WBD316 Audio Transcription

The Nation State Case for Bitcoin with Balaji Srinivasan

Interview date: Tuesday 2nd March

Note: the following is a transcription of my interview with Balaji Srinivasan. 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, we discuss the benefits to a nation-state adopting bitcoin, why India are the perfect first mover and the demise of Silicon Valley.

“It’s basically the best investment of all time, and I have a feeling it’s not going settle down for a while. I mean, it could go to $1 million, even $10 million... $ 1million is no longer a crazy number to put out there for bitcoin.”

— Balaji Srinivasan

Interview Transcription

Peter McCormack: Balaji, how are you, man?  Good to see you.

Balaji Srinivasan: Good to be here.

Peter McCormack: I always love talking to you, as you know.  I can't remember that first one we did.  That was that three-hour monster about two years ago now.  But listen, look, you're approaching a topic that's really, really something I can't stop thinking about.  Your article about India adopting Bitcoin is really on my mind right now.  I've had a couple of conversations recently, one specifically where I was explaining that Michael Saylor a few months ago seemed like a crazy guy putting $450 million into Bitcoin at $11,000, and now probably everyone on the S&P is jealous of him, with Bitcoin at nearly $53,000.

So, for me it's really interesting, because I'm thinking, "Well, who's going to be the MicroStrategy of nations?" and here you come out with this article about India.  So, what was the starting point for you with this?

Balaji Srinivasan: Well, so obviously, as someone of Indian descent, I've been thinking about India and crypto for a long time, and I know that India banned crypto a few years ago and then unbanned it, there was a court decision; and now was thinking about re-banning it.  And, I just wanted to put a marker down to say that actually, India shouldn't ban Bitcoin.  Of course, it can't really ban Bitcoin; it can only ban itself from buying Bitcoin, right, and its people.  But, what it should do is buy Bitcoin at the national level, just like it holds tons of gold for an emergency.

One way of assessing the wisdom of this decision is, if India bought as much Bitcoin as it had bought gold on the day that I said for them to buy it, every year, or six months, or whatever, I will just mark how much money they would have made.  And, there'll be the point at which it passes probably their gold reserves, and there's a point at which it passes 5X of their gold reserves; and so obviously, it's better if they buy before then, but that will be kind of like a market right away to show that I was correct in this very obvious prediction, in some ways.

But, one of the things about it is, crypto is actually very advanced just for India, because it's a way for it to, as a number three power, to sort of have a third way which is outside of either being in the US or China, the dollar versus renminbi trade war, currency war, that is erupting, that is about to erupt, that's about to get even hotter; and also the platform where it's TikTok versus Twitter, and so on.  You can imagine India going global with these decentralised platforms, these crypto protocols, and leapfrogging and embracing in a way that other countries have not.

And so, that's the high level in terms of why I think this is important for India and I'm happy to talk about any specific detail.  I mean, we could go through -- I've got a bunch of good bullets here; maybe we can go through them one by one, like national security and so on.

Peter McCormack: Well firstly, let's just get to the point whereby, this kind of can relate -- my show title will be, The Nation State Case for Bitcoin.  We're going to use India as the lens, because that's the article you've written, but this can apply to other countries, right?

Balaji Srinivasan: Yes, absolutely.  And frankly, I think you can make an argument even for the US and China, but this applies for sure to every country that is not the US or China.  And, if you can't be number one, you want to get behind -- it's kind of like, if you're not Microsoft, you're behind Linux, right; because Microsoft has the interest in having Windows, or rather, let me be more precise.  If you're not Microsoft or Apple, if you don't have Windows or OSX, you're behind Linux.  And, it's in that sense where, if you don't have the dollar or the renminbi, you want to be behind crypto. 

Peter McCormack: Right, okay.  Well, before we get into the thesis, I think we should deal with the issue relating to the banning of Bitcoin in India, because it's come up again and I think it's the fourth time.  It feels like this time, it's actually going to get through potentially; it seems very advanced.

Balaji Srinivasan: Yeah.  I'm very close to it.  I can't give all the details, but there are a lot of smart people in the government who have seen all the energy on social media.  I mean, that thread, both my posts have been viewed literally millions of times at this point and they're smart people in the government.

One of the things about India is, just sort of out of sight of western view, they have really become a country that ships.  I'm not sure how many of your viewers know this, but they should read this post called, India - The Internet Country, by I think it's tigerfeathers.substack.com; I'll get you the exact title.  It basically goes through the incredible development over the last ten years of APIs.  Yeah, it's The Internet Country by tigerfeathers.substack.com, how India created a digital blueprint for the economies of the future.

So, this should be eye-opening to people who've not been following this closely, because India built something called India Stack.  What that is is a set of national APIs for identity payments and data.  And, what's really powerful about that is it's like a functional government set of software APIs that all of these companies can use, that works for a billion people, and that has just gone absolutely vertical in terms of its adoption over the last five years.

It's just something where I was like mouth agape, because it's just a completely new place.  The India of my youth felt like it was stuck in amber.  It had these ambassador cars.  I don't know if you've ever seen them?  If you google "Ambassador car", it's like this very old-fashioned, 1950s kind of car.  And the most fancy Ambassador had air-conditioning; holy cow, right?!

I mean, I loved India in terms of culture, but I didn't think of it as a technology capital, or a technology leader, even though it had plenty of smart people obviously who are good at maths and good at computer science and so on.  Like a lot of developing countries, they had the smart people, they had the talent; they just didn't have it together as an ecosystem.

But now, they're number three in tech unicorns.  They have all the India sector.  They also have Reliance Jio, which is not an afterthought.  They just signed up 400 million people to 4G LTE.  It has the cheapest LTE service in the world; it's cheaper than America; a serious national hardware project that happened in the last four years; just talk about execution and speed, right?

So, that's now a country that actually is potentially capable of doing some interesting things, you know.  And, if we can steer the smart folks in India to even a non-negative stance, where buying Bitcoin would be ideal; but, even if India just regulates and legalises crypto and is more neutral to positive towards it, that's a huge step forward.  And I think that over time, people will find that actually, this is a national security thing, it's an economic security thing, it's a civil liberties thing for everybody who's not the US or China.

Peter McCormack: Okay, before we get into that, because we're going to discuss the potential global monetary competition coming up, I think for some people listening, it would be good to understand the role of the dollar internationally because, as you said, it's a technology; but, how there's a potential for that to be changing over the next few years and the rise of the digital yuan.  What does that all actually mean?

Balaji Srinivasan: So essentially, as I mentioned, I don't think the concepts of "developed" world and "developing" world are valid any more.  I'm actually starting to think in terms of the "declining" world and the "ascending" world.

Peter McCormack: Right, I love that.

Balaji Srinivasan: And, whether folks have realised it or not, the US is part of the declining world; and you can see that on the GDP graph.  Relative share of GDP, of course it's not a zero-sum game; even if your relative share is declining, your absolute can be increasing.  But, I feel in absolute terms as well, the US is regressing; power outages and fires and public health failures and so on and so forth are just system failure.  A lot of things are failing at once and people have been in denial about this.

So, you have this declining country that still has the dollar, not just as a currency, but a global technology platform, right.  It controls SWIFT; it is the default for buying barrels of oil in the Middle East, the petrodollar, which is the basis on which Saudi Arabia only sells oil in dollars, because the US Military protects it; the dollar is used as a bilateral instrument between two countries that otherwise would have to agree on something like, let's say, Brazil and Russia.  Well, Russia's a hostile, but let's say, I don't know, if Brazil and Nigeria were doing a deal, they might use dollars rather than the real or the naira respectively.

So, the dollar is this technology platform, but it's part of a country that's declining.  And it's also something where you have the renminbi, the digital yuan, rising; you have China very aware that the US has weaponised the dollar and uses it as basically a weapon of war, you know, it's a non-violent war; but, it certainly causes pain.  And, China's really good at executing, and they're very serious about this stuff.  They've got like a blockchain government in Beijing.  They will just crack the whip, and they ship, you know.  There's a lot of "cop"; you ever heard that term?

Peter McCormack: Yeah.

Balaji Srinivasan: Yeah.  There's a lot of cop about China, but if you're realistic, it's kind of like the difference between Steve Ballmer and Satya Nadella.  Steve Ballmer was just basically in denial when he was at Microsoft, "Oh, the iPhone?  Anyway buying the iPhone; that sucks.  Google?  Well, yeah, they have a search engine, but they suck.  PlayStation?  Well, they also suck.  Everybody sucks; Microsoft is great".

To be clear, it's hard to do what someone like that does.  He was an execution machine on the enterprise side of things, but in many ways, he sort of spent down Microsoft's future and they're very fortunate that Satya Nadella was able to turn it around and understand open source is good; search is good; cloud is good; mobile is good; we don't actually have to be zero-sum in everything; there was a more enlightened form of leadership.

And in the same way, understanding that China can actually execute, that it has drawn delivery, that it has thermometers that can build a hospital in a day, that can do all this stuff, is also important for understanding that the digital yuan is going to be a real thing.  It's going to be a thing where perhaps Americans won't use the digital yuan to settle in Starbucks, or whatever, because that's just still within dollars, so your consumer may not see it.  But, anybody that's doing international trade will definitely see it and they'll basically -- China will offer a lot of different kinds of incentives for these sort of Belt and Road countries.  Do you know what that is?  Do your viewers know what that is?

Peter McCormack: Yeah.  I mean, you can explain it, because other people might not and especially across Africa.

Balaji Srinivasan: Sure.  So, Belt and Road is basically China's revival of the Maritime Belt and the Silk Road, and this is a huge project to essentially build infrastructure in all these countries, global trade routes to Europe and to Africa, to basically take the world island of Eurasia and just put roads and trains and stuff so trade would accelerate.  And then all the countries that you're putting these overland routes into, China would do deals with them where they'd basically say, "Hey, we're going to build all this infrastructure for you with Chinese engineers, we'll give you big loans, and all you have to do is repay the loans".  Oh, and guess what; if they can't repay the loans, China gets the equivalent of like a military base or something there; they have this sort of repo thing. 

They did this in Sri Lanka.  They basically bought a port there.  They did a deal with Israel for a big chunk of Haifa.  They're very smart about that type of stuff.  They're basically thinking about a global footprint and having Chinese bases and economic bases to just expand their markets and ship all of their goods all over the road, right; and that's the Belt and Road.

Now, that slowed down to some extent after corona.  I'm not sure exactly where it is right now, but I do know that at least the digital Belt and Road of having folks accept the digital yuan is very much still on the radar.  They've been pushing the blockchain-based Government in Beijing and whatnot, right.  Now, the US, by contrast, is like basically your tech companies and, you know, maybe they'll make a move in some sort of jerky way after China launch the digital yuan, but it may do like a cargo cult copy; in the same way that there's a cargo cult copy -- the US copied Chinese lockdown by way of Italy without ever admitting that it was copying China.  It's also copied Chinese censorship without ever admitted it's copying China.  It's copied a lot of Chinese things without admitting it.  It's this thing where it denounces, "Oh, you suck", and then imitates it without ever actually admitting it.

The thing is, when you do that, the original -- that's the reason that Steve Jobs had that saying, right, "Good artists copy; great artists steal", because a great artist has the self-confidence to just use somebody else's library without having to pretend that it was an original innovation, or having to make some edit to make it their own.  A great artist feels self-confident enough to be like, "Okay, you had a good idea.  I'm just going to use that idea, thank you very much"; whereas, a good artist has to make it like some mediocre, crappy, cargo cult version.

So the point is that the US is declining, China is ascending, but a lot of countries don't want to pick between China and the US.  Europe doesn't want to pick.  A lot of Americans think, "Oh well, Europe was with us in the Cold War; they'll be with us in the next Cold War", and it's just not the case; because Europeans aren't interested in just a war for the sake of -- they opted out of Iraq, or many of them did if they could.  They don't want to be in a war with fricking China.

China's pretty crazy, right, and so is the US, in many ways.  So, the whole thing about a war is people lose, businesses are bankrupted.  It doesn't have to be a shooting war for there to be economic and social tidal waves where your poor company is just caught in the wreckage of that day's cancellation or that day's sanctions, and it's just cut off from a screw that it needs out of some silly bureaucratic order, and then you're bankrupt; or some capacitor and you die.  So nobody wants that.

So, for all the countries that want to opt out of this conflict, who are neither the declining nor the ascending, you know the Thucydides thing?

Peter McCormack: The…?

Balaji Srinivasan: Are you familiar with that?  I may be mispronouncing it, but the Thucydides Trap?

Peter McCormack: No, I don't.

Balaji Srinivasan: So it's basically the tendency towards war when an emerging power threatens to displace an existing great power as the international hegemon.  So, it's the trap used to describe the potential coming conflict between the US and China.  And, the thing that's interesting is to articulate a new doctrine which says -- have you seen the meme which is like, "Let them fight"?

Peter McCormack: Yeah.

Balaji Srinivasan: Look, it's obviously best if they don't fight.  But, if you assume that's inescapable, let them fight and just go to crypto, which is peace and it's trade and it's privacy and it is civil liberties and so on, and use that as your global platform so that neither country can ban it, and both countries have crypto sympathisers, or adherence with it.  Certainly the US has millions, and so does China, as you know.

So, the negative energy around it, when you have something -- crypto is many people's first choice and many people's second choice, and that is something where it tends to win in the end.  It's like grudgingly, the Americans may not really like using Bitcoin as international settlement rather than the dollar, but at least it's not the renminbi; and similarly with the Chinese, potentially.  So, that's how I see things playing out by 2030 or 2035.

That might sound crazy now but remember in 2010, if we were to be talking about how so-and-so politician is tweeting at so-and-so politician and so on, you'd say, "They're tweeting; the Federal Reserve?!"  I mean, Twitter existed, of course, but the idea that every single head of state, every politician, would know the vagaries of this interface cooked up in San Francisco; likes, retweets, follows, ratios, quote tweets, donks, reply guys, all of these stupid things about Twitter that you know just be spending too much time on Twitter.  Every politician and world leader knows about this.  It's insane actually.

In the same way, all the stuff that you and I saw, all the stuff that you and I saw over the last several years, with the crypto civil wars, with the maximalists versus etherians versus XRP Army and so on and so forth; all of that is just a preview of what is to come when it's happening at 10X or 100X scale with nation states in the game, with big companies in the game putting their own crypto tokens out.  All of these are like swarms of different kinds of social networks competing for global dominance.

It's like this social war of networks expanding where they're taking intellectual territory as opposed to geographical territory.  Go ahead, give me your thoughts.

Peter McCormack: Okay, so it's a question before we get into the detail; just something else I don't understand, but I need to understand.  In terms of when a country holds reserve currencies of other country's currencies, how do they actually hold that reserve; how does that actually exist?

Balaji Srinivasan: Great question.  Often, it's just buying treasuries.  It's unusual for them to have large stacks of cash for lots of reasons, because you can't store that and there's a robbery risk, or whatever; but, yeah, just like buying treasuries or buying other instruments that are equivalent to USD.  And now, of course, if you buy treasuries, you have bank interest rates or, actually I haven't checked recently, but I believe --

Peter McCormack: There are some people listening, Balaji, will go, "What do you mean by buying treasuries; what does that actually mean?"

Balaji Srinivasan: What does it mean?  It means you're buying a bond, which will pay you back a certain amount.  Let me see if I can give you an actual quote here on a T-Bill that someone has actually bought.  So, I'm going to give you the formal definition.  So, usually these are things which are basically, they're good for dollars; you can sell them in denominations of a thousand, but you can basically buy like a $5 million worth T-Bill.

It's something where they have maturity typically of one year or less, and the longer the maturity date, the higher the interest rate the T-Bill will pay to the investor.  And so, this is like a safe way of basically holding dollars, because you can hold $5 million in a T-Bill and it's backed by, "The full faith and credit of the US Government"; as distinct from a bank account, where there's an FTIC threshold, which is a lot less than $5 million.  And so it's essentially -- go ahead.

Peter McCormack: So, what is a T-Bill?  Is it a certificate like you get issued; is it just something like an agreement; is it a contract you have with the US Government; what is the actual thing itself?

Balaji Srinivasan: Yeah, it's effectively a contract you have with the US Government; in the same way a dollar is sort of, you don't usually think of it as a contract you have with the US Government, but it is, because they will accept it for certain kinds of things like parking tickets.  Yeah, it's like a contract you have with the US Government, and it's used to fund public projects.

When an investor is buying a T-Bill, then it's like an IOU from the US Government to the investors, and you're basically trusting that the US Government will pay out how much that T-Bill's worth.  So for example, you buy a T-Bill of $1,000 and you pay $950 for it today, and you get back $1,000 in a year from now or something.  But actually more recently, you've had negative interest rate bills where, I should quote the exact numbers; I'm not sure if it's negative of this exact moment.  But, you pay $1,000 today and you get back $995 in a year from now, which means you're just guaranteed to lose money.  And that doesn't make any sense in theory, right?  Why would you pay negative interest rates; that kind of defeats the whole point of investing in something.

The answer is basically, to store money at that scale, you can't store it in a bank account, so people will just go and buy T-Bills with it.  And then what that does is, because you're getting negative interest rates on T-Bills, they have to chase higher upside things in the rest of their portfolio, and so they end up investing in venture and they end up investing in higher risk things.

So, in an interesting way, the whole negative interest rate regime has meant that many academic endowments and stuff like that, that are money managers, have steadily increased the percentage that goes into high upside things, like venture and tech.

Peter McCormack: Right, so this is why Michael Saylor can borrow $900 million at 0%?

Balaji Srinivasan: Yeah, exactly, because basically it's something…  I mean, the problem with all of this is, it's not like the blockchain where you can get a global view on what the F is going on; there is no way to track where the money is going.  I mean, the Fed has a global view, but I'm not even sure they're actually analysing the economy as a graph in quite this way and figuring out what's happening with it.

But, one thing that I am quite concerned about, as you know, the numbers are getting crazy in terms of valuations of companies and stock market prices, and so on.  Did you see the tweet by Joe Colangelo, which I knew about this, but I'd forgotten about this until he mentioned it; this was like a day or so ago?

Peter McCormack: No, which one was it?

Balaji Srinivasan: He basically said that, during Weimar, Germany, in the run-up to hyperinflation, everybody thought they were getting rich, because asset prices were just going through the roof.  Here, I'll get the exact tweet, "Currently reading, When Money Dies, the history of hyperinflation in Weimar, Germany.  One of the wildest aspects I never knew was that early on, people all thought they were getting rich.  They were selling hard assets where they thought were insanely high prices in marks".  And, that is actually similar to the asset inflation regime we're going through now, and I think it's very much worth tracking that.

The thing about it, by the way, is people -- there's this weird thing and I saw this with COVID as well, where you can make this rational argument with all these graphs, all these historical citations, all of these plausible things; and people will deny it, they'll mock you as crazy, etc.  And then, when it happens, they don't spend actually a lot of time saying, "I'm sorry [or] you were right", or whatever.  I mean, that's not even the point to say that you're right, because the point is not to be right; the point is to avert that.  They just kind of flipped yelling at the other side.

So, I think this is one of the most predictable things in the world that's going to happen.  I'm not sure at what level of printing we're going to get to serious inflation, if not hyperinflation, but they're going to try.  They're going to push it until it gets there.  $787 billion, 10 years ago, 12 years ago, that was considered this insane thing, remember, during 2008/2009?

Peter McCormack: Of course.

Balaji Srinivasan: $787 billion; that was like this jaw-dropping number.  Now it's like $1 trillion a week.  Who even knows; has there been anything on how many trillions was printed?  So, the reason I just say that is, you're right, people can pull out these loans that are massive to go and buy crypto, or leverage up; but, it does feel like they're surfing something which is roaring beneath them.  And again, I don't have the numbers on that yet, because I don't have a global view on the economy, there's no blockchain of dollars; but, that's my strong intuition based on the past.  We'll see.

Peter McCormack: Well, another thing I need to understand; when you talked about maybe there's a deal between Brazil and Nigeria and they don't want to use their sovereign currencies and they're using dollars, what's the movement of dollars there; are these part of the T-Bills; how are they holding dollars to do this?  I don't understand about this flow of dollars.

Balaji Srinivasan: That's a good question actually.  So, how do countries do international settlement in dollars?  Actually, I'm not sure I know the mechanics of that.  It's possible that they both have some intermediary take care of it for them, or they just sell treasuries, you know; one party accepts ownership of treasuries to the other, because there's a secondary market in that.  I should research that; I actually don't know the mechanics of how they do it.

Peter McCormack: Yeah, because the thing I'm getting to is this point of CBDCs because once we get to CBDCs, will they issue treasury bills, or will they just issue dollars?

Balaji Srinivasan: Oh, CBDCs are different.

Peter McCormack: Yeah, but the point I'm getting to is, will a country perhaps hold CBDCs as a reserve currency?

Balaji Srinivasan: Yes, absolutely.

Peter McCormack: Because, you don't need to hold the dollars in the bank?

Balaji Srinivasan: Well, here's the thing.  You're using dollars and CBDCs equivalently, and they're distinct.  A CBDC could just mean the digital yuan, it could mean the digital franc or the digital pound; it's just a central bank digital currency.  And, 80% of countries, according to Boar et al (2020) in that recent paper that I cited in my most recent post, How India Legalises Crypto; there's a paper there by Boar et al (2020); 80% of central banks are looking at digital currencies of some kind.  So, a CBDC is not the same as the dollar.

What you're asking, I think is, what is the distinction between holding a dollar between holding a T-Bill?  They are different, where a dollar is just a currency instrument where you can just spend it.  A T-Bill is something where you can value it in terms of dollars and you can think of it as worth $5 million worth, for example, but it's not quite the same; it's like an IOU for dollars.  But people think, so long as the US Government is solvent, it will be worth that.

So, it's not quite the same as dollars, but it's something that you can often treat much like that, as a money good kind of thing.

Peter McCormack: Shall I explain where I'm going with this?

Balaji Srinivasan: Sure, but the thing is, a CBDC would probably be architected quite differently.  It would not be based in terms of treasuries; it would actually be an outstanding amount of digital cash where you could actually track it back and forth.  A treasury would actually be a smart contract on top of that central bank digital currency blockchain, where it would be something where there's some interest rate and some payback period or maturity date, and you could see those people who had bought them with different maturities, like one month or three months, or whatever; and, those would be smart contracts on top of that as opposed to the underlying base digital franc, or whatever.

Peter McCormack: I'll tell you where I'm going with this.  It's going back to your article, which by the way, anyone listening, definitely read this, ideally before you listen to this episode, or have it sat alongside, but it's where you talk about India adopting Bitcoin alongside the digital rupee.  So, if they were going to back the digital rupee with digital gold, would people therefore be incentivised not only to hold Bitcoin, but potentially hold the digital rupee as a reserve asset as well, as a foreign reserve; and they would trust it more, because it is backed by Bitcoin?

Balaji Srinivasan: Well, there's a basket of currencies, right, that the IMF has, which is like the SDR, the Special Drawing Rights, and a while back they updated it to include the yuan.  Right now, it's 40% dollars, 30% euro, 10% Chinese yuan, 8% Japanese yen, 8% pounds sterling, which is frankly still massively overweighted towards the West.  These institutions are frankly obsolete, but it was a big deal for China to be in there; so, the rupee isn't even seen there, right; India isn't on the National Security Council.  Essentially, 2020 is still running on 1945, or 2021 is still running on 1945 institutions; so, in the STR, the rupee is not there.

What I think you're asking is something somewhat different which is, could people have the rupee as part of their national holdings?  Quite possibly.  What you're asking, I think, is the question of whether the currency is internationalised; that is to say, is it intended for people to hold beyond the borders of the country?  For example, the Swiss franc is an internationalised currency and it is meant to be held abroad.

The thing is, there are pros and cons to currency internationalisation.  One of the pros is you have more access to capital markets and so on.  One of the cons is that, because your currency is held by foreigners, you can't use coercion to the same extent; you have to do convincing, as opposed to coercing, because coercing is only possible for that few people who you can point a gun at, who are members of Switzerland or whatever, and everybody else that holds the franc is outside of your jurisdiction.

So, is it possible for someone to have a portfolio that includes the digital rupee?  Of course it is.  Foreign exchange today, people would have the rupee, they'd have bets on this or that currency; and in fact, the thing about Forex markets is, because they're so large, if you can time it right, you can put in 1 billion and make 1 billion too in a few days, or lose 200 million in a few days; so, a swing could be a very, very big deal for you in Forex.

I think, what happens is lots of individuals are going to become Forex traders because, I think, in the not too distant future, just like you've got, I mean, how many Twitter feeds do you follow; how many websites do you look at?  A lot, right.  So, I think the near future is something where your crypto wallet holds your Bitcoin, all the national digital currencies that you are interested in, maybe the dollar, maybe if you go to Canada you've got the Canadian dollar, or the British digital pound; it's got all your stocks; it's got all your bonds; it's got other cryptocurrencies you hold; it's got tokens that were issued to you.  That's obvious, right.  You're going to have a crypto wallet that just holds everything.

Then, everything just gets traded against everything.  You have this gigantic paramatrix and Forex and crypto exchanges and remittances and secondary markets and primary sales are basically just different parts of this matrix.  For example, a stock-to-stock trade is just one submatrix of stocks versus other stocks; or, a secondary sale of stock is like currency for stock; or Forex is currency for currency; so this gigantic asset-by-asset matrix where all wallets are against all others.  Uniswap is like a V1 of this because they've got all this.  And I think that's what the future is.

One of the consequences of that, by the way, is one country's national digital currency is like another country's cryptocurrency, because if you think about that, it's like one man's terrorist is another man's freedom fighter, right?  So, the reason is, if you're in India, the digital pound, like digital gold, you don't have control over it.  Whether it's no one has control, or it's a foreign entity that has control, you don't have control.  And, depending on how these CBDCs are set up, what I expect is them to be architected similarly to how we set up USDC.

So, I'm not sure if your viewers know the USDC is the second largest stablecoin in the world.  Stablecoinstats.com does several hundred million dollars a day.  I was involved heavily with launching it at Coinbase, working closely with Jeremy Allaire at Circle, and that's pretty widely adopted at this point.  So, USDC is interesting because it's intermediate between a banking API and a private key. 

If you have a banking API key at Wells Fargo or Chase, or something, they can basically, and they will, shut you down.  I mean, if you try sending $1,000 to 100 people in 20 countries with JPMC's API or Wells Fargo's API, it will just get shut down very quickly.  You'll go to some fraud check or whatever and it won't work.  But, you can do that with stablecoin; it's just much more free, much more programmable. 

Yes, it is true that there is still, depending on which stablecoin you are using, that there is still some root user that can freeze other funds or lock accounts, or whatever, in exceptional circumstances.  But, this is more similar to an API key for amazon.com where 99.9% of the time, you're able to write files to hard drives, spin up computers, pull them down and in extraordinary circumstances Amazon will intervene, but it's just much, much freer than it was before.  And then of course, you go to crypto, which is private key which can never be interdicted and that's the full, local sovereignty, right.

What's my point?  The point is, if you've got a country that has anything that's similar to USDC, where it's an API key that you hold on your laptop; if that is the case, that can be held anywhere.  So, you can have Nigerians holding Swiss francs or, more to the point, Venezuelans holding Swiss francs.  And, if you see the dollarization of Venezuela, that's clearly something they want.  And so, you start to have this world of global currency competition where sheer coercion is simply not enough; it's just one feature in the feature matrix.

You also need a stable monetary policy, maybe you have upside, maybe you have smart contracts and programmability, scalability, transparency, and/or censorship resistance.  You've got a bunch of features in this feature matrix and your portfolio will include different things that are useful for different things, right.  Just like you've got some dollars and you've got some stock and you've got some bonds, or whatever; you'll have a different kind of profile when you've got thousands, millions of different assets in your crypto wallet, and you'll optimise for different things: daily consumption, upside, privacy, scalability if you're writing programmes, and so on.

So, the reason I just say all that is I think some national digital currencies are going to compete on axes that look very similar to a cryptocurrency.  For example, I wouldn't be surprised if Estonia does something like that and, whether they acquire or partner with an existing blockchain and have that L1 powering their national digital currency, that's the kind of thing that they might do.  The reason I think that's possible is they have this e-residence programme where you can go -- I was one of the first three e-residents. 

It's actually very smart because they're like, they're a million-person country; they're on the border of Russia, which historically occupied them and was not very nice to them; and, if they do get hit, they would like to have friends around the world.  They don't have the space to invite 50 million people to Estonia, but they can scale software-wise, right? 

So, they have all these Estonian e-residents, which has probably doubled their population around the world; and they could do something like this, where they have a software expert, a software platform, so a lot of people who are using it, and then it's just about sober management of this thing.  Twelve people built Instagram, which a billion use; certainly a million Estonians, which built Skype and so on, could do something like that.  They could build a global digital currency that folks could use.

So, the reason I just say this is I think we're just at the beginning of this, where the concept of currencies and national currencies and cryptocurrencies being completely disjointed; I think those blend together.  And of course companies can issue these as well.  And you might say, "Well what about legality?" and I think what you're going to see is places like Miami, Singapore, Israel, Estonia, Switzerland, Dubai, the historical tech and finance capitals of the world, those places will be the earliest adopters of this kind of thing. 

You've seen Miami call itself "Bitcoin country" and so on, in terms of the branding, and that's awesome, because that means that you have these financial centres which cannot coerce, so they must convince.  Because they cannot coerce, they must convince, and so they adopt crypto and so lots of business are incorporated there; and it may get turned off in some of these big countries, but you know what; that's just the cost of doing business and you just bring it back when it's possible there.

So, as long as there's even 10%, 20%; I think it's going to be more than this, but even that percentage of the world that doesn't ban crypto, it will be alive forever and then eventually, other countries will continue adopting it.  That's kind of my forecast for the future.

Peter McCormack: So, we're obviously moving to a world of CBDCs, it's inevitable, and I don't think today's the day to discuss the impact of those in terms of surveillance and control by the state; let's save that for another day.  Let's just -- the acceptance that is coming, what do you see of the impact on a CBDC between a country that is pro-Bitcoin and a country that is hostile to Bitcoin; do you think it has an impact on their CBDC?

Balaji Srinivasan: Absolutely, because if something like Bitcoin offers a small premium over holding the CBDC, it's basically the best investment of all time.  And, I have a feeling that it's not going to settle down for a while.  It could go to $1 million or even $10 million, or whatever.  $1 million is no longer a crazy number to put out there for Bitcoin; $10 million is no longer a crazy number.  It's crazier, but it's not insane.  We don't know where it's going to get to. 

Even if it only gives you an appreciation of a few percent a year when it hits its terminal price, that's more than almost any cash-like thing will give.  So, there'll be an enormous incentive for people to be able to partake in the upside.  And so, any country that doesn't embrace that, they just have to give up control; and, they give up some degree of control to get financial upside for their people.

Now conversely, there are downsides of giving up that control; I'm not saying that there are zero.  There are folks that can send money into the country who might be bad actors.  That is a real thing; it happens rarely, but it's the kind of thing that people are really scared of.  And on the third hand, if you try to ban legal use of cryptocurrency, the criminals aren't going to be deterred from that.  This is like, if crypto is criminalised, only criminals will use crypto; I think there's some truth to that. 

You can argue that criminals can't swim among the law-abiding and so on, but I think that on balance, you want to legalise crypto and take the good with the bad, and use the money that you get from the good to figure out other solutions for the bad, because you can't just give up $1 trillion that easily; there are other ways of solving problems.  I mentioned this before, but banning crypto to prevent crypto crimes is like banning driving to prevent drunk driving; there are other ways of going about it.  There's too much cost associated with that.  So, I think that's the issue, basically. 

I think CBDCs are actually a good idea.  It's actually good in many ways, because it moves the world towards a pro-crypto direction.  I mean, that's a huge -- just think about that, right.  Satoshi's whitepaper, and not just his whitepaper, his code and his execution over the span of years, catalysed something that is still compounding today.  One man's anonymous post, or pseudonymous post on a message board, has every government in the world reacting.  Even if they say, "Bitcoin is bad, therefore we're doing a Bitcoin-inspired thing", just think about the impact that that had.  It's remarkable.

It reminds me, Peter Thiel, three months actually after the Bitcoin blockchain was launched, but I don't think he was aware of it at the time, he had this quote in April 2009 that really sticks with me where he said, "The future's a race between politics and technology, and it may be very close.  And, our future may depend upon one man who makes a world safe for capitalism, and that's Satoshi".  He didn't know Satoshi at the time; he thought it might be Patri Friedman who, by the way, is also a very smart guy and had the concept of competitive government with seasteading and so on. 

I think seasteading, in retrospect, was early, but I don't think it's never going to happen.  I think something like that will happen, you know, competitive government.  Maybe it will be cloud countries; it's a book I'm coming out with.  But, the concept of one man who makes the world safe for capitalism, that happened.  How amazing is that, that Thiel saw that coming 10 years ago, 11 years ago, the race between politics and technology.

Peter McCormack: But, those two things, Balaji, are complementary; Bitcoin and seasteading are complementary?

Balaji Srinivasan: Absolutely complementary, that's right.  I'm just saying that in terms of immediate material results, crypto produced them over the last decade, right?  Seasteading has a longer burn on it.  I think it will work eventually.  All these cruise ships are cheap; the concept is out there; by 2040, 2030, who knows what can happen.  Some concepts have a long burn.  Digital currency had a long burn, going from Chaum and eCash and whatnot; it was years of people stoking the fires, keeping the ideas alive.

And for Bitcoin to work, by the way, you had to have lots of fairly powerful computers, you needed people to know peer-to-peer networks.  There were a lot of things that had to combine.  And then the cultural moment had to happen.  One thing I will say, I remember thinking when Bitcoin came out, like around that time I was like, "Is Satoshi too late?  Didn't they just already print the money?  It's over.  It was this great idea, I understand why we need it, but it's over now", and of course he wasn't too late; he was just on time.

Peter McCormack: Interesting.  Okay, so let's put the lens back on India, because I think it is a very good lens that you put out there and obviously it's personal to you, but I still think it's such a powerful nation.  You've also said they can't ban Bitcoin.  I think you've got kind of a wider view on this.  We know Bitcoin is essentially banned in China, but people still use it.  I went out to Bolivia the year before last before the ban; Bitcoin's banned there, but I still met up with bitcoiners and we hung out.  So, you can't ban Bitcoin, so what does it -- I mean, it just creates a premium on the price?

Balaji Srinivasan: Yeah, so the thing is, India did something called "demonetisation" in late 2016, where they took a bunch of 100 rupee and 500 rupee notes and they just said, "These are all worth nothing in so many weeks, and you have to come in and exchange them for new notes".  The idea was that for years, so-called "black money" had been hoarded by bad actors, and this was a way of forcing them all out into the open and making them all exchange their money for new money.  Then, those that didn't have a way to show that that money had been earned legitimately, banished in a cloud of dust.

Now, there are a lot of arguments over whether this policy was good or bad, or what have you; it did a few things.  First, it caused humungous lines for people to go and exchange their currency; and number two is, it did accelerate the transition towards Fintech and online payments in India, because it just was kind of a shock to the system, like COVID, that did actually shift them into this "cashless economy".  So, UPI adoption has just gone vertical over the last four years.  So, it wasn't just disruption; there was also something that was built there to accommodate the unemployed.

Now, with respect to these countries that "ban" crypto, clearly they haven't had an impact on the crypto price.  What they do is they push it to OTC, they push it underground, they push it overseas.  It's something where there are still millions of Chinese users; they just have to do things like get a VPN and buy it overseas; or they have to do it through legal channels, like you have an overseas vehicle that buys Tesla or MSTR stock now; or invest in a fund that has exposure to crypto; or you actually travel overseas and found a company in a jurisdiction that's…

The issue is, the upside is so large that it's not a small thing.  This is actually a life-changing thing.  So that's why you do have people circumventing it in ways legal and illegal, people flouting it; and that, actually, over a long time, breeds disrespect for the law.  And so essentially, as I mention in this post, the follow-up post, How India Legalises Crypto, there are essentially three ways in which you can't really ban crypto. 

The first is technically, it's not like demonetisation; you can't just set the price to zero; you can't seize all the private keys, because you'd have to degauss every device, you'd have to find every laptop.  Finding 12 words on a billion laptops; that's not easy, they could be pieces of paper.  So, it's something which you really just can't delete it, and people can speak 12 words -- I mean, not just 12 words, but the digital signature, or they can broadcast a transaction, in theory, over the phone, by just reading out bytes and someone could do it somewhere else. 

I'm not saying these won't inhibit it, but you'd have to really lock down the country pretty aggressively, very aggressively, stopping emigration and immigration, stopping any form of communication, stopping satellites; basically grinding the economy to a halt to find these needle-in-a-haystack crypto transactions, let alone holders.  So, technically they can't ban in.

Socially they can't ban it, because there are now 100 million crypto users, and they're disproportionately enriched among tech people, finance people, early adopters.  You're seeing a lot of celebrities, athletes, entertainers, and it's just hard to demonise because it's not a person.  Satoshi did this amazing thing where he just vanished.  So, all the normal character attacks, character assassinations, all the stuff they're set to do, it might as well be COVID.

The thing about COVID, I mentioned this a while ago, is all the normal weapons the US uses, they can't bomb COVID, they can't regulate it, they can't freeze its accounts, they can't demonise it in the press; it's just something where all the normal tools that the US uses on something, just this is immune to that.  Bitcoin is actually similar; Bitcoin itself.  Not all the people holding it, you can attack them; but Bitcoin itself, the protocol, it can't be hit by those measures.  It can be retarded in some ways, but it's just too strong, I think, at this point.  But, we'll see.

It is possible -- I mentioned the firewall attack; did I mention the firewall attack?

Peter McCormack: No.

Balaji Srinivasan: So, people talk about a mining attack on crypto.  I think more likely -- a mining attack is straightforward.  It's kind of like seeing a big bodybuilder and going up to him and just punching him, right.  That's the thing he's prepared for.  Maybe you can do it if you're also a bodybuilder, but it's the obvious attack.  So, mining seems like it wouldn't be a smart attack.

The alternative would be, the Chinese basically use a great firewall to just try to block Bitcoin-related packets.  We don't know how good they'd be at that if they really tried, but if you did the predator prey: step 1, the Chinese block, or the state really I should say, the CCP, blocks Port A333.  Then the Bitcoin developers do port randomisation.  Then the Chinese do deep packet inspection to figure out, okay -- or, they just look at the source code and they just look at all the ports that were chosen.

So then, the Bitcoin developers do tunnelling, they send Bitcoin traffic over something else, like a SAGE.  Then the Chinese try to do deep packet inspection, or some kind of AI packet sniffing, on all packets to figure out which ones of those are crypto-related; and there'll probably be certain patterns of those that look like that, and they'll try to interrupt those and then impose penalties on the people for running them.  And, that's like a cat and mouse, back and forth, where it's not obvious to me.  I'd have to really study the networking to figure out what happens there.

But, in the worst case scenario, what happens is you have a peekaboo problem, where the transactions are happening in the rest of the world, but mining is still disproportionately in China; so, the chain gets extended in China, but it can't synchronize quickly enough with the rest of the world, because there are these weird, patchy firewall issues.  One of the things that Bitcoin protocol assumes is a global internet, that nodes can reach other nodes; that is an assumption. 

If you have significant partitions, especially persistent partitions in the network, where some nodes cannot synchronize with other nodes, especially mining nodes cannot synchronize with other mining nodes quickly enough; if that is the case, due to nation states and the firewall and so on, you need something which is a partition-tolerant consensus algorithm that can tolerate large durations of time, where some of the network cannot see the other network. 

Because, what would happen right now is, you would have two chain extensions, one in China and one in the rest of the world.  The one in the rest of the world would have transactions; the one in China would not, they'd only have the Chinese transactions.  And, whenever they synchronized up, you'd have a chain reorg, where all the blocks from the rest of the world were thrown away and the Chinese chain was number one.

Now, you might be able to tolerate this by just radically increasing the number of blocks that you require, from 6 to like, 50 or 100, or whatever; whatever the period would be for the chain synchronization to happen.  That might be one where you work around it.  And what that does is it means that finality for Bitcoin transactions goes up from an average of 6 blocks to 60 blocks or 600, or whatever it is, for them to finally synchronize up.  So, that's a hack-ish way to deal with it; it's better than nothing; it's not great.

So that's the firewall-based attack on it, which I think is the most likely technical attack from the Chinese side.  On the US side, I don't think the US is competent to do anything technically.  It can't send cheques to people in the mail, so the US Government -- people have this vision, from Marvel superhero movies and all these Hollywood moves, that the US Government has all these superpowers and stuff, and that was the 1950s US Government, which could do the Manhattan project, or 1968, that could Apollo.  And even 1980s, the US could do some things.  But, it's in such sharp decline that it couldn't even stand up healthcare.gov in 2012, and that was nine years ago.

So, you're seeing it with the power outages, you're seeing it with the failure of public health and public schools and fire and police and local, state and Federal governments versus corona; you're seeing it with all this other stuff.  So, the US Government is unable, in my view, to launch a technical attack on it.  But what it can do is it can try to launch a regulatory attack, where it's just going and harassing people who are holders of it, or exchanges, or things like that.  That does have -- we'll see what happens, right.

Some of those kinds of acts, like this Very Stable Genius Act, has been proposed.  But, there's also a lot of protest against that.  If you saw the number of comments that were put on the kind of midnight bill that was put out right before Mnuchin left office, there were fairly harsh comments on thousands of them.  So, I think there will be pushback within the West on the regulatory attack, and I think it's TBD as to what will happen with the Chinese on the technical attack.

The only reason I say this is, I'm pretty sure cryptocurrency will win, I think Bitcoin will win; even if the current Bitcoin protocol doesn't win, the Bitcoin ledger will win, because it can be backed up and put onto -- it's like it can be rejuvenated and brought onto different bodies.  Anyway, let me pause there and get your thoughts, because that was a little bit of a digression.

Peter McCormack: Well, no, I'm with you.  Every attempt to ban Bitcoin, wherever it is, whoever's tried it, all it's ever done is increase the price in that territory; it's just created a premium.  It's not been effective; people will use it.

Balaji Srinivasan: Remember early 2017, when all this Chinese volume dropped off exchanges and everyone was like, "Oh, shoot, what's going to happen?" and it went from $1,000 to $20,000.  If China, the most competent, large, ruthless in some ways, state, if they can't ban it, because their scale, their technical sophistication, their ruthlessness when they're pursuing a goal; when they threw all of that at it and it 20Xd the price, that was a huge moment.  That was comparable, in my view, to the recovery from 2011 to 2012; that was a huge proof point.

Peter McCormack: Yeah, it just doesn't worry me.  I mean, the only thing that would worry me is like a coordinated, international ban.  That would be very bad.

Balaji Srinivasan: Do you know what; do you know the reason I think that's unlikely to happen is, what's the international coordination on anything?  We can't coordinate on COVID, on climate, on anything, right?  There's the Trade War.  If somebody says, "The sky is blue", someone else is going to say, "The sky is red", at this point.  So, I think that's unlikely, but of course it's a possibility.

I'm actually not as sanguine about no one will be able to ban it, or able to stop it technically or regulatorily; I think it's unlikely.  I enumerated a bunch of things here.  What I think I'm absolutely certain about is no one will be able to ban the idea of cryptocurrency; that will never go away; the concept is out there.

Peter McCormack: No, I'm with you.  So, look, we're talking about the negative side here; India's considering banning it, and why they couldn't.  But actually, there's a much more pro and positive way to approach this, that actually you just think they've got this completely wrong, and there's a solid number of reasons why they actually should adopt Bitcoin.  Should we work through those?

Balaji Srinivasan: Yes, absolutely, let's go through it.

Peter McCormack: Well so, I'm going to go via your article; but, let's go one at a time.  Let's start with national security.

Balaji Srinivasan: Yeah.  So, national security, so basically any country that is not the US or China wants to hold Bitcoin and more generally, wants to build a lot of native skills in crypto, because it doesn't want to be deplatformed from the international financial system, or from communication systems; and, this is a real concern.  If you saw Macron and you saw AMLO of Mexico and your saw Merkel, all these people were shocked that a sitting Head of State could be deplatformed by a tech company in the absence of a court order or anything like that, just a decision by a tech CEO. 

And again, whether or not you think that decision was legitimate, it's sort of like you might see a bad guy who is captured by police, or shot by police in a really brutal way, and you might be like, "Yeah, they got this bad guy, but I really don't like that process that was used, because that's not rule of law; that's something where they'll get away with it today because that's a bad guy, but tomorrow it might be a somewhat less bad guy", so it's an obvious argument.

Peter McCormack: I mean, it's the same with the Trump ban on Twitter, right?  A lot of people don't like Trump; they didn't think he should have been deplatformed?

Balaji Srinivasan: That's who I mean; that's who I'm referring to.  So basically, whatever their feelings on Trump, it was the process that was followed that was so basically instant.  There was obviously a huge lead-up to it.  You could see it coming, with the banners and stuff.  But just crossing that Rubicon and having a sitting president with 88 million followers deplatformed, and then following it with Parler, getting pulled from Amazon and Google and Apple and Facebook and whatever at the same time, that was kind of like, "Woah!"  It was quite a moment.

And, all these countries have realised, "Actually, you know what; we can be demonised like that too".  2019, Brazil, there was this fake photo of Brazilian fires that went viral.  Macron tweeted it, it was printed in NYT, and it was fake, because it was taken by a photographer who had passed away in 2003.  There was a guy in the Atlantic who actually wanted to use that to justify war on Brazil.  I mean, people are excitable now; they're just cray. 

There's truly false information that's really agitating spreads, and it's like sugar.  Humans are simply not evolved to deal with this much sugary stuff around, and restaurants spike your food with sugar, because it is advantageous to their business model.  It's something which trades off your health to make the food tastier and to bring you back and to charge higher prices.  And, I understand why they do it, because they've got to make a living.

But what happens is, you pay the price and society pays the price in diabetes for that $10 Big Mac, or whatever the price is; the fried nuggets, and so on.  You have diabetes and whatever that costs you way more than $10, right?  What used to be the case is, you used to have home-cooked food, where it may not have been as tasty, there may not have been as much variety so you didn't eat as much, and your family would essentially internalise the cost about the food and whatever healthcare food you had.  And so, there was a degree of check on both parts.  Even if you just talk about the alignment of economic interests, forget about the love that they'd have for you, which is also obviously very important.  But just there, you've got the same entity that's doing both. 

So, what's the analogy; what's the point?  The point is that all of these outlets, all these individuals, frankly, everybody has found that you can just strip context, add exclamation marks, just like the equivalent of sugar; you just juice your tweet with the most inflammatory words, and there's no penalty.  It just goes -- you're just in that war every day for attention; this is the most surprising and crazy thing.  And, a nation can easily, easily just get killed by something like this, as we saw with the Brazil thing; and so, the smart ones are starting to realise that this is actually the real theatre of cyber war.

Everybody has thought that cyber war was about, "Oh, they're going to hack my electrical grid.  Oh, they're going to hack my power plants and stuff", and you know what?  That's a threat also, don't get me wrong; that is, right.  But, it's also the much more in-your-face version, which is they just deplatform you from communication channels; they shut off your transaction capability; and they do so by attacking your reputation beforehand, so your bad guy, your Saddam and you've got the WMDs, even if you don't have them; and you know what?  If the US invades you and breaks all your stuff and whatever, then later in 2007, Mayor Bush did the White House Correspondence Dinner where he's like, "Where are the WMDs?  I don't find them; I don't see them here" and made a joke out of this thing, after the country had been invaded and the entire thing's been termed as a free-fire zone, you know; it's kind of crazy right; it's like, "Oops"!

Peter McCormack: Okay, so the next thing that's kind of interesting that really didn't cross my mind, but when you were explaining that, essentially because of Bitcoin, there's going to be a number of ultra-wealthy people created, beyond what we've known, and very quickly.  And, they're going to want to deploy capital.  But, if India bans Bitcoin, they're going to prevent the deployment of that capital in the country?

Balaji Srinivasan: Exactly right.  So, what happens is, the flippening, the billionaire filppening, is coming.  And, depending on the number -- I actually have a post of this where I just kind of called it out separately on my site -- you can make assumptions and it's a very broad range; but, somewhere between $100,000 and $1 million per Bitcoin, probably half the world's billionaires come from crypto.  That's remarkable.  There are a lot of assumptions that go into that; you can argue with all of them, but let's at least say, a very good chunk of the world's billionaires likely come from crypto. 

That's this incredible, rapid, global transfer of wealth to people who are rational technologists generally, but made big, large bets against the establishment.  The more you had, the earlier and stronger you bet against the US establishment; and that's really interesting, because these are folks who still are -- it's this, as I said, thesis into the synthesis.  There are people who are still western enough to believe in free speech and free markets, in fact arguably the real West, and yet are like the new western elite. 

So, those folks who are global investors, any country that bans crypto is saying, "Let me ban a big chunk of global investors; let me ban a big chunk of global entrepreneurs.  In fact, let me force out some of the smartest and earliest adopters in my country, who are technologists and financiers, who saw this thing coming and put in some money".  And, maybe the tech people saw it earlier and the financiers had more money to put in, or whatever; it's a combination of the two.

But, that's not a good thing for a country, especially a country like India, which is rising.  I mean, no country's really rich enough to be able to turn down a $1 trillion opportunity.  You might think you are, but it compounds, and there just aren't too many of those.  There are very few things that are $1 trillion and growing like crypto is.  Actually, there's nothing, other than the internet itself, that I can think of, as a unitary thing.

So, yeah, people have this concept of, "Oh, crypto will cause capital flight"; actually, the crypto ban is what causes capital flight.  And conversely, crypto legalisation causes capital landing.

Peter McCormack: Well, you'd be a potential investor.

Balaji Srinivasan: That's right, yeah, exactly.

Peter McCormack: Blocking you, man; you've got a strong background in this!  I think the next interesting area to talk about is also the strengthening monetary policy, which you talked about earlier, because you actually mentioned the fact.  So, what was the price you made the recommendation at?

Balaji Srinivasan: What was the price?  I'll tell you, actually, I mean it's moving so --

Peter McCormack: Was it the date of the article?

Balaji Srinivasan: Yeah, it's the date of the article; let's call it that.  So, that was February.  It's an eternity ago, it was probably $30,000 or something.  4 February, so two weeks ago.  And so, Bitcoin, coin market cap…

Peter McCormack: So we were at $37,000.

Balaji Srinivasan: Yeah, okay, so it would have made --

Peter McCormack: 20% is that?

Balaji Srinivasan: 20%, so it will have made more than that, because --

Peter McCormack: Yeah, about 30%.

Balaji Srinivasan: Yeah, so let's say, I mean it's actually kind of crazy, yeah.

Peter McCormack: They'd have made $1 billion!

Balaji Srinivasan: The graph is crazy, but it's also completely expected.  We knew this was going to happen.  About six months after the halving, everything goes vertical.  4 February, it was $37,000.  So, yes, had they put in $3 billion to Bitcoin then, they would have had $4 billion a few weeks later.

Peter McCormack: But actually, probably more.  Because, if they had have declared it, the price would be way above that, yeah.

Balaji Srinivasan: Oh, the price would have gone even further, that's right.

Peter McCormack: But, let's talk about this, because you talk about India's love affair with gold, and I saw it.  I went to India a few years ago, I had an amazing trip.  I went to Mumbai and then down to Goa and, when I was in Goa, I took a motorbike up to the little local town and there were just gold shops everywhere, I just couldn't believe it; it was amazing.  It just blew my mind.  Somebody was explaining to me, tell me if this is true; someone was explaining to me, what it is, it's a store of wealth.  The jewellery itself is storing wealth, and it's a way of handing down wealth; is that correct?

Balaji Srinivasan: Yes, absolutely, because India gets it.  For better or for worse, India is something where folks don't have -- the state has not always been functional in India.  The recent Indian state is actually way, way, way better than it's been in a long time.  And so because of that, India, for a long time, has essentially been libertarian in that sense, practically libertarian.  Emigration abroad; buy gold; have hard skills in engineering or medicine; a lot of this is a big part of Indian culture.  The firearms bit is different!  American libertarian culture has that piece, right, but there are some significant overlaps.

So, the gold thing is huge for Indians for all those same reasons exactly.  It is something that's both attire and it's part of our culture, but it's also a store of wealth where, in tough times, bite on some gold and you might be able to use that and that kind of gets a family out of a tough spot.

Peter McCormack: So in some ways, Bitcoin is natural, especially because the state holds a lot of gold as well, right; how much gold does the state hold?

Balaji Srinivasan: I think about 30 tons, or thereabouts.  Actually, was it 30 tons?  It was like $30 billion; maybe 600 tons' worth.  Yeah, about 600 tons.

Peter McCormack: Yeah, $30 billion, so 10X on the $3 billion that would cross it.  So, Bitcoin hitting about £370,000 would happen and then, yeah, interesting. 

So, in terms of the monetary policy though, does it not come with any risk in that, the price of gold is quite stable; is it quite risky for a nation state to adopt Bitcoin and then see its net reserves drop, if there is some kind of bear market after they do it?

Balaji Srinivasan: Well, yeah, of course there's risk.  It's something that is a volatile cryptocurrency, but that's what international relations is.  Every decision you're making at that scale has risk.  We are definitely moving into a time when the world's just, I mean this is a cliché, but it is becoming more volatile.  The post-war order does not hold anymore.  The relative stability of roughly 1991 to 2016 is just no longer operative; everybody's straining at the seams.  So, the thing is that the biggest risk is not taking lots of small risks.

Peter McCormack: Right, okay.  So, it's risky not to adopt Bitcoin because, if it becomes a standard across other countries, you don't want to be the last person to buy Bitcoin?

Balaji Srinivasan: Yeah.  I mean, cryptocurrency as a concept is not going to vanish from this earth.  It's like saying networking is going to vanish.  This is a breakthrough in computer science; this is a breakthrough in cryptography and distributed systems and a bunch of things.  It's at $1 trillion; it's got 100 million users; it's not something that's going to go away.  So, of course you can basically say, this is forbidden, or whatever, and then bury your head in the sand culturally and lose a generation of technology, sort of like North Korea, or whatever; but, that wouldn't be smart.

You want to say, okay, this is happening, the world is adopting it, there are clearly some benefits here; it's like Bezos' thing.  He's like, "We've taken some bets that have been huge bets, vaporised hundreds of millions of dollars, like Kindle Fire, or whatever.  But, if you don't take those bets, you don't have the Kindle, you don't have AWS".

Peter McCormack: Right.

Balaji Srinivasan: Bet the company bet is like the bet the country bet; it means that you've put yourself in a situation like you're betting it all on black, in the sense of a roulette wheel, "Oh, this had better make it".  And this means that excessive risk aversion is extremely risky.

You know what it's like; it's like the guy who doesn't change jobs and is at the same company, and is at Microsoft, for example, forever and he's become a Microsoft lifer and he kind of sees open source rising, kind of ignores it, and he just knows everything about Windows APIs or whatever.  Until, one fine day, he's laid off.  And suddenly, his pay, he doesn't have the skills to have the same pay that he had at Microsoft, and his consumption has been at the level that was so high that he can't easily find a comparable thing and so, he suffers a pay cut.  He's 40-something, or whatever, and that's a serious issue for him, and he just feels like he's declined in life.

I'm not saying that's the only outcome.  I saw some folks go through that, and that comes from not constantly trying to reinvent yourself.  But, if you reinvent yourself every few years and you push yourself; I mean, it's hard of course, it's hard.  The older you get, it's hard.  I'm not saying it's easy, but if you don't do that, you are vulnerable to getting disrupted.  And, this is as true for countries.  And, the good thing is, India's in that hungry stage.  In its own way, it's hungry, in the same way that Estonia's hungry, or now Miami suddenly became hungry.

Peter McCormack: Well, this is back to your ascend and descending thing?

Balaji Srinivasan: That's right.  The thing is that the entire terminology of developed world and developing world is just no longer applicable.  I would much rather be in Bangalore than San Francisco.  First of all, huge parts of Bangalore are cleaner than San Francisco.  You can look.  You may not believe me; you have to go there.

Peter McCormack: Dude, I've been watching the decline of San Francisco for the 15 years I've been travelling there.  I like going to the Bay, I like going to Moreno County, but the city; no.

Balaji Srinivasan: Dude, it's actually insane, you know, and there's so much you could say about it, but it's 100% government caused.  It's basically all these people who've optimised for popularity over truth.  And, there's a bunch of voters who have gone along with them, and it's just something where these people -- it's like the cycle of civilisations, or something; everything just has an up and then a down.

It's hard for me to fully understand what is going through the heads of people who've made SF into what it is today.  But fundamentally, if you see them tweet or whatever, they just have fundamentally wrong premises; like, that housing is not governed by supply and demand; or that all the tech people can leave and it will just be fine; and screw them, it will just mean that prices decrease; or that it's okay to have people being randomly attacked on the streets and if you're against that, you're a bad person, or whatever.  These are just stupid ideas; they're just wrong.

Peter McCormack: Dude, let me tell you something, I'll tell you something funny.  So, on my last visit there, I had a proper Blade Runner moment in San Francisco.  So, a couple of visits previously, I didn't know about the Tenderloin, and I can't remember the name of the street I was staying on, but I got up, went for a run --

Balaji Srinivasan: Oh, you got a cheap hotel in the Tenderloin?!

Peter McCormack: No, I wasn't in the Tenderloin, no.  I was down near the shops, Union Street, is it Union Street?

Balaji Srinivasan: Union Square?

Peter McCormack: No, I don't know.  Anyway, I ended up going for a run and ended up in the Tenderloin and I was like, "What the fuck is this?!"  But the actual last visit, the weirdest thing happened.  In the same five minutes, I saw somebody getting yelled at by a homeless drug addict, and then a robot went past, one of these robots that go down the street.  And I was like, "What the fuck is going on here; I feel like I'm in Blade Runner?!"

Balaji Srinivasan: Have you seen the thing which is like robot coffee and there's a person who's passed out in front of it?

Peter McCormack: No?!

Balaji Srinivasan: Here's the problem with that, by the way.  The problem is that people will blame the farmer on the ladder.  They will see, "Oh, it's the tech guy that's caused this".  And like, how do the tech guys cause anything?  You have this guy from New Delhi and this guy from Shanghai and this guy from Nigeria and they are collaborating on something and they are just working in their apartments and typing on keys.  And it has absolutely nothing to do with public policy in the city; they can't even vote; they're not even citizens; and you're blaming them for the fact that these native-born Americans just screwed up everything.  It's the dumbest thing in the world.  And the thing is that other cities show that you can have technology without this craziness, right.

That's why I said I'm glad that San Francisco, in particular, is investing so heavily in the decentralisation of technology out of California, not in San Francisco.  They're really playing an amazing game.  And, what that does, it actually is good because, there's a good conversation we had back in December on Twitter on this, where folks were like, "We need to commit to the Bay".  Because, after years of saying, "Techies, get out, we hate you", etc, people are like, "Okay, we're going out in Miami, going out, going to Austin, going overseas, going to Israel, going to Singapore, going to Korea", etc.  My friend, David Lee, for example, just took a very senior job at Samsung.  A lot of Asians are going home.

Look, here's the thing, I have nothing against America, but it's nice to be part of a culture where people can pronounce my name and where I can speak my mother tongue.  I never do that on Twitter, because it's just not where my audience is, but that's important to me, you know.  It's like religion, or whatever.  You don't have to be publicly demonstrative about that; that's not what people are there for; fine, it's a private thing.  But, all else being equal, would you prefer a functional culture that is your own culture; absolutely.

It's like a British guy who enjoys the pub, or whatever.  If they don't have to go to Texas, they may not want to go to Texas, right.  It's like the small things, the creature comforts, if that makes any sense.  Go ahead.

Peter McCormack: Yeah, it does because, Balaji, I've built up this Bitcoin podcast, right.  It's given me opportunity and money and I can live anywhere pretty much that I want and I'm still here in Bedford because I love it here!

Balaji Srinivasan: Exactly!

Peter McCormack: I know the guy down the street.  I can go into town and I'll see five people I know.  I know my friends, I know the parks.  I won't be here forever, but I get that.

Balaji Srinivasan: That's right.  And, you and I are as internationalist as it comes in many ways.  I mean, we have friends from all over and so on and so forth.  But, the point basically being is that lots of folks gave up their home countries and their home cultures to come to SV, to come to Silicon Valley, to sacrifice and whatnot, and then get blamed for the 28-days-later scenario that they had absolutely nothing to do with.

Now they're like, "F that, I'm just going to go home, because the opportunities are greater in Asia".  The DS also makes it really hard to get visas, and it's got COVID, and all these power outages.  It's not even a first-world country, all the power's on in Korea; why am I dealing with this again?  Plus, of course, half the country isn't so fond of immigrants; the other half isn't so fond of founders or entrepreneurs.  So, the immigrant entrepreneur -- go ahead.

Peter McCormack: What about those people who have just left San Francisco to move to Austin and they've got no power?!

Balaji Srinivasan: Well, I told them.  I was like basically, once COVID was coming, it was something where I was like, you know, have you ever seen like Star Trek, or something like that, and there's a spaceship and it's moving at some speed and then it's got to go warp speed?

Peter McCormack: Yeah.

Balaji Srinivasan: COVID was similar.  It was like, "You know what?  You have Peter Thiel's thing about your ten-year plan to do it in six months".  I was like, the thing about Austin is I knew it was going to become like California and San Francisco, because the whole homeless thing came from San Francisco to Austin.  So, the bad governance was imported. 

It was a functional city, then one day they repealed the sit/stand ban so that now, someone had to basically actually attack you before you could say they shouldn't be lying in front of your store.  I mean, that's literally what it is.  You can't punish the act of sitting or standing, or you couldn't just call a police officer because someone has passed out in front of your hairdresser's door step.  They actually had to attack a passer-by, or it's roughly along those lines.

Peter McCormack: Something insane, yeah.

Balaji Srinivasan: It's insane, right?  And it's basically like, you know, the one place they exempted was City Hall, okay, of course.  And so, you had this thing where these small business owners, who are again often immigrants, often they're definitely not rich; in fact, they've got one of the hardest things where they've got a limited market, they'll trying to sell bagels to somebody, or whatever, at $10 and their foot traffic is impeded by this crazy guy in front.  They can't raise venture capital, they don't have the sophistication to do a web shop.

These guys are often very hand to mouth, and they're just getting crushed by this thing.  And of course, if you're a tech person, you can be like, "Okay, well I'm just going to go to the other shop.  I'm going to order Uber Eats and you push it off onto that.  So, for tech folks, it doesn't touch them as much.  It's true that it's unpleasant for everybody.

Anyway, point is, when I saw that I was like, okay, I knew that Austin was a few months to years behind SF's decay, when I saw that they had just followed them on this horrible policy.  And, the issue with that is you realise that there's something going on at the Mayor's office, or in that circle, which they have an incentive structure which is just completely different than the citizens and everybody who has to deal with the policy.  

It's fundamentally, I think, that we have not spent time making the moral argument, because it's the moral argument that is the foundation.  You need to be able to catch and meet the alternative moral argument, and actually win it in an arm wrestle.  And if the alternative, if it's phrased as, "We're good because we're so selfless that we will allow you to have a crazy person on your front door step", and when I say crazy, I actually mean a significant fraction of --

Peter McCormack: Dude, you've seen it.

Balaji Srinivasan: Yeah, they are actually literally mentally ill and they need treatment.  There was a video called, Seattle Is Dying, which actually showed something like 70% are mentally ill or on drugs and are violent, and so that's something that doesn't benefit anybody, including this person, to have them sleeping on the street.

Anyway, these are completely obvious points, yet to raise them, people would be able to try to score moral points, right.  And the issue is just that people need to develop the alternate moral language which is, for example, that women, gay people, minorities, etc, can't walk the streets of San Francisco safely; and that's like 80%, 90%.  Of course, neither can white guys, but it is actually true that all of those groups have a story that you're seeing these attacks on Asian Americans; certainly women are being attacked.  So then, you're talking about something where you've got an alternate moral language to discuss this issue.

Anyway, that's just one version of it; there are 15 different versions of ways you can come about it.  The point being that I'm very bearish on the US; not necessarily on the West broadly, because Australia and New Zealand actually did better than the US, and that's because it's leadership, but you know what I actually think it is; I think it's the peer group of being within the Asian time zone.

Peter McCormack: Yeah, true, but I mean just pretty firm leadership.  There's also somebody, did I read an article somewhere, where female-led nations handled COVID better with a female Prime Minister?

Balaji Srinivasan: I'm not sure that that actually holds up.  I think if you look at the graph -- because Jacinda Ardern, sure, she did a good job; but the thing is, if you look at New Zealand or Australia, Australia was run by a man during this; New Zealand's Progressive, Australia's Conservative; but, they both did a pretty good job on COVID.  Now, you can say, "Oh, they're island countries", but so it the UK and it didn't really do that great; neither did Hawaii.

Peter McCormack: Well, we're slightly different in that we're also a hub country.  They're island countries in the middle of nowhere.  We're a hub country where it's a final refuelling stop before going over to South America or America.

Balaji Srinivasan: Fair, but basically, the thing is that there's been a big switch, which I saw during COVID, which is really interesting, where people went from chest-thumping, "America, F yeah!  America's number one!"  "We're number one too!"  "Yeah, we're not number one, but how can you expect us to be number one.  This is small countries and they're islands and they're this and they're that.  Yeah, we're number 17, but we're not the worst, dude!"  We're not the worst, is so different from, we're the best, you know what I mean?  It's just not the same thing at all.

If you do the graph of COVID, roughly speaking, it's Democratic Asia and Australasia that I think should be the model for the world.  So, factor out China.  I think China did do a good job on COVID at the end of the day from a results standpoint.  You know, you'll say, "Oh, you trust Chinese stats?" and so on.  It's not that I trust Chinese stats; it's just that I've seen enough triangulated reports that it looks like they weathered the storm overall.

But, if you don't believe that, if you look at Japan, South Korea, Singapore, Taiwan, Hong Kong; I know Hong Kong's now more part of China, but Thailand, Australia, New Zealand.  Democratic Asia and Australasia, Australasia being Australia and New Zealand, has I think done the best overall, and that's where the camera is shifting of the world economy.

Peter McCormack: We've gone on a bit of a tangent here, but I do want to ask you something, because I read it on the news the other day, that India's had a sudden drop in COVID numbers and they don't know why; have you seen this?

Balaji Srinivasan: Yeah, I did see this.  And, I mean look, COVID is something where there's been drops and then surges and all this type of stuff, and it's very premature to declare victory; but it's possible that roughly speaking, they've done about 8X to 10X better than the US has, on a per-population basis.  I don't know why.  It could be that they've got a younger population, it could be that they have less diabetes; there are various things like that that people postulate, right.  So, I don't know the answer.

In terms of to truly know what you'd want to do, like several surveys where you're looking at antigens, you're looking at what antibodies people have to different things and seeing if "herd immunity" actually did happen, or whether cross-immunity actually manifested where infection with some other coronavirus strain gave you immunity, I don't know.  There were some studies on cross-immunity prior to the current epidemic and it didn't seem like it worked, but maybe.

So, it's early to declare victory, because Europe is also like, "Yeah, we did such a good job", or whatever, in the summer, and then they went -- was it Europe?  I forget who.  Someone was saying they did such a good job and it looked like it was low, then it kind of just surged back up again.  So, we'll see what happens.

Peter McCormack: All right, well listen, look, we've gone on a massive tangent here, we've gone off track!  But, I'm conscious it's late and we've been recording for ages now, so let's close it out.  Listen, do your closing-out case for India, or any nation state, to buy Bitcoin, why they should do it, why they should adopt it.  I know your story's more broad crypto, my show's Bitcoin, so I'd rather keep to the Bitcoin for now.

Balaji Srinivasan: Sure, okay.

Peter McCormack: But let's have the closing argument: India should buy Bitcoin and why?

Balaji Srinivasan: All right, so why should India buy Bitcoin; why should everyone country that is not the US or China buy Bitcoin?  First: it's a trillion-dollar industry, crypto's a trillion-dollar industry, so you want that to be in your country.  Simply from an economic standpoint, this is like the financial internet; you want it to be there.

Second: it means that your country can't be deplatformed.  So, even if PayPal, or what have you, turns you off, you can still settle internationally, both at the individual level and then at the country level or company level, SWIFT, or what have you.  You can use cryptocurrency instead; it prevents financial deplatforming, which is a bigger and bigger thing, given that you've seen the Twitter deplatforming of Trump, for example.

Third: it brings capital to India.  There are all these Bitcoin millionaires and billionaires, all these tech CEOs, all these tech companies, as well as traditional companies, financial institutions, that have bought crypto and held it; and you want those people to be able to invest in India.

Fourth: remittance is remote, so crypto enables a remote economy.  All these Indians are online; all these jobs can now be done remotely; India's a world leader in business process outsourcing and in remittances; cryptocurrencies work across borders.  You put those together and crypto will result in this huge boom of remote work in remittances, with people being able to pay Indians for providing remote work, and to send money back into the country.

Fifth: strengthening the monetary policy rather than weakening the monetary policy.  Just like you have hundreds of tons of gold in an emergency situation to back your fiat currency, all the central banks do; for the same reason, you want to have digital gold as a rainy-day fund in the event that that happens.  And so, for the same reason you have gold, you want digital gold.  Gold is not a threat to India; gold is an asset for India; and similarly, digital gold is not a threat, it's an asset.

Sixth: mathematically provable accounting.  So, many people don't know this, but the Big Four accounting firms use the Bitcoin blockchain and other blockchains as gold standards of truth when they're auditing firms that engage in crypto transactions.  The reason is because the blockchain gives corroborating information, it gives a third entry; not just your debit and another company's credit when you do a payment, but a third entry in this blockchain, this neutral thing, which is cryptographically verifiable; it's immutable; it's got this history; and so, you can have a record of who paid who.  Even if you have an internal bug, you can reconcile that to on chain.

That's a game-changer, because it allows all kinds of accounting to be automated.  You're no longer just relying on the company's books.  The more stuff that's on chain, the more you can automate.  This is a big deal, because you cannot just do audits, you can do novel things like proof of reserve, right, to continuously certify that you have the needed assets on hand.

Then, number seven: crypto is the financial internet.  All of these things, from derivatives to lending to various kinds of services, all these things are being built on crypto and you just want to have that domain knowledge within your country, otherwise it's like the Soviet Union, which bans finance for a long time and everybody has to learn capitalism from scratch; you need to have that knowledge of the financial internet, and you want that within your country.

Then, point number eight: crypto is like the open-source alternative to foreign corporations.  Many governments, including the Indian Government, encourage the use of open-source or proprietary code.  There's a quote, "The Government of India shall endeavour to adopt open-source software in all e-Governance systems implemented by various government organisations, as a preferred option in comparison to closed-source software". 

So, crypto APIs are preferable to corporate APIs for exactly the same reason, because the blockchains aren't just open-source, they're also open execution.  You prefer Bitcoin to PayPal, because you can see the source code, you can look at the database, and you can replay every action executed, and that's very different from a centralised service.

Okay, ninth: from a software perspective, India's number three.  It's not America, it's not China, it can't wrestle countries outside of its borders into doing things; it has to convince them.  And, it's in its interest to back neutral crypto platforms for the same reason that everybody who wasn't Microsoft or Apple, who didn't have Windows or OSX, they backed Linux; the same reason everybody who's not America or China, or doesn't have the dollar or the renminbi, they want to back crypto and Bitcoin.  And that's something where, by using crypto protocols, they're a successor to the rules-based international order that the US is now abandoning.

The so-called Non-Aligned Movement, the third world of the last Cold War, which came in third place, could come in first place in this Cold War as a decentralised movement, which opts out of trade war and opts into trade in peace.  And, India's already been embracing the Non-Aligned Movement as this balancing role in the coming US versus China Cold War; and cryptocurrencies give an intellectual framework to economically align very disparate nations like Brazil or France and India.

Then: digital internationalism.  Basically, nationalism is fine within your country, but Indian nationalism is not appealing to a Brazilian or a Hungarian or something like that.  So, if you're doing foreign trade, nationalism is fine for home, but you have to have something which is a neutral thing for working with people abroad, and that's another reason that crypto platforms are pretty important.

So, in terms of my recommendations, I recommend (1) creating a digital rupee backed by digital gold, so just like you've got 30 tons or 600 tons of gold, buy a few billion dollars of Bitcoin, a digital gold alongside your gold; (2) add crypto to India Stack to add on-chain accounting in a stock chain, basically have much of the country's financial system on chain by 2030.  You know, to cryptographically approve all financial statements, you could have a lot more foreign investment flow into the country, including Bitcoin investment.  That's related to point number (3) using the legislation passed by Singapore, Wyoming, Dubai; create a crypto-friendly regulatory regime to attract billions of capital to India; (4) encourage development of decentralised protocols so that you can build things that can be trusted by any country, because they don't require trust; and (5) help other nations with crypto, so either they can use directly the APIs India's built, or they can fork it and use it on their own. 

This is very similar to, for example, the US training military advisors around the world, or China going and building a physical infrastructure in various countries; India can help countries build software infrastructure and they can say, "Look, this is good enough.  India Stack, the crypto India Stack, it was good enough for 1 billion Indians, so it will probably be big enough and good enough for your country; you just need to retro fit it and it will work for your small 30-million person country, or what have you", and that's the idea.

Peter McCormack: Can you get in there and talk to them, consult, be an advisor?

Balaji Srinivasan: I just gave a talk actually yesterday to Nascom, which is awesome actually; it's as if TechCrunch Disrupt was run by the Indian Government, you know.  So it's this completely different world, Peter.  It's like this alternate universe, where the government and media and tech are on the same side and everybody speaks English.  It's really -- just think about that.  How different is that from the western experience, right?  And that's why I think, with all these hundreds of millions of Indians online, I think we're going to see a new force that people don't get, that the bright sun has the opposite of the west's black mirror.

You have something where all of the global south has risen with tech.  They've seen their living standards.  You cannot be cynical about a smartphone that corresponds to an increase of 5X in your annual income over the last 10 or 15 years, right; that's a skyhook; that's opportunity; as distinct from, in the west where that is corresponded with people descending into political infighting or seeing their jobs disappear if they're in traditional media.  So, there's a very different culture there.

I encourage everybody on your podcast, for example, to watch the Indian movie, Super 30.  Even just watch the trailer online.  And, you watch that movie and you'll be like, the difference between that versus Black Mirror is the difference between the bright sun and black mirror.

Peter McCormack: Oh, I'll definitely have to check that out then.  I love India, honestly.  I had such a good time there.  I'm not a spiritual person, but something felt a little bit different when I was in India, and I couldn't put my finger on it, I couldn't explain what it was; but, I felt at a lot of peace when I was in the country, and I'd love to go back.  I'd say it's one of my top five, maybe three, places I've visited.  It's crazy as well!

Balaji Srinivasan: It's crazy in its own way.

Peter McCormack: It's fucking insane!

Balaji Srinivasan: But, the creature comforts have really improved.  You can live a pretty -- it's silly to put it this way, but the things you might look for, like the Starbucks, or whatever food you want, you basically have it there.

Peter McCormack: Yeah, but that was the thing; I didn't want that shit.  When I went out to Goa, I was in one of those things on the beach where it was like a hut, and I had no creature comforts and I loved it. 

Balaji Srinivasan: Fine.  But let's just say, in the event that this is important to you, that's there now.  And internet is there; fast connectivity is there; and mobile phones are there; all the stuff is there.  And, that helps a lot, because it actually feels like okay, it's almost like the alternate universe.  It's said, like the declining world and the ascending world, it feels like the ascending world.

Now, I'm not sanguine about it.  I think that it's almost like rebooting back to 2007 and seeing the bad outcome, and now it's like Day After Tomorrow, or Groundhog Day, where we can avert the bad outcome and get the good outcome, hopefully; steer India in a good direction, a positive direction.  We'll see; let's hope we can do that.

Peter McCormack: Fingers crossed, man.  Well listen, love talking to you, Balaji.  Every time I talk to you, we could talk for hours.  We've gone down a number of rabbit holes here, but love it, man.  It's late for you so I'm going to bid you well, thank you for your time, as ever.  As I said, this topic, I'm really interested in and anyone listening, you've got to read the article -- well, I'll put both articles now, because I'm going to have to read the second one; I'll put both of them in the show notes, by Balaji.  Go and check them out.  But, appreciate you, brother, and stay safe.

Balaji Srinivasan: Awesome. Thank you, Peter, talk soon.