that's considered the unravelling.

Another example here is, the Germans sunk the Lusitania, or whatever that boat's called, right around the same time period, and since we were in the third turning, we don't want to go to war, we don't want to make change.  And so, the US Government says, "No problem, they sunk our boat.  We're not going to war" and everybody supported that.

Then, you fast forward to 1941, the Japanese bomb Pearl Harbour; the very next day we go to total war, and the whole country's on board.  So, that's the difference between the third turning and the fourth turning.  The fourth turning, we want decisive action, winners and losers, full war, etc.

And so now, let's go to the pandemics.  The Spanish flu, again third turning, it just happened, life went on.  There was no centralising force to try to make changes.  There were little pockets of people trying things, but there wasn't a strong response from central government.  Today, we're in the fourth turning so we see a little catalyst and what happens; extreme overreaction from the state.  And many people, especially millennials, they wanted the state to step in and make massive changes for us to save us. 

That's very indicative of a fourth turning.  We overreact to a danger and we try to squash it as hard and as fast as we can.  This is also interesting --

Peter McCormack: Is that a digger; can I hear a digger?

Brandon Quittem: Yeah, it looks like my neighbour -- my windows are shut, but my neighbour's doing something.  Sorry about that.

Peter McCormack: I think we'll just have to put up with it!  Okay, sorry, carry on.

Brandon Quittem: Hopefully it's not too bad!  Yeah, so interestingly, with this pandemic, millennials had the strongest response, begging for the state to go and fix everything, and the millennial generation are collectivists; that's what our archetype is.  We're the hero; we want strong institutions; and, we're okay sacrificing liberty.

So, the millennial generation says, "State, step in, we're young, let our boomer parents just stay inside" and all that's going to do is, it's actually against the millennial's interests, right, because our jobs are the most vulnerable and we're the least likely to be in danger.  So, lockdowns don't help millennials at all.

And then, you have these older generations, the boomers and the Gen X, and they're far more independent.  So, the boomer parents are saying, "Don't tell me what to do; I'm going to do what I want", and that's actually directly opposed to their interests, right?  A lockdown's not going to hurt their job and they're the most vulnerable, and so you get that juxtaposition of them doing opposite of what they should do logically, but it's because of their identity as that generation.

Peter McCormack: So, the Civil War is kind of an interesting thing, because it's come up recently, obviously.  We're heard, following the coronavirus outbreak, the BLM situation in the US, you've essentially seen outbreaks of fighting, let's say it, whether it's Antifa or Proud Boys; it's just outbreaks of fighting in some cities.  I don't think it's on as big a scale as the media represents, but it's certainly happening and there are certainly opposing views. 

When people talk about a civil war, in my mind, I was trying to imagine it.  I don't think it has to be a civil war like the previous civil war; I don't think it has to be an armed civil war.  If anything, I think it could be a culture war and it's, in some ways, like a cold civil war.  I think that's potentially what's happening, because there is so much division in the US right now, especially between the left and the right.  It's like a win at all cost; everyone's lying; no one can agree on any version of the truth; so, it feels like it's a culture war, rather than an armed conflict?

Brandon Quittem: Yeah, I think you bring up a really good point and the first thing is that it will look nothing like the first American Civil War.  There were clear sides, clear objectives.  This will be a quagmire of confusing, small faction groups, fighting over whatever their ideological positions are, and I think that there probably will be some violence, more than there is now, but I agree; it's not going to be this all out bloody thing.  But, there will be isolated periods where it gets really bad and it's going to disrupt a lot of American society if this comes to pass.

I think it's actually going to be somewhat similar to the American Revolution, which was a period where you had the Patriots and the Loyalists.  The Patriots wanted to leave Britain's rule; the Loyalists are saying, no, let's stay with the monarchy there; and, you had neighbours fighting against each other.  It was actually a really big problem and historians estimate that roughly only, I don't know, a third of the people in those 13 colonies wanted a revolution; the other people were either neutral or didn't.

And so again, it's an example of a smaller minority, the intolerant minority, that essentially gets their way, because they're more extreme and they don't budge on their position.  So, we could see some of that, although there will be many factions, instead of two.  And to compare it to modern times, just for some data here to back up why we're talking about this, right now, there was a poll; 33% of people in the US support violence to get their way politically.  That's insane.  And, 25% of people support that their state peacefully secedes from the United States.

Those are very high numbers and I don't think it takes much more than that to make change.  At the same time, we're seeing massive inequality, a massive fight over the culture and if we don't fix the inequality, the small guy is going to rebel.  And, history is full of these examples, and so the state's going to have to respond by doing things like UBI or slash student loans, or whatever they can to quell the unrest.  And so, I think that that's coming.

Simultaneously, I think that the narrative for the culture war, whether people identify it or not on the ground, is individualism versus collectivism, and that's the culture war that I see.  It's what role does the state have; do we celebrate individuals; or, do we expect everyone to fall in line for the greater good?  And, you can see that playing out right now.  And, I think it's going to continue until the government figures out a way to slow down inequality.

Peter McCormack: Well, yeah, the inequality's a really interesting thing, because it's a pattern I've noticed travelling around the world with work.  I saw it quite distinctly when I was in Santiago in Chile, when I went out to kind of watch the riots and what was going on there, and I spoke to people on the streets.  They had a couple of key issues.

It was all triggered by a very, very small rise in the price of the Metro, but that's the transport that the poorer people from the outskirts of Santiago used to get in to come in and work.  But, that really was a signal of wider issues.  They'd had a reform to their pension system.  I don't know if you know about this, but they couldn't afford the pensions anymore, so they just did a cut-off; pensions had to be private, but there wasn't anything built in for it.

So, for example, if you were 55 and about to retire in 5 years, or 60, you had no time to build up a pension.  So, there were a couple of key issues like that, especially with the corruption; people just started fighting.  I went out onto the streets and I was speaking to people about what their issues are, what they're upset about, and it was a lot of young people. 

They were saying, "Our grandparents have lost their pension [or] my parents are not going to have a pension; I can't afford healthcare and I can't afford schooling", and all the kinds of things that they expect to be paid for by the government.  And I had this thing ringing in the back of my mind thinking, "But, if Bitcoin was here, they'll say that's socialism and you can't have socialism", etc, and I had a real conflict between what I was seeing and what my experience with certain Bitcoin people would think.  But, it was a real lens.

When I left, it was a real lens for what I've started to see elsewhere.  This growth in inequality's happened in the US as well.  I don't think we've recovered from the 2008 Financial Crisis.  Actually, my brother, who's helping me on a project at the moment, he just found something where the wealthiest 10% recovered from the 2008 Financial Crisis within 10 years, and most other people didn't. 

Sorry, I'm going on for a bit here, but there were some things that really frustrated me when I saw it.  When I did my Mnuchin investigation, we were following the funds, I think, of BlackRock and they ended up building this huge portfolio of properties from foreclosures, which were paid for with the money from the banks that had failed that had been rebuilt.  It was like, hold on, there's a massive transfer of homes and wealth from the working people to the billionaires. 

And I'm going to throw one more thing in, sorry; any listener's thinking, "Pete, shut the fuck up; you've got a guest!"  The other thing is, we've seen it during this pandemic; so, the pandemic has made the rich richer.  But, I am seeing this growth in inequality and it's evident globally.

Brandon Quittem: No, you're absolutely right, and I think you're bringing up an important point that most people aren't aware of, which is that the natural state of history is inequality.  The reason is that people are of better talents, people work harder, some people are lucky, and the resources are scarce and people compete.  So naturally, we increase our inequality, that's always the trend, until you hit these really important points.

There's a book called "The Great Leveler", Walter Scheidel.  He identified these great leveller moments, and it's based on essentially that rich people have the most to lose.  And so, plagues, revolutions, war, collapsed state, those are the only ways that we see decreased inequality, or more equality.

What doesn't work interestingly is things like a financial collapse because, just like you mentioned, the rich people recover much quicker.  A political reform doesn't work; tax reform doesn't work.  The wealthy people just evade all the state's moves at a more successful rate.  So, yeah, what we need, and this thesis actually aligns quite well, is we need one of those great levellers.

Peter McCormack: We need a plague!

Brandon Quittem: Or a plague and a financial collapse and a civil war all on top of each other, which is what fourth turnings are.  Chaos leads to more chaos and just volatility keeps going until we hit a blow-off top.  There are clear winners and losers and we sort of just get a five-year period to rebuild, and then we hope that rebuilding period lasts and we can build higher and better off of that new base.

Peter McCormack: Right.  So, if we are in that fourth turning, as such, where in it are we?  Are we in the start of it, the middle of it; how will this play out?

Brandon Quittem: Yeah, that's a good question.  I think it's important, we probably should have done this earlier, but I'll give you where we are in our current 90-year cycle, and then I'll wrap up with The Fourth Turning.

So, the previous fourth turning, 1929 to 1945, we went over these things; massive changes.  And then, you have the first turning, and each one of these four turnings are roughly 22 years; so, four quadrants make up a 90-year cycle.  You can think of it like spring, summer, winter, fall; he also gave names to them.  So, the first turning is right after a massive crisis.  Everybody's sick of fighting, we've just rebuilt the world and it's a relative peacetime.  This is Pax Americana; this is the white picket fence.  Then, that period of time lasts again 20 to 25 years, and then you have this rebellion. 

The second turning is called an "Awakening".  That's when the boomers, the young prophets, were born in peacetime.  They rebel against their parents and they create an awakening, so it's an internal revolution.  They change religion, spirituality, etc, and you can go back 90 years with these cycles.  This is the puritans, this is -- any religious uprising all came in that second turning period.

Third turning, this would be the 1980s to 2008, roughly.  That's the "Unravelling".  So, we just sort of blew up the interior world, we changed culture and a shift towards individualism; all kinds of things like that.  And then, the third turning is, the supply of order, to come back to that, is down.  Nobody wants order and the demand for order is down.  Again, we're unravelling in society.  This is when we deregulate businesses, this is when moral decay happens, crime rises, all these things.

Then, in 2008, the end of the third turning, transition to the fourth turning, we had the "Shock", and that shock creates the transition which changes the mood from third to fourth.  So, 2008, the beginning of the fourth turning.  Now, there are different stages.  Most importantly is the fulcrum, or the peak, I'm blanking on the word here, but the most important point is not here yet. 

So, we're ramping up to the peak of the fourth turning, which I assume will happen in the next three to five years, maybe seven years, and that peak period is going to be the big one.  So, I don't know what that will be, and then after that, there is a three- to five-year period where we rebuild, which will end us right around 2030.  The dates can be off by a few, but that's roughly the number I'm using.  So, we're halfway through the fourth turning, ramping up, and it's only going to get crazier until it gets better.

Peter McCormack: Okay, so I've got a couple of questions here.  So, the 2008 Financial Crisis, could that have been an opportunity to rebuild, but instead, essentially, we kicked the can down the road, didn't we, with stimulus packages; or, is that just a natural thing that happens as well, and we had to get to the point with this financial crisis, which is a lot deeper and a lot worse, negative interest rates, no bullets left in the monetary and fiscal policy guns; did we have to get to this point or could we have rebuilt from 2008?

Brandon Quittem: Yeah, good question.  So, a financial crisis, in and of itself, does not create enough change.  All it does is, it's a temporary thing and the rich get richer.  But, what it does do is, it changed the mood.  People woke up from their sleep and they say, "Oh, man, things are different now". 

It created backlash and that backlash continued to push the society towards a new normal, a new path, this is occupy Wall Street, this is hope and change; all these sorts of counterinsurgencies to the previous period come up.  This is universal healthcare, rise of democratic socialism.  These are massive changes from the 1990s and early 2000s, and that's called, the "Regeneracy"; that's the new trend; that's a countertrend to the third; and, that drags society closer and closer until there's this inevitable blow-off top which, historically it's war, because that's what actually fixes the inequality and it creates strong institutions on the back end of that.

It's almost like society outgrows our institutions.  They decay, for some reason, whether it's because humans drive these institutions and humans get corrupted over time and then they just slowly decay and then we burn them down and start over.  Interestingly, to bring Bitcoin into this one, I actually see Bitcoin as a potential new type of institution that plugs really nicely into the fourth turning, because we need strong institutions, we need something to rally around, we need a way off our financial crash, the way it's heading, and we also need all the people to buy in.  And, it needs to be this really sturdy institution that we can rally around to maybe build on, and I see Bitcoin as that; it has all those properties.

Peter McCormack: Okay, that's really interesting.  We're going to have to dig into that.  Okay, right, so in some ways then, could this pandemic have saved us having a war?

Brandon Quittem: Yeah, good question.  So, I read this book maybe six to eight months ago and when we had COVID, my original thesis for the essay, which there's a free thread and a 10,000-word essay on my website, but the original thesis was, "Bitcoin Breaks the Cycle", it's the fifth turning.  And then I realised, okay, this thing's emergent, it's not going to be that.  Then I thought, okay, COVID is going to be the catalyst that we need, the big one, and it could have been.  But instead, it fractured society.

People don't believe the virus is as bad as they're saying, governments are overreaching and all these things, and so it doesn't feel like the society's aligned enough to make sweeping changes.  However, I could be wrong.  COVID could be around for a while and it could be the central narrative that gets us to redo society, but I don't think it's going to be; I think we're going to see something bigger.

Peter McCormack: Do these fourth turnings happen in lots of different countries, and are they aligned, or are they aligned now?  So, for example, if you looked at the history of the UK, would we have our own set of 90-year periods decided by wars as such; and, has it got to the point with globalisation that this is essentially a global fourth turning?

Brandon Quittem: Really important point.  So, in the book, he does not go into international cycles as much.  Neil Howe from Hedgeye and another guy wrote the book.  I think they're just more interested in the US.  However, he has done some writing about this and I think what we're finding is that traditionally, each culture would sort of be insulated, there might be some crossover, but the less globalised you are, the more isolated you will be.

Now, post-Bretton Woods, post-World War II, the world became very globalised; we were on a dollar standard.  So, what's interesting now is you're seeing the fourth turning symptoms popping up all around the world.  You're seeing a tremendous rise of populism; you can just go down the list.  You've got Modi, you've got Duterte, you've got the Yellow Vests movement, lots of places in South America; all over the world this is happening.  Also, and I'm not a China expert by any means, but China's also demonstrating fourth turning tendencies. 

So, what this could mean is the whole world is actually on the same game and, to me, that means we're going to have even more volatility, or at least the risk of higher volatility, because everyone is ready for that spark and they're going to respond swiftly.  So, we're not going to see a drawn-out proxy war in the Middle East; that's a very third turning war.  We're non-decisive, just don't deal with it.  A fourth turning conflict is deadly, total war, there are winners and losers and we're playing for keeps.  So, that's quite concerning.

However, I think that total war, like actual hot war, is not as likely.  I do think it's going to be each state sort of fracturing into, I don't know, essentially a battle over the internet and who's controlling it, and do the individuals reign or do the collectives reign?  And, it's quite scary right now, because the young people want strong institutions, and that's a nice way of saying socialism.  They call each other comrade unironically; they don't pay attention to history books or something like that.  But, it speaks to the point that they want more equality and they want the state to do it; that's just their archetype.

So, during this period, we do need to be careful.  Every fourth turning, we flirt with totalitarianism.  It happened in the US in the 1930s as well; the young people were going down that path and we're going down it right now.  And so, I think Bitcoin is actually a counterforce to that and I would turn to the idea that we could either manage a complex society, or coordinate society, through free markets, or through force.  Obviously, Bitcoin represents free markets and a strong state represents force; that's just how it plays out.  So, we need Bitcoin now more than ever.

Peter McCormack: So, the populism thing's quite interesting because this morning, I was reading an article on the Financial Times; let me get it up, because I think this is important.  The reason I was looking at it, I don't know if you've followed any of this; I call it a Trump series?  It's not really a Trump series, it's more about political division in the US.  But, the original working title was "The Accidental Dictator", where the accident was Trump becoming president, because he wasn't intending to become president, and the fact that he therefore turns into a dictator and he has dictatorial tendencies.

Now, it's a very tricky subject to deal with, because politics is so attached to identity.  If you accuse someone like Trump of being a potential dictator, people are insulted by that and they call you a fucking idiot and, you don't know this, you don't understand that.  But, I do firmly believe, in a weaker state, Trump could potentially be like an Orban or an Erdogan and just assume the power of the state; I believe that's a potential.

But, I started reading this article, and it's The Rise of the Populist Authoritarians, and it's really about authoritarianism is usually born in populism, and this is the interesting thing about Trump.  He certainly is a populist.  It was really Steve Bannon's strategy and everything he's doing appears to be playing into those books.  I wish I had the thing; I read a thing recently about the number of people with republican values who aren't scared of authoritarianism, or believe authoritarianism is -- you talked about violence, but this is about authoritarianism as a method to achieve your goals.

I think, and it's very hard to articulate this, but we're in a situation now with a highly contested election where, from my lens, it feels like Trump has lost the election, he just didn't get enough votes, and it feels like they are using every possible means within a robust US Constitution and legal structure to try and hold onto power.  When I talk about the potential of him to be a dictator, what I mean by that is I think there is a potential for him to try and hold on to power despite the election result, and I think it's a real risk.

But, when I talk to anyone who's voted Republic, voted Trump, absolutely dismisses this or even seems to support what Trump's doing and believes what he's doing is right and correct.  But, they believe it in the lens that the election's been stolen, rather than seeing it in the lens that he's trying to claim victories for something he hasn't won.  I haven't articulated that very well, but do you see where I'm going?

Brandon Quittem: Yeah, definitely.  There's no doubt there's a rise of populism, and that is captured during fourth turnings, because it's a hop-on by the left and the right.  So, Trump is the authoritarian figure for the "right", even though he's kind of an enigma in politics, but his team wants law and order and they don't like this unrest and they're willing to give up power during this crazy time; and, they think the big, strong man should be the right guy to do it.

The left's on the same boat.  They want a nice, soft figure who talks about feelings, but they're getting at the same thing.  They want the state to step in and get their way.  Yeah, two sides of the same coin and sadly, humans are pretty bad at having rational discourse, and we're quite emotional about our positions.  So, it gets heated and people can't see eye to eye, nobody's trying to learn each other's perspective and so, yeah, it's going to get worse from that angle. 

The internet makes it even worse.  All of our platforms are incentivised to create all this chaos on their platforms, because it drives clicks, so the incentives are there to even fan the flame of something that was already going to happen.  And, I'm not sure how it plays out, but I think the young people need to read some history books and figure out what actually drives society.  A large society cannot be coordinated centrally; it just can't happen.  They're complex systems and humans are not capable of managing them and I don't think we're going to be managing them any time soon, if ever.

So, I think young people need to figure that out, and Matt really has some nice books on this topic, but he has this quote that always stuck out to me which is that, "Innovation is the child of freedom and the parent of prosperity".  In other words, freedom leads to innovation which leads to prosperity, and that's just sort of the story of humans.  So, I understand the desire to try to have the state fix things as if they could, however that just doesn't work and so we have to find solutions that are sustainable to our society, and I believe that's more of a free market model.  So, there's Bitcoin again, sneaking in!

Peter McCormack: So, Bitcoin again.  But, it's a bit more than just Bitcoin, right?   It is interesting times.  Can't go out because of lockdown at the moment, so I have to exercise, I mean we're allowed to go out and do one exercise, but it's fricking cold out there, so I've got virtual FX.  Have you got Oculus Quest?

Brandon Quittem: I don't, no.

Peter McCormack: Okay, so it's like a gym workout.  You go, and it's like boxing, and there are eight of you in there and you can see their virtual hands and heads moving around.  You're all in a room together, boxing and stuff.  It's really cool.  I mean, I can't go to the gym at the moment, but it's like a really cool bit of exercise, but I was just thinking the next generation on from this VR stuff, where me and all my friends can get in a room together and hang out and have a drink.

I guess where I'm going with this is that Bitcoin, obviously, is useful, but if you add into that mix where you said before, you know, geography is less important; we're more likely to group around virtual groups, I think it's something Balaji has talked about actually with regard to this.  I can see where you're going with this, that this next rebuild could be around Bitcoin.  So, do you think Bitcoin is central to this?

Brandon Quittem: I think it is, yeah, and the reason why is because I think the money is the base protocol of coordination for society.  It's just among the best things we have to drive society.  Did you have a point there you wanted to dive into?

Peter McCormack: Well, all I'm saying is, what I was getting at is we have multiple technologies which are changing society quite rapidly.  Bitcoin obviously could do a lot; I think virtual reality can do a lot; we're moving into 5G territory now and talks of 6G, I saw the first report on 6G recently.  We're starting to have the technologies to do a real massive shift in the way we live, a bit like Ready Player One.  Ready Player One does feel like something perhaps my children's children, they will be the kinds of worlds they are just living in?

Brandon Quittem: Yeah, I 100% agree.  It just seems like humanity's onboarding to the internet and we're becoming a network species and that's just the way it's going to go; I completely agree.  It does bring some interesting points like, geography's less important, so what does that do to society?  Are cities as important if we can bump into each other online; maybe, maybe not?  What does that do for war and battle and nation states?  Is your allegiance to your internet tribe, or is your allegiance to your geographical borders?  All these questions are going to have to be re-evaluated.

Again, it points to The Sovereign Individual thesis where the logic of violence shifts away from the large nation state and towards a smaller, nimble city state-type model.  In that model, it's founded on defensive technology, like encryption, so we can have encrypted money and no one can stop it; we can have hi-tech defence for a small city state.  So, yeah, of course the big city state could still blow up the little state, however you're not going to get any money out of it, so the incentive to go attack is pointless.  The ROI on violence is going down.

So theoretically, we can have all these microstates experimenting with government, which I think is an important thing to do.  It's been pretty stagnant; I think we have a lot more things we can play with here and iterate on.  So, let's let a thousand flowers bloom, let's let them compete and I think that will create a more prosperous world with less violence, because there is no incentive to do so.

If there's less violence and we base our world on Bitcoin, now we have clear, economic signals.  We have this foundational thing that's peer and then, great; what that's going to do is it's going to coordinate society better on producing important things and that means it's going to reward people for helping humanity by inventing things and satisfying needs and wants.

So, I just think it's going to be a slow, downhill flow of innovation and wealth creation from Bitcoin.  I have no thoughts or delusions that this is going to be a, snap your fingers and the world's going to be better.  I see the real benefits of Bitcoin, the big ones we talk about, about changing society; I think those are going to take generations.

Now, in the short term, I think Bitcoin will become a large part of the financial market, but society is going to change slowly, so it's kind of hard to wrestle with those things.  Bitcoiners are going to be wrong about the future for a long time and then, we're probably going to be proven right; that's what I would have to guess.  And so, that's an interesting thing; society moves slow and we're just not very good at estimating how time goes; so, we're going to be wrong until we're right.

Peter McCormack: Well, the timing's really interesting as well.  It's funny.  When you look at what Satoshi created, it's amazing how perfect it is in so many different ways in terms of the hard cap, in terms of the halvings, how important they are for it; but, you also look at the timing of its creation, and perhaps that was a natural -- was that created during the third turning?

Brandon Quittem: Interestingly, Bitcoin was created at the dawn of the fourth turning, January 2009, and they say around 2008/2009, the global Financial Crisis was the transition point.  So, Bitcoin is a fourth turning money.  It was a symmetric response to the abuses of central banks, if we believe Satoshi's scripture in that sense.  And so, it's born, it grew up during this chaos period, it gets battle-hardened as it grows up; now it's 12 years old, it's about to be a teenager and start to go out in the world.

Now is Bitcoin's true test and I think it's important to speak of timing, because if Bitcoin was born in the third turning, let's say in the 1990s, there's absolutely no need for it in the world.  It wouldn't have developed this hard core base of people that shepherded it through the early days; it wouldn't attract all this capital and talent because it wasn't needed; and so, the timing's perfect.

Now, it's going to go through its coming of age over this next period where the stakes are real now.  It's starting to butt up into the state, which is going to cause all kinds of interesting things, but I think it's well-suited.  You can compare this against fiat money, which is peace-time money.  We invented our current monetary system out of Bretton Woods and then, deregulated it further off of gold in 1971.  So, these are peace-time monies; they cannot handle volatility; so, they're sheltered.  They're like a little Pomeranian and Bitcoin is the Dire Wolf out in the woods.

So, in this period of high volatility, we have a choice to make.  Do we want to double down on centralised money, MMT or whatever we're going to call this next thing, which is again extremely, extremely fragile; or, we can go with this hardened sewer rat Bitcoin thing that eats volatility, it consumes volatility.  All the world's going crazy and the volatility just goes into Bitcoin's price, but nothing else.  The system is not shocked by the volatility.  So, to me, the trade's very obvious.  We want a fourth turning money here that accepts volatility and benefits form it versus a money that fails with volatility.

Peter McCormack: But, some of the people who worked on the precursor to Bitcoin and some of the other ideas, that work will have started in the third turning, which is kind of interesting.  I guess maybe, it's because those people could see what was coming and knew we needed something like this?  It's really interesting as well.  I did a really fascinating interview yesterday with Nik Bhatia; do you know Nik?

Brandon Quittem: Yeah, great dude.

Peter McCormack: It really shifted again a lot of my thinking with Bitcoin again.  I'm a convinced bitcoiner, but we were talking about how, with regards to Bitcoin, it has a lot of secondary impacts.  So, for example, you become better savers, you consider money better, you consider what you're producing.  It's not that you become more productive, but the production that you do changes. 

It changes a lot about you as an individual and it just feels like the timing, with everything you're talking about, the timing of Bitcoin's incredible; because, if it had been ten years early, like you said, too early.  If it had been ten years later, it might have missed the whole rebuilding process.  It's almost like it feels it was natural, but the other side of me thinks, are we just lucky to have this?

Brandon Quittem: No, those are great points and I think first to address the precursor technologies; that's absolutely right.  There were 30 to 50 years, depending on how you define it, of prerequisite technologies that were invented.  But, it's also interesting, they had all the technologies ready to go for at least a decade, maybe two decades before Bitcoin; I think it's about 10 to 15 years.  All the technologies were there, but nobody put the pieces together and that's, again if we use this thesis, the third turning, there's no motivation to make change.  People saw these little problems and whatever, but then all of a sudden fourth turning comes and boom, here this thing is.

I don't think that's a perfect analogy, because Satoshi was obviously working on this in 2005 to 2007, I'm sure, but it is kind of an interesting point.  I think, what comes to my mind is this strange principle in nature which is symmetry, which is that sometimes, I don't know why this is true, but let's say when you create a bad technology or a technology for chaos, the Atom Bomb, the same year we synthesised LSD.  Those are sort of polar opposite things that occur in nature.

At the same time we had the 2008 Financial Crisis, the solution comes out, right?  And so, I know this sounds weird, but society is full of these examples.  It's almost as if the collective species, networked brain-type thing, or a complex system, it produces the things it needs at the right time.

If you look through famous inventions throughout history, the steam engine or whatever famous invention you want to look at, interestingly many people around the world were on the edge of discovering it all at the same time, but one person gets credit and that's who we remember.  But, if that person died, the other person would have come up with it six months later, practically at the exact same time.  500 years, no printing press, then five people would have come up with it within a six-month period; that's really strange. 

I think it speaks to this complex system that sort of knows what to do and we're all connected, so through information spread, we shuffle resources and out pops the thing we need; it's quite crazy.

Peter McCormack: So, are you watching everything that's happening with society and technology and politics and just going, "Yeah, that makes sense"; fourth turning, "Yeah, that makes sense.  Rebuild".  Is everything just like a jigsaw that you're putting the final pieces in now?

Brandon Quittem: So, the short answer's yes.  It made a lot of things in society make more sense.  I no longer feel -- I was sort of distancing myself from mainstream politics anyway, but this gave me an even more clear lens to see the games that are being played.  In some ways it's like, is ignorance bliss?  In some ways, now I'm more scared for my millennial brethren, because they do control popular culture and they are trending towards a totalitarian state.

So, I don't see eye to eye with the median peer in my generation, and so that's kind of an alienating thing, kind of a scary thing.  But in terms of, do I see all the pieces together?  There are still a lot of down cards left in this fourth turning.  I don't know what the peak crisis is going to be; I don't know how we're going to rebuild afterwards; so, I'm just on the edge of my seat trying to follow these forces that I see, but there are a lot of unknowns left.

Peter McCormack: Okay, let me ask you something.  From what you've read of the previous cycles, were there any other life boats because for us, Bitcoin is a life boat?  I guess you're seeing what's coming; it's an inevitability for you and you've got Bitcoin as a life boat for when the rebuild happens.  You're ready.  Have there been other life boats like this?

Brandon Quittem: Yeah, good question.  I don't have a great answer to that, but here's how I'd explain it.  In 1944, we created Bretton Woods, so that's like, we know where World War II's going and we're ready to make this ridiculous change, and we more or less built it from the ground up.  I think, any time you try to build a complex system from the ground up, it's going to have a whole bunch of unintended consequences.  So, that Bretton Woods system, although it did "solve" the problem at the time, it might have been the right solution at the time; but, trying to design a complex system from scratch inevitably fails, and that's what we're sort of dealing with right now.

How I see Bitcoin and how I think this journey could be different is that Bitcoin is an emergent system.  It was not designed from day 1 to be what it is now; it sort of evolved based on humans bumping into it and improving it.  So, I see it as a slower, nicer, smoother transition.  I think that's the most optimistic approach we can look at in this fourth turning, in that Bitcoin is the life raft; it takes pressure out of the system and as people realise it and it gets bad enough, they're going to jump into this new opportunity that we've never had before.  So, I could see theoretically, this is the first time we don't have a total war, because people can get off the boat, or get on the new boat.

This happens at an individual level.  If my life savings goes down, if my parents' pension gets screwed, or if young people have no hope, that's pretty bad for society; but, they can slowly adapt to Bitcoin to save purchasing power.  It happens at the corporation level; most corporations are not going to be able to produce a return on capital that exceeds the devaluation of currency over the coming decade, so they can jump in and protect their treasury.

You can see nation states realising, "Oh, man, do I want to go down with the ship or do I want to shoot the moon over here on Bitcoin?" and we're already starting to see this with Iran and Venezuela.  So, it does offer this pressure release valve, and that will lead to less desperation at all those different levels and with less desperation, maybe there'll be less violence.  So, that's my optimistic take of Bitcoin changing the cycle slightly.

Peter McCormack: It's quite interesting because therefore, the comments recently that came out, was it the IMF that talked about the Great Reset?

Brandon Quittem: Yeah, I think it was, yeah.  Terrifying.

Peter McCormack: Yeah, terrifying, but in some ways a recognition that a rebuilding is going to be required because the global economy is kind of screwed.  So, that's kind of interesting.  I've looked a little bit into the CBDCs.  On a practical level, they are very practical for governments.  For an individual level, for the likes of ourselves, it's dystopian bullshit; it's complete control over our money.  I mean, you never essentially hold any money ever again; you just only ever have an IOU.  Again, kind of scary.

So, what would be kind of interesting is that we might have a play here between the rebuild, which is what the state wants to do, and the rebuild, what the people want.  Bitcoin is really a people's rebuild of the money; CBDCs is a state level rebuild of the money.  I was talking to Nik about this yesterday and as more people realise that …

I mean, if you price CBDCs against Bitcoin, over time you would expect that Bitcoin will always outperform the CBDCs, because there will be no inflation.  Therefore, people will naturally start to think, well hold on, I should be holding my money in Bitcoin.  Therefore, CBDCs will either die or become worthless, or the government will need to ban Bitcoin; so, we might have this clash between the two.  Could that be the war, the war of the money?

Brandon Quittem: Very interesting point and yeah, I think you bring up a good point.  First of all, a Bretton Woods 2.0 or a central bank digital currency, new financial system, whatever this thing's going to be, it's going to solve some immediate problems.  It's going to be welcomed by the young people and then we're going to realise some time later that all we're doing is supercharging the state, supercharging central planning of an economy, and it has unintended consequences that are bad.

So, the point you bring up about Bitcoin versus CBDCs I think is fascinating, and I think that is sort of the same thing as individualism versus collectivism; it fits the theme of this next crisis.  So, I think Bitcoin is the long-term victor for sure, but I do think we're going to experiment with CBDCs and Bretton Woods.

There are still a lot of unknowns though.  I don't think the state can actually build a system that they want to create, and so they're going to have to cooperate with someone.  Is Facebook going to build it; is Google going to build it; is our government going to nationalise the big platforms like that?  I think that's entirely possible.

What about the fact that the world's kind of going isolationist?  China doesn't want to be the reserve currency; they want their own central bank digital currency so they can trade with their partners without using dollars.  It frees them to kind of do their own thing.  And so, I see a more multipolar world.  I'm not sure if we're going to pull off a global Bretton Woods 2.0.  I think it's going to be, each state has their central bank digital currency; smaller states will use the regional standard; and, that's going to happen; and then you juxtapose it next to Bitcoin.

Bitcoin's the freedom money.  I think they're going to try to gentrify Bitcoin, the state will, but I think that ultimately, they're not going to be able to stop it.  The risk of stopping it is going to be too high.  Now, if they attacked it immediately today, that's probably their best chance, but every day that goes by, more powerful people adopt it, more individuals are on board, more politicians own it; and, so you're sort of entrenching Bitcoin and making it harder and harder to stop.

I think that's something to watch.  Yeah, we want a cypherpunk Bitcoin, of course, that needs to be preserved.  We need people to be able to run Bitcoin and validate their own transactions, all that.  But, we also need to have Bitcoin become too big to fail and we need that threat of retaliation.  So, I'm very supportive of powerful people, even unsavoury powerful people, adopting Bitcoin, because they'll go to battle when it's needed and I don't even think we're going to see a war.

I think what America is starting to realise is that Bitcoin is deeply American, from Founding Fathers' principles.  So, there's a chance that Bitcoin sort of gets this pass.  It's sort of underestimated and they're like, "Okay, fine, you can have your little corner", and then it's going to be too late.  And at that point, I'm not sure how that transition will go.  The state will not probably like it and so, we either get a free pass like gold; Bitcoin gets sanitised; or, they do try to coordinate an attack.

Peter McCormack: Yeah, so when you talk about freedom versus force, I guess I see CBDCs as force and Bitcoin as freedom.  I mean, you say "freedom money"; it's also kind of interesting because we've just had the Senator of Wyoming, why have I forgotten her name all of a sudden?  Hold on, this is because I'm terrible with names. 

Cynthia Lummis, yeah.  I mean, she's brilliant, she's got good people around her, she understands Bitcoin, she's anti-inflation; but, that is a senator who is a bitcoiner.  Naturally, from Wyoming, which is great, but it's a bit like what Mr Hodl always says, "Everything is going to plan".  But, I think this moat is building up around Bitcoin now and I'm less and less concerned.

I can't quite remember who I spoke to recently; somebody said to me recently, "I think we're past the point of it being banned".  Too much money's in it, we're talking billions and billions of dollars; too many people have got money in.  You've got your Squares; you've got your MicroStrategy; you've got companies like Kraken and Coinbase all built up.  If the US was to ban it, that business will just go to other countries; it won't kill Bitcoin.  I think they'll have a massive legal issue with banning it?

Brandon Quittem: Yeah, I agree.  I think that the MicroStrategy trend, we'll just call it that, he seems like the catalyst and definitely 2020 Bitcoin Rookie of the Year, Michael Saylor!  I think that trend's going to continue and what are you going to do there?  If half the corporations have some Bitcoin in their treasury and you try to ban it, you're going to crash the stock market.  People are not going to stand for that in America and there are going to be lobbyists now on board.  It's already in politics.

It's probably still a small point; it's not a national conversation by any means; but, I think it will be and I think over the next decade, this will be the coming-of-age tale.  And so, I'm actually not too worried.  Whoever said that, "I think we're past the point of banning it", I think that's actually true in America at least.  I think some states will fight back.  I don't know what China's relationship with Bitcoin will be.

Also, your point about innovation, the US knows how much we benefitted from allowing innovation to occur through the internet, the dotcom bubble.  And, we've heard politicians talk about this, "We don't want to kick out the innovation", and they're right.  Right now, America has a pretty sizeable lead of innovation, although you could say it's declining, but certainly in Bitcoin, it's among the top and so, that's going to produce tremendous value for our country.  Why would you want to kick that out? 

Now, you're going into a world where all these smaller nations are selling passports, so you can move your whole family to Portugal or the Bahamas for $200,000.  So, the threat to leave is very high and it's very easy to get Bitcoin out of the country.  So, from a government standpoint, if they do their pros and cons here, like a risk analysis, there is a lot more downside for them trying to ban Bitcoin than them trying to allow it to flourish.

Now, they're going to try to sanitise it and the plebs will use app tokens, Fed tokens on their app, and they'll only be able to spend them at the right place, or whatever.  But, the class of people who stores away some Bitcoin, they're going to have more optionality.  They're going to be a little bit more anti-fragile, and I think that's all we need.  I don't want a war with the state; I want Bitcoin to just show its teeth and say, "Listen, you can try.  We're going to fight back and it's very costly for you to attempt this and if you lose, it's total failure.  Or, you can extend a hand and let Bitcoin innovation flourish here and, great; that will be better for America if that happens".  I can see some sort of nationalised mining, or subsidised energy, or something like that. 

I forgot who said this, I don't know, one of the regulatory bodies in the US, the guy essentially said, "China owns the hash power and that's kind of bad for America.  There's this new thing coming; we don't want China to get an advantage".  You can interpret that as he wants to ban Bitcoin because China owns it; or, you could interpret that as, "We need to get some hash power in America so that China doesn't own it".  So, I think the competitive American spirit might prevail here.  Again, maybe I'm being optimistic, but I think people still have that spirit in them, even though the politics of the day is, call each other comrades.

Peter McCormack: Another interesting thing that came out of my conversation with Nik yesterday was, the only thing that stops me putting more money into Bitcoin is the volatility.  So, what I tend to put in is the money I know I don't need over the next, you know, whatever period, I can't remember what I said; say it was six months.  I can't put that in because running my business, I have operational costs and I have spikes in costs and dips in costs, so I need to keep at least six or seven months on the books; everything else can go into Bitcoin.

Obviously, I like the volatility when it goes upwards, it's good for me; but generally speaking, if it became more stable, there's actually a reason to put more of my money into Bitcoin I just can't.  But, that gravitational effect will likely increase with time and more people coming in.  That presents a real problem for the government, because it starts to destroy the real value of their money.  And, it then made me realise a couple of other things.

One of the other things was, I talked about wanting to buy gold.  I actually wanted gold.  I'm not one of these people who is like, "Bitcoin's the best thing ever.  That's just shiny rocks; they're bullshit".  But actually, I realised why Bitcoin is so superior to gold, in the process of trying to buy gold.  Firstly, physically getting it was difficult, but the bigger problem was going to be selling it.  I had a real issue if I wanted to sell it, because I don't have instant liquidity.  I can go online now and send some Bitcoin to an exchange and I have instant liquidity.

And then, the next point that became really important is I realised how important the Lightning Network was.  I was recently a bit dismissive thinking, "I don't think I'm going to use it; it's not that important".  Now I realise it is, we just don't need it maybe for another five to ten years; so, that can become battle-hardened.  But, at the point whereby you've got your money in Bitcoin and you don't want to take it out, but you want to spend it for whatever purpose, you need both the base chain and the Lightning Network.  All these things started to click into place.

Brandon Quittem: I'm with you on that one.  And, I want to underline one point you mention there, which is the reflexive nature of Bitcoin, meaning the larger Bitcoin becomes, the more demand there is for it.  Right now, major nations, they couldn't really allocate to Bitcoin; they'd move the price too much.  But, we're going to have this cascade where the little guy gets to front-run the big guy for the first time maybe ever in history, then you're going to have increasingly larger organisations have the incentive to adopt it, which pushes the price up, which increases more FOMO. 

Then eventually, like you're saying, it's going to be in the best interest of smaller nations to allocate some part of their balance sheet to Bitcoin.  When that happens, again we've talked about this endlessly in Bitcoin land, but there will be some sort of game they'll be playing out where you don't want to be last. 

Speaking to gold, yeah, I mean Bitcoin's got its target set on gold, and I think that's all but inevitable.  It's 100X improvement; the generational trends support this; millennials don't want gold, it's very clear; it's cumbersome.  And then, you have this Bitcoin thing, all the young people get it immediately.  For example, I onboarded -- I've probably onboarded hundreds of people in my personal life to Bitcoin, but my father-in-law, I helped him get set up with Swan and he's stacking some Bitcoin, and there were lots of conversations and all these concerns on how to do it, and you're sort of handholding a boomer through this process.

Now, I get my nephew, I say, "Hey, buddy, it's your birthday, I bought you some Bitcoin.  Download a wallet and send me your address".  Within five minutes, he downloads the address, screenshots me a QR code, and he owns Bitcoin and he gets it.  Next time I see him, he's telling me about it, how it went up.  And so, the young people get it; gold's days are numbered.  It still could perform well in the short term, I assume that it will, but the long-term history's already written.

Regarding the Lightning Network, I would 100% agree.  I don't see Bitcoin competing at the payments layer anytime soon, so why do I care.  I'm really glad people work on it and the grand vision, which I heard from Ryan Gentry recently on Marty's show, that was a really mind-blowing episode, where he extrapolates on what it could be and that got me super interested.

I guess, what's interesting to me about Lightning Network is, we had the base protocol; that did the important thing.  We separate money from state; that's the hard problem.  Now, anything after that is bonus and it's in our best interest to try to create layers that reference the security model of Bitcoin, censorship resistance and trustlessness and all that. 

So, Lightning Network is our best thing so far that references Bitcoin's assumptions.  That's hugely important and if Bitcoin does become this large-value transfer, container ship, base layer, however you want to describe that, we're going to need a more sane approach; and, Lightning Network will get smoothed out.  It's very complicated, but that will be abstracted away. 

So, I'm with you, very recently became a Lightning bull, not because I want to use it, but because it's growing, it's evolving, it's becoming better, a lot of smart people are flooding in.  There are actually a ton of businesses and projects working on it, which I didn't even know.

And, the final point I forgot to mention regarding the reflexivity of the price is, Brady, from Citizen Bitcoin and Swan, came up with a thread recently called "HODL FOMO" and I thought this was interesting framing.  In 2017, people are trying to buy Bitcoin so they can make money because it's going up, it's just a trade.  Now, the store of value narrative is so clearly defined, and also it's clearly needed. 

2020, people are sort of checking around, reassessing themselves, who are they hanging out with, how do they do their finances; and, all of a sudden Bitcoin looks really good here and the narrative is strong, and the supply being fixed relative to the money printer, that's a nice juxtaposition.  And so, I think what's happening is the world's waking up to the fact that there are 21 million of these things and they'd better bury some in their back yard before their gone.

So, he calls it HODL FOMO and you can see it on the charts.  People aren't leaving Bitcoin on Coinbase, large buyers are taking it off exchanges at unprecedented rate and what's going to happen?  We're going to have no supply, and then what; the biggest supply-side liquidity crunch in human history?  So, to me, 2020 changed everything. 

In 2019, I would have said, $100,000, $150,000 Bitcoin would be the peak of this next cycle, because I didn't think it was as needed.  Now, in 2020, I think all bets are off.  I am sympathetic to the, this might be the big one; or, we won't see such volatile downside after this, because it does serve a need, it's been de-risked, the big boys are buying it for the long term.  They're not buying it to flip it for a Lambo.  These guys are buying long term because they understand it.

So, I think humanity might have a little brush up with what scarcity means, and that's going to be quite scary.  I think the bear markets are easy; bull markets are terrifying.

Peter McCormack: Well, does that become an issue then because, I mean, I'm with you on that.  Somebody said to me basically, with Bitcoin you have a score and your score is the percentage of Bitcoin you own.  Just figure out the percentage of the 21 million you own and that is your score and you always want to increase your score.  I've given away so much Bitcoin and wasted so much, it's ridiculous; it's kind of depressing.

But aside from that, do we potentially have an issue at some point where Bitcoin's too hard to get; people aren't willing to give it up?  Does that, in itself, present any kind of issue at some point?  I guess, if we still have alternative currencies to use, that's fine, because you could sell it to use it, right?  But, if we ever got to a point whereby -- I'm just trying to figure this out in my head.  You've probably been through this thought exercise.

If we move to a Bitcoin base society, there will always be some, because you have to spend it because you'll have no alternative currency?

Brandon Quittem: Yeah, the way I think about this, and strangely that point's come up several times recently, but the way I see it is that it's not like no one's going to get rid of their Bitcoin.  When I say "supply liquidity shock", I just mean that very few people are willing to sell at low prices.  So, there are always going to be sellers, but they're going to be selling at really high prices, because we have this future expected value going up.

So, I'm not too worried about it, but what it really says is, you're going to buy at the price you deserve and smart people are burying it in their back yard now.  Those days are limited, so fine, you can wait.  Everyone's going to have to interface with Bitcoin.  You can do that today, learn about it now, when you're sort of ahead of the curve and great, you have a chance to benefit.  Or, you can wait five years and you'll own Bitcoin, but you'll own it at a much higher price and you won't benefit from the price discovery as much.

Then, the next point, if we hyper-bitcoinise, or it just becomes a larger part of the economy, people are still going to pay people to do things.  Eventually, Bitcoin will be less stable and it won't make sense to hold all your money there, because you'll want to see a higher return.  Maybe Bitcoin grows at 2-3% a year, more or less mirroring GDP, and then you want to take some of that 2-3% yield and put it into a little bit riskier asset, like maybe you invest in a company again.  So, I don't see any structural issues with this.

I think the real issue will be the people who get in early will have incredible wealth, and some people will feel that that's unfair.  There are always winners and losers.  Bitcoin is as fair as it possible could be; it just has to do with, did you spend time understanding this thing.  And, to be fair, I don't mean it like a grab yourself up by the bootstraps; certain people are predisposed to understanding Bitcoin.

I feel a responsibility, working for a company who recruits bitcoiners to Swan, is to say things like, which type of people do we want to buy Bitcoin now?  I feel a responsibility to tell my friends and family they should own some of this; I feel very little responsibility to convince some dude I met in High School, you know.  And so, there's kind of that weird morality there where, if we are right, we have a lot of influence in changing the people's lives around us. 

So, I think that's actually quite motivating; get on the Ark with your friends.  But also, that responsibility's really weird because there are going to be people who don't benefit from this and I'm not sure what that looks like.

Peter McCormack: Well, I think that puts people in a position of kind of disregarding Bitcoin a little bit.  I think there are some people who dismiss it because it's been around them, but they've never really gone in.  I think some of the Bitcoin journalists, not the Bitcoin "in Bitcoin" journalists, some of the journalists who cover Bitcoin seem to get saltier as Bitcoin increases in value and tend to enjoy writing the articles when the price drops.  I think there's that kind of salty feeling of always being around this; shit, it was too much at $200 so I didn't; oh, shit, it was too much at $1,200; oh, shit, it's too much now at $20,000; and, it just keeps going up and up and up and they keep missing out.

I think other people dismiss it because they just can't get their head around the idea.  When I put stuff on Facebook, I put it all the time.  I am putting things I'm finding on Twitter and sharing them amongst my friends and I still get, "Well, what is Bitcoin?"  I could tell you a list of the things that the questions ask and people still ask me the same questions, and I'm desperately trying to onboard them; I'm desperately trying to say, "You should just get a little bit of this"!

Brandon Quittem: Couple of great points.  One, the derangement syndrome, Bitcoin derangement syndrome; you had a chance to buy it at an earlier price and you sort of in your mind create a mental anchor to that earlier price and then feel like you missed it; and then you sort of resent Bitcoin for it.  And yeah, then it kind of expresses itself in weird ways.  And, the cyber hornets on Twitter like to pile onto people, but you see people doubling down on their ignorance to Bitcoin and that's happening all over the place.

I think it's becoming easier to understand Bitcoin, but I think it's important to recognise that the first time you hear about Bitcoin, you're initial reaction should be, "That sounds like a scam [or] I don't think that can work".  Almost everyone, that's their initial reaction, "What do you mean, some magic internet money run by computers is trying to overthrow dollars?  I'm 35 years old, I know what money is".  And, that's the natural response.

Then you have to look at predispositions.  I think most people who got into Bitcoin, let's say before 2017, had an advantage somehow, meaning they studied Austrian Economics, they were in a country where the currency failed, or any number of different things that would make understanding Bitcoin easier.  Maybe you're just an edge-of-the-culture, open-minded-type person.  Any of those things can get you in early.

But, I think what's interesting now is that 2020 forced everybody to wake up and I've been doing an experiment on my personal Facebook where I'm just posting about Bitcoin a lot and people are starting to wake up.  And, people who were hardnosed are starting to get involved, and I think it's because they sense something's wrong with the money. 

I think that's going to change now where Bitcoin is going to become a little bit easier to understand; there's this massive cannon of education; onboarding's going to be easier; we're not divided with Bcash hard fork.  So, the cyber hornets are going to be very ready to onboard this next wave.  Undoubtedly, the wave will swing super far forward, there'll be shitcoin pumps, they'll be all this madness again and then we'll have to train this new class on how to take a little bit more self-sovereignty, take those steps. 

I think that's important too in a sense like existing hodlers do need to protect their investment and protect the network by dragging the newbs forward.  And it's hard, right, this is all new stuff.

Peter McCormack: Dude, listen, when did you get in; are you like class of 2014?

Brandon Quittem: No, I bumped into Bitcoin in 2011 when I was working at Oracle, my first job out of college selling software.  But it was, "Oh, look, friends can buy drugs on the internet with magic money".  That's cool, didn't think anything of it.  I wasn't really ready.  I was just a corporate business guy.  Then, I bumped into it again in 2014.  I rebelled against the corporate drone of life and became like a hippie backpacker, building online businesses and travelling for a few years.  I bumped into Bitcoin again; okay, it's starting to make sense.  But again, I wasn't ready. 

And then, it wasn't until 2017, number was going up, and I got dragged in from some friends.  Then I was like, "Woah, there's a lot here", and I bought into the whole blockchain, everything-type narrative.  And, I decided to totally re-architect my life from corporate drone on one side, over to wellness, hippie, yoga, philosopher, entrepreneur, to somewhere in the middle, which I feel more aligned with Bitcoin.  I think it suits my interests, my skillset, and it's a mission bigger than myself that I'm willing to fight for, in a sense.  And, it makes me optimistic about the future.

Peter McCormack: That's really interesting, because mine's similar-ish.  I can't remember when I first heard of it, but I certainly didn't pay attention to it until 2013.  Because I used to work in a little bit of tech, internet stuff, I'm sure I heard it mentioned or something, but I never …

Mine was 2013 and it was because you could buy drugs on the internet.  Literally, I got a phone call from my friend.  He was like, "Pete, I've found this website where you can buy drugs online".  I was like, "What?!"  So, he showed me and I bought my first Bitcoin straight on there and it was fucking brilliant.

Then, I traded a bit, but CFDs, and made and lost a bunch of money.  And then it crashed and I just thought it was dead.  I used to keep checking the price and it was dropping more and more, and then it kind of based out.  And then, it started to go up and I was thinking, should I get back in, and then I ignored it.  Then I was the same; in the start of 2016/2017, I got back in, because I had to get some Bitcoin, and then kind of stuck with it and it started to make more and more sense. 

But, where I'm going with this is, there's been a real shift in the last three to six months.  I mean, let's just go this last week alone.  Ray Dalio saying online, "I might have this wrong; let's talk about this.  These are my concerns".  I mean, that's basically one step to, "Okay, I'm fucking in", and I'm almost certain he will.  Now he's changed his mind, he's open to it.  We've also had Nouriel Roubini say, "There might be a store of value".

We've had Paul Tudor Jones, we've had Druckenmiller, we've had Michael Saylor, we've had Square.  I get a lot of emails from listeners, dude, lots of fucking emails and I'm having a lot of people who are saying, "I want to buy it for my company.  Do you know how I could do it?"  I've had people who work at funds getting in touch saying, "Can we meet for a coffee?"  It's different this time.

I guess, 2017, it was Number Go Up, let's get excited, let's get involved.  I think now feels a lot more -- the FOMO feels different.  I would say the FOMO 2017 was, "I don't want to miss out on gains.  Here are some gains I could make", and I think some people may have gone in thinking, "I'm going to go in and out and make some money.  Now I think this FOMO's slightly different; it's like, "I don't want to be left behind".

Brandon Quittem: Yeah, I completely agree, and I think that speaks to Brady's thesis of the HODL FOMO.  He just tried to name what you described, and I think it's right.  We're seeing this Titanic hitting and iceberg and it's going down, and the central banks, they're playing the music, no problem.  And then, smart people are trying to get their arse to the life boat and more and more people are doing that.

A guy like Dalio, well respected; he's a titan, no matter how you look at it.  He kept writing this analysis the last two years.  He was screaming for the need of Bitcoin, but he totally dismissed it, but he couldn't see the obvious thing that we're all like, "Dude!"  But, that's super common with Bitcoin, especially with smart people.

I wrote about this in my Mycelium of Money essay, where I essentially said, "Understanding Bitcoin's hard and smart people, you look at it and you make these hasty assumptions and you think you have it figured out.  It's not intuitive, it sounds like it's not going to work and it's complicated.  So, people see that and they make up their mind, which is kind of like a false peak.  You're climbing a mountain and you think you've hit the top of the mountain and you walk a few more steps and you look and you go, 'Oh, man, I'm not all the way there.  I've got to keep climbing'.  You climb up again, another false peak, and then you have to relearn and keep going".

I think assessing Bitcoin's like that and what Dalio just did was he sort of admitted, publicly at least, that he doesn't know Bitcoin as well as he thought he did.  And like you mention, that's pretty much a guaranteed path to adopting, and I think that's a very interesting paradox with Bitcoin.  People always say, "Hey, why are there no Bitcoin haters; there are no good critiques?  There are the whiners, the deranged people and then the people who have entrenched interest who are just sort of lying to spill the narrative; but, there are very few intelligent, thoughtful critiques of Bitcoin".

I wrote about this recently on Twitter, maybe a few months ago, but it's essentially the paradox is that as soon as you understand Bitcoin, you are compelled to own some, because it fundamentally is a useful asset for humanity.  As soon as that clicks, you buy it.  Almost no one understands Bitcoin and doesn't own it, unless they have some weird reason, like the journalists want to keep a distance, or whatever.  And I think that incentive alone is all we need.

So, it's sort of like, how long does it take until you understand that you need this.  And everyone's short Bitcoin and only 1% realise it; that's kind of how I see that.  And, we're seeing this all over the place.  All the numbers are going up; all the Bitcoin start-ups built in the bear market are cruising; River's saying their doing a great job, breaking all-time highs; Swan's customers are just exponential recently; so, it's happening.

Peter McCormack: I download!

Brandon Quittem: Yeah!

Peter McCormack: Dude, listen --

Brandon Quittem: Are you seeing new people come in?

Peter McCormack: I'll show you a graph.  If you go on my website now, whatbitcoindid.com, right, let me show you this?

Brandon Quittem: All right, which page?

Peter McCormack: See at the top, it says "Income Reports"?

Brandon Quittem: Yes.

Peter McCormack: Right at the very top, you can see "Income Reports", right?  So, ever since I got my first cheque, I've done these income reports.  For every month, I just report all the stats and everything I'm doing.  Click on October 2020.

Brandon Quittem: Okay, let's see.  The site is loading very slowly.

Peter McCormack: Scroll down and you'll see "October Downloads".

Brandon Quittem: Oh, man, my internet is going so slow.

Peter McCormack: But basically, initial growth of my podcast per month was up to around -- March 2019, I kind of have a peak.  In between March 2019 and kind of May of this year -- no, July of this year, I was kind of just up and own, up and down.  I'd go up to 200 down, 1,000 down; I'd come down to like 150, up and down.  And then, over the last three months, I broke 250,000 and then I went to 320,000, 330,000, 340,000, then I went to 460,000, then 480,000.  So, for the last three months, I've essentially doubled.

What's been really interesting is that -- can you see the graph now?

Brandon Quittem: Yeah, I'm on the graph.  It's actually very, very impressive.

Peter McCormack: Yeah, but what's happened is, I'm still doing the same bloody job, right?  But, there's another indicator.  I always say in my show, "If you want to reach out to me, here's my email address; I respond to everyone".  I am getting five to ten emails a day; it's people reaching out.  Somebody is like, "What do I do about security?"  Today, a guy, "I want Bitcoin, I want to pay off my mortgage; where do I start?"  I'm just getting so many.

The indicators are that it's happening now.  There are more and more coming in, and we're about to enter into that crazy period again.  I think all of next year, it's going to be super interesting.  But, it's put me in that position now.  I am very, very nervous to sell Bitcoin and feel like I always need more and I am certainly short.  I'm irresponsibly long Bitcoin, but at the same time I feel like I'm irresponsibly long fiat as well.

Brandon Quittem: I totally feel you on that one.  I own an online business that I essentially started when I left Oracle and was travelling.  It's essentially teaching business skills to wellness entrepreneurs, like teach a yoga teacher how to market themselves through online courses; stuff like that.  And, the business was great.  It paid for my wife's and my life for five years and we could travel and do whatever we wanted.

Then, I found Bitcoin, neglected the business.  I was like, okay, I can just keep the business and it just pays me cash every month for the rest of my life.  I want that because it gives me freedom and it's allowed me to transition to this new career.  But now, I'm sitting here going -- before, I was like, I want productive assets spitting out cash because I want my freedom; but now I'm going, "Oh, man, I don't know if that business can provide the ROI that just selling the business and turning it all into Bitcoin immediately is worth?"

So, I feel the same thing.  I keep a small cash balance for the short term, like you said, six months; but other than that, I'm buying Bitcoin.  And now I'm like, what assets could I sell and this nice one that provides freedom, here I am trying to sell it.  And, we'll see what happens with that, but I hear you man, I feel sure as well.

Peter McCormack: I get it, I get it.  It's funny; I was just thinking, like going through an idea in my head, because I was thinking, when you talked about learning Bitcoin, I am naturally a slow learner.  I've said it a million times, people get pissed off with me saying, but I'm not technical and I don't understand economics the way other people naturally do.  I'm a creative, you know.  Give me a marketing campaign; I'm going to tell you how to do it.  Give me a slogan to write; that's my bag.  I'm not technical, I'm not economically-minded, so it just takes me longer, so I'm quite dismissive.

So, when I first discovered Bitcoin, I was like, "It's just funny internet money".  And then, when I got into it again and started doing the podcast and I would hear people talk about hyperbitcoinisation and in my mind I was thinking, "Fuck off, that's not going to happen; what are you on about?!", lots of different things like that. 

I think what it is, it's a little bit like, you know Bill and Ted; have you ever see Bill and Ted, the original?

Brandon Quittem: Oh, like Bill and Ted's Excellent Adventure, or something like that?

Peter McCormack: Yeah.  They go back in time.

Brandon Quittem: I think it saw it a long time ago, I don't remember.

Peter McCormack: But, if you brought somebody from, I don't know, Victorian times to now, right; suddenly there are cars everywhere and mobile phones and technology.  That is such a shift from where they were at that time, just a huge shift from them.  For them to comprehend the world we're in now, it doesn't make any sense.  And I think, what it is is the smartest bitcoiners out there are foreseeing a world that I just haven't had the ability to see. 

I'm like, "No, we're always going to have government".  I don't see flying cars, I don't see the Fifth Element kind of future; I see just incremental stages, but it is starting to make sense.  Like, these conversations like I had with Nik yesterday, the one I'm having with you now, I'm like, "No, I get it now, I can see where it's going", but it's taken me a long time.  Trying to explain that to one of my no-coiner friends is close to fucking impossible!

Brandon Quittem: 100%, I feel that so much because my college friends, good buddies, I still hang out with them and we do awesome stuff; they're fantastic people and they all own Bitcoin now because I badgered them enough.  But, where I start talking about how Bitcoin changes me or this community, or how we're separating money from state, or how you talk about these long, historical trends, they're like, "No.  I view Bitcoin as a stock that goes up, you crazy person!", and I think most people are in that same position like you mentioned.

I think it points something unique to sort of look at bitcoiners and say, who are they; what's the Venn diagram or the overlaps that we can say are similar about bitcoiners?  The obvious ones are, at least using Twitter as a representative sample, which may or may not be good, they're autodidacts.  So, they like to learn, they're curious, they have lots of different specialities because they're curious.  It's almost like they want to learn it for themselves, they want to think through all the problems themselves.  I definitely feel that way.

So, you kind of have this, first principles, polymathic-type people; so, they're ready to conquer this hard, intellectual challenge more readily than the average person.  Also, they're disagreeable, like personality trait disagreeable, meaning that they're comfortable going against the grain.  And evolutionarily, that's a recessive trait for humans, because our DNA is essentially forged through small, hunter-gatherer tribes.  And like you mentioned earlier, if you're on your own, you die.

So, we must seek approval from our peers, because if we're not in the group, we die.  And so, we carry that programming with us today and so, most people follow culture, kind of like a sheep.  Then, you have people on the fringe who are exploring and they're comfortable not being part of the in-group, and those are the type of people who find themselves to Bitcoin.

It also lends itself to amazing disagreements and fights on Twitter.  We sort of sharpen each other's tool, we over-index with our strong opinions and, yeah, there are some consequences to that.  But, I think it's quite interesting to say that's who bitcoiners are.  Each cycle, it becomes more sanitised, more normalised, because the surface area of the hodler base can now infiltrate more normie culture.  Someone in 2020 who onboards to Bitcoin is not going to listen to the 2011 to 2013 class; they're not the same type of people.  But, the 2017 class, they can start to infiltrate the normie scene.  And so, I think it's going to be easier and easier to get the message; it gets more gentrified or sanitised. 

And then it brings me up to this interesting idea of, if we're right, there's going to be a massive wealth transfer here and it's away from the institutions and the entrenchments and it's towards this curious, new, excited, also optimistic class of people, also paranoid, whatever we can describe them as; but, that wealth transfer is going to happen if we're right and to me, I would much rather have people who I believe earned it have the money, so then they can allocate capital in a way that is not influenced by the politics of the day. 

I'd rather have a first principles, hard leader who makes hard decisions even if it's not popular, because it's right and good and just; I'd rather have that group allocating capital at a higher rate than the people who got their position by sucking at the teeth of the state, or their families were wealthy for generations, or some other sort of unfair advantage.  So, I think Bitcoin does level the playing field and we will allocate capital better in that world and so, to me, that's an optimistic future, even though obviously the transition might be chaotic.

Peter McCormack: Well, this has been a great follow-up to my interview with Nik yesterday.  I knew we would go on for more than an hour; I probably could go on much longer.  Is there anything I've not asked you yet because honestly, it's been a really fascinating interview; is there anything I haven't asked you that you wished I had?

Brandon Quittem: I mean honestly, I think we could go for five more hours.  We have lots of things to talk about.  Nothing's initially coming to mind.

Peter McCormack: Yeah.  I think it's one of these ones I think I need to go away and, like I say, it takes me a bit longer because I'm more creative-minded.  I think I need to go away and digest this a bit more, because this interview and the one I did with Nik yesterday, they've really shifted me.  It's almost like my personal halving, like I've suddenly just had a step change realisation that I've been wrong about a bunch of things.

Like I said, yesterday in terms of the Lightning Network, I realised how important it was.  Today with this, I've realised how important privacy is, where I didn't actually give too much of a fuck.  Now I understand just a bit more about how important privacy is.  Now I understand, a step change again, understanding how actually, I never thought you could destroy the state with Bitcoin, but actually you could.  Maybe it isn't going out to destroy the state; the state just naturally has to shrink because the money's moving into Bitcoin and they have less access to it and they can't print it.

These things just take me a little bit longer, so I think I need to go away and digest it, but I want to do this again.  I'd hope we can do it in person if we can all get vaccines.  But, I think we need to do a follow-up, but I think I need my next round of questions.

Brandon Quittem: Totally.  Yeah, I really appreciate the time, Peter; I thought this was a fun conversation and I love wrestling with these ideas and I've been on a few shows recently discussing it and this one felt unique, and so I thought that's pretty cool.

One final based on what you just said, which is there are these step-function changes over time.  That seems to be a principle in nature.  I think some people have described it as "punctuated equilibrium" and we have common phrases like "there are decades where nothing happens and there are weeks where a decade happens", so it's part of our cultural wisdom that this happens.  And, yeah, 2020 is just one of those moments where everything's happening at once and this can happen in your intellectual learning.  You read five books in a row and then once sentence changes your life.

So, how do we optimise for those insights?  It's like the 80/20 rule of up-levelling yourself, or any principle in nature, and I'm a voracious reader, learner, and trying to jam mental models into my head all the time type thing.  So, happy to hear that The Fourth Turning thesis crossed the barrier a little bit.  There's a lot more to this thesis that I think you will appreciate and you will get it.  It's superhuman and I think you grasp those things better than most people.  So, read the essay and I think you might get deep into this.

Peter McCormack: No, I will do.  I think what I'll do actually, I need to find the time.  I think I need to read The Sovereign Individual and The Fourth Turning and then, as I'm reading them, keep my notes and then do a follow-up.  Because, yeah, like I say, I think I take a bit longer sometimes than other people and I know I'm not the only one.  I know people who listen to the show, they always write to me and they appreciate the questions, because I think there are other people who don't click.

Well, we know people don't get it straight away because we know how difficult it is to try to convince our friends.  I know what happens is, when this lockdown ends, I'm going to sit down at the pub and try to say to my friends and they're going to be like, "Yeah, bollocks, Pete!"  But, I know there are other people like this.

But, I appreciate your time; I've loved this.  I love the interviews where I sometimes struggle to articulate my questions because my mind is working as I'm going through it; I'm kind of realising that I'm having a step change myself.  I had that today with you and I had that yesterday with Nik, so I'm really happy about that.

Brandon Quittem: I think that's actually a really good point.  If it's super scripted, you kind of know the points we're both trying to get out; that's fine, right.  You can convey information effectively that way.  But, I'm with you.  I think the most interesting conversations are when both parties are stretched to the limits intellectually and we're forced to adapt and have a symbiotic conversation where you say something that changes me, and I change you, and you sort of go back and forth. 

That's where insights come out and then you get off the podcast and you're like, "Woah, where am I?  I've got to re-listen to that, because we came out with novel insights on the call that I didn't intend on".

Peter McCormack: Dude, I'm coming off this going, "I need more fucking Bitcoin; how do I get more Bitcoin.  Right, which one of my children can I sell?  I kind of like them both".  No, I'm only kidding.  Someone's going to write to me going, "You can't fucking do that; they'll listen, they'll be upset".

But, I've loved this, man.  Listen, let's definitely do this again.  Let's do it again sometime in the New Year.  Let me get through those books, let's get together and I'm looking forward to it, and I really appreciate your time and really glad we finally did this.

Brandon Quittem: Likewise, yeah, appreciate it, Peter. Thanks for doing what you're doing.