WBD356 Audio Transcription

Eric Weinstein on Bitcoin

Interview date: Wednesday 2nd June

Note: the following is a transcription of my interview with Eric Weinstein. 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 Bitcoin maximalism & toxicity, Elon Musk and whether Bitcoin fixes everything. My friend Travis Kling joins me as co-host for this episode.

“I feel like the bitcoin community is one of the best communities to take on the future… we’ve got rich, smart, heterodox, idealistic, iconoclastic pirates. OK, what are we doing?”

— Eric Weinstein

Interview Transcription

Peter McCormack: Eric, welcome.

Eric Weinstein: Peter, thank you.

Peter McCormack: Thank you for coming to do this.  You're the hardest person to schedule in the world, but we got here.

Eric Weinstein: Well, I appreciate you being patient with me, forgive me.

Peter McCormack: No, it's all forgiven.  Thanks for doing this.  We're joined by my friend, Travis.  I've made a few podcasts with Travis.  I tend to be better at asking the questions, but when we get into a bit of a discussion about deeper topics, Travis here is the expert I asked to join us.

Eric Weinstein: He's the muscle.

Peter McCormack: He's the muscle, he's the weight, he's the brain!  Where do we start?

Travis Kling: There's no chance I'm the brain at this table.

Peter McCormack: Well, there's no chance I'm the brain!  So, you've been going down the Bitcoin rabbit hole for around -- I know you've been in a long time.

Eric Weinstein: Well, I found out about it, I think, in 2010 from Jordan Greenhall, now Jordan Hall, and I was astounded.

Peter McCormack: But, you've been a little bit more public about it recently.  I care about your recent experience.

Eric Weinstein: Sure.  Well, okay, in 2010 I wrote this essay, called Go Virtual, Young Man, about decamping into the electron layer, the idea that we should leave our physical personas behind and we should realise that more and more things -- it was in part built on the idea that the double-spend problem in crypto is effectively a conservation problem in the physical world.  So, how is it that my gold isn't your gold until it changes custodianship?

So, the fact that that problem was soluble at a distributed level took me completely by surprise; did not see the technology, did not understand that it was imminent.  And when I found out about it, my thought about it back then wasn't as money, it was, "Oh my gosh, someone has figured out how to port the constraints of the physical world into the digital layer".  Therefore, we can set about rebuilding everything that we know to be possible, because the physical world is a proof that what we see in front of us, bottles, glasses, microphones are real.

So, the idea that you could take physical law, come up with a digital form of it and then, have that govern a system so that you can't create, you can't counterfeit, you can't have a central bank come in and execute a seigniorage play against your currency, all of those things had me in mind of how do we decamp the world of the physical and move into the world of data, of bits, of electrons, rather than the world of atoms.

Only recently did I come into contact with the Bitcoin universe by mumbling, or I guess I also had Vitalik of Ethereum fame on my podcast, and many bitcoiners responded to that in a way that I had not sort of understood which was, "How dare you talk to charlatans and scoundrels!"

Peter McCormack: How dare you?!

Eric Weinstein: How dare you?

Peter McCormack: I was one of those.

Eric Weinstein: Were you?

Peter McCormack: Yeah.

Eric Weinstein: Tell me about that.

Peter McCormack: I can't remember what I put.  I think I probably put something like, "Why are you talking to a scammer?"

Eric Weinstein: Really?

Peter McCormack: Yeah, something like that.  I don't know, I'd have to go and dig it out.

Eric Weinstein: That doesn't seem very nice, Peter!

Peter McCormack: Well, we're not very nice people sometimes.  We are, actually; bitcoiners are really nice people.

Eric Weinstein: I can't figure it out, because you guys do seem to be weirdly idealistic and decent, but somehow you appreciate the aesthetic of being a dick!

Peter McCormack: Yeah!

Travis Kling: It's like your body's own defence system against getting sick.  You get food poisoning and you're just vilely ill afterwards, coming out of both ends; you wouldn't wish it on your worst enemy, right; and that's your body repelling this thing that it deems to be dangerous to it.  And I think for the OG bitcoiners that have been around since the 2012 cycle, or whatever, I think they've seen -- and that's not me, but I know these guys and I've studied the history of Bitcoin and the various alt cycles that we've done previously.

They've seen so much of it come and go and just wave after wave of things that promised to do something, but then not actually deliver on it, that I think the collective OG bitcoiner community, and then the new bitcoiners that have added on to that, have adopted this stance that is commonly referred to as maximalism, which is the refusal to even entertain that maybe there could be something else out there worthwhile.

Eric Weinstein: Yeah.

Peter McCormack: But also, we're very protective over this Bitcoin thing, because it's a project that's taken 30 years to exist.  The previous projects by cypherpunks to try and build this form of digital money, which many failed, and finally we have one that's worked and it is working.

Eric Weinstein: It's worth fighting for?

Peter McCormack: It's worth fighting for.  And, the way people explained it to me, because very early on, I made shows about toxicity saying, "You're going to need to be nicer; you need to be welcoming people in".

Eric Weinstein: I didn't say that.

Peter McCormack: No, I did.  Lex Fridman did.

Eric Weinstein: But I want to be very clear that that's the kumbaya love perspective.  I probably have a different perspective.

Peter McCormack: Well, I think what it is is, once you've been in for a while and like Travis said, you hear the same bullshit over and over again, but once you have your material amount of net wealth in there, you want to protect it; it has to be hard to change.

Eric Weinstein: But, that's talking your book.  If the issue is that my net worth is in this object and now the idea is that that object is susceptible to going down or going up, depending upon how feel about it, I have to ensure that people feel about this in a way that's coincident with my financial goals.

Peter McCormack: No, that's a different point.  So, forget the financial goals.  We've had all this stuff with Elon recently and plenty of us have said, "Fuck off.  Sell your Bitcoin; we don't want you here.  If you're going to cause issues, we'll take the net loss.  We're in this for the long term; this is a multi-year project for us".  It's more about people coming in trying to centralise the project or trying to influence narratives in a new way.

You've seen the meme, "I just discovered Bitcoin.  I'm here to fix it", that kind of thing, and also trying to defend against the basic principles of what we're trying to achieve here, which is just decentralised money and very simple properties: 21 million coins -- I mean, Bitcoin has to do three things: it has to secure 21 million coins; it has to issue new coins in the process; and it has to allow for censorship-resistant payments.  Just protecting that is why people can get quite rabid and I think it's kind of interesting. 

I took a long time to get my head around it, because I think what it comes down to is this idea of learning in public, right; and learning in public when you've got 500 followers is different from 500,000 followers.

Eric Weinstein: That's true, but I don't think that's where I have my differences with you all.  In other words, I understand the idea that this is something worth protecting to you; I understand that this is something that is constantly under attack; it's under attack by people who don't even understand that they're attacking it. 

Let's say that we go through all of this, okay.  Maybe you have to pass some sort of a written number two pencil bubble quiz.  Assuming that I get most of the answers right.  At that point, what I understand of it, is that this system has a bolt-on culture that is necessary potentially in order to get it to function.  It may be that Bitcoin maximalism is a necessary part of Bitcoin for Bitcoin to work; so, assume that that's true.  In which case, it isn't just the protocol from the whitepaper, or whatever; it's in fact a composite.

It's like, in Judaism, you have written Torah and you have oral Torah; so in a weird way, the culture of Bitcoin is one that is highly idealistic in its interior very often, it's not homogenous, many different kinds of people live in this ecosystem, but then the crust of it is extremely unpleasant.  And the idea that you have to have that kind of a dichotomy present between an idealism, because you're trying to do something different, and an armed wing, let's think of it as the armed wing of the bitcoiners, right; that's a known way of dividing things.  Like Hamas, for example, does a lot of social services in Gaza with hospitals and schools and the like, and they also do firing of rockets. 

So, it's very common to have some sort of idealistic thing coupled to some very aggressive military thing; and I don't see Bitcoin as particularly distinguished in that regard.  And it's sad to me in part that the architecture of the coin isn't better so that the culture of the bitcoiners can be less focussed on this issue of attack.  And of course, this was one of the problems to begin with which was, "What are we going to do if this technology works?  Anyone can create a coin.  And if anyone can create a coin, now we have a new problem which is, we've never had more than a handful of really important currencies before".

So, if you think about, for example, in fiat space, what are the really important liquid currencies?  You've got USD, UR, GBP, maybe you have CHF, JPY.  You know, it thins out very, very quickly.  Even Australia, New Zealand, Canada, Swiss, these are smaller.  So, in part, this problem of the ability to create currencies at will mirrors, if you like, the fact that central bankers can print money at will.  And this is one of the problems, is that they have the ability to print and you have to have a culture that stops printing.

So, what you guys have figured out is that you have to have a culture that stops printing crypto, and not printing it at the level of new Bitcoins, but new coins.

Peter McCormack: We can't really stop that though.

Eric Weinstein: But in part, what you're trying to do is you're trying to make it non-profitable.

Peter McCormack: No, I think actually what we're trying to do is, if you've been in long enough, you've seen people buy a new coin, make a profit and then suddenly be in a loss as the rug gets pulled, and then that coin just dies off.  Very few have survived multiple cycles.  It's more about trying to guide people towards Bitcoin and what's different about it.

Eric Weinstein: Yes and no.  I would say that part of it is altruistic, saying that, "I don't want you to make these mistakes".  There is the altruistic aspect of, "Have fun being poor".  You're trying to tell somebody, "You don't have to lose.  Yes, you're not going to win as much as if you'd got in in 2011, but on the other hand you don't have to lose".  So, in a weird way, even the completely charmless epithet, "Have fun staying poor" has a bit of idealism to it. 

But here, you are both talking about, I mean you said it yourself, when your net worth is invested in this object, you have a different feeling about it; and the issue of talking one's book is distinct from warning other people; it's distinct from having a preference for Bitcoin over everything else, if for no other reason that its ideology is different.  It comes from a mysterious place that we don't yet understand.  It's not trying to be smart contracts, although there are things that are bolt-ons and off to the side that may have those properties.

So, let's agree that there is some standard process by which people discover the world of crypto, they make certain economical mistakes, there's a way in which the community has been through this a million times, people come in at different levels; people come in just wanting to learn; other people come in saying, "Don't worry, I've sold everything.  Buy brunocoin or buy sallycoin", or whatever it is, so you create your own.

Okay, what I'm much more interested in is, where's the really good conversation to be had around crypto in general, Bitcoin in particular and the relationship between fiat and crypto; between that which is enforced by violence and that which is enforced by maths?

Peter McCormack: Well, a lot of people in the circles I mix in, they don't even entertain the conversation of crypto; they don't even use the word.  It's like, "No, I'm not in crypto; I'm in Bitcoin".  That's just a bunch of bullshit.  And the way I tend to think about it myself, the way I've compartmentalised it is that, I consider Bitcoin to be my vault that's protected.  It's protected by maths, cryptography and a rabid army of plebs or cyber hornets, as Saylor calls them, who are there to protect Bitcoin.  And then, I consider all the other stuff, I think that's me taking a bit of money out of my vault and going to Vegas and going to the casino and just playing the roulette.

Eric Weinstein: You see, this is one of these revelations, which is you think of this primarily as money and one of the ways in which I get into trouble with bitcoiners is not thinking about this primarily as money.  So, the issue of it being a form of money was important to getting people to adopt distributed computing.  So, even if you view it as purely a technology, the fact that that technology was a technology built around money and it could make you rich in traditional terms by understanding it, it's a very good example of getting fitness landscapes to cause the adoption of a new technology.

So in a certain sense, wealth is its killer app so far.  People are always saying, "What's the application?"  I would say one thing is that it's made a lot of people very wealthy and so, in a weird way, money is the killer app of the blockchain decentralised computing story.  But, if I continue to think about it as technology, in every other situation, people want to innovate.  The great danger in Bitcoin is, "No, you can't innovate around this because it's money".  Because it's money, it should be resistant to certain kinds of innovation.  Then we get into a different discussion of, "Well, do you have to do something in the main thread, or can you do something off to the side and we're not really against innovation?"

My concern is that there's a huge number of uninteresting conversations to be had around this and I don't want to waste your time and your listeners' time in one of the rivulets.  One of the things I've learned is that everybody sounds like something.  So, whether or not I'm just saying the same thing everybody does when they alight in the Bitcoin universe, or whether I'm saying something different, people will hear it in terms of what they've already heard before.

Peter McCormack: Yeah, I get that.  I mean, I was talking to Travis on the way up and even Rich who's been kind enough to loan us this studio, is that a lot of the conversations are the same.  And it is good to get different voices on and hear different voices.  And I was pestering you, because I actually wanted to hear about the things you have to say.  Whether or not I agree, it doesn't matter and we can debate those, but it is interesting to get into that.  But it's funny; I don't consider this a technical revolution.  This, to me, is a monetary revolution.

Eric Weinstein: You don't see this as a technical revolution?

Peter McCormack: No, I see it as a monetary revolution.

Eric Weinstein: I see it as a technical revolution as well.

Travis Kling: I think it's both; it seems like it's both.  The shorthand way that I think about this a lot, and as a guy that runs an investment fund for a living, I've definitely spent tons of time for years thinking about this.  There are a lot of different use cases for distributed ledger technology.  At the moment, money and specifically store of value appears to be the killer app right now.  And when you evaluate these different use cases, I like to ask four questions: how ready is the tech for the world; how ready is the world for the tech; what do you need decentralisation for; and, how decentralised is decentralised enough?

In my opinion, and again not a Bitcoin maximalist, the fund doesn't reflect that, but I think Bitcoin more fully and convincingly answers those four questions than any other crypto asset in existence today.  And that's not to say that there's not a lot of really interesting innovation that's going on down market cap from BTC; and ETH and what's going on with DeFi would be the poster child for that.  But, within those four questions, and specifically I think, what do you need decentralisation for and how decentralised is decentralised enough; well, if you need sovereign-grade censorship resistance, you've got to have a lot of decentralisation for that, and that's Bitcoin that exists on 10,000 nodes all across the world.

When you look at Ethereum, which is a smart contract platform, decentralised compute, however you want to say it, it's kind of at the furthest end of the spectrum in terms of decentralisation for that kind of thing.  And then, all the way over on the right side is AWS.  And, man, AWS works amazing, right, and it's cheap.  We use it a lot for our business and it's a great product.  If you're going to run Crypto Kitties, there's a question on what you need decentralisation for versus just running Crypto Kitties on top of AWS. 

There are a lot of other competitor smart contract platforms to Ethereum that sit at different places along that spectrum, and I think the market is collectively trying to figure out what exactly do we need decentralisation for and how decentralised is decentralised enough.

Peter McCormack: You see, one of the big debates right now between Bitcoin and Ethereum is to do with the consensus mechanism but that, to me, isn't an argument over technology; that's an argument over the resulting impact it has on the monetary policy, proof of work being free market and proof of stake being kind of a rebuilding of the system we have now, which can drive wealth inequality and centralises power, centralises the rewards from the system.

Anyone can spin up a miner and start earning Bitcoin, but with proof of stake you already have to be invested.  And the wealth is redistributed to the people who have the most money and the power.  So, for me, it definitely is a monetary revolution.  There are technical aspects over it --

Eric Weinstein: Yeah, I'm not fighting the idea that it is a monetary revolution in particular.  What I'm really trying to say is, the first way it strikes me is as a new technology.  The fact that money is part of the adoption scheme is weirdly, to me, part of the technology.  I mean, I keep referring to Daniel Suarez's books, Daemon and Freedom.  Those books talk about a guy I think who dies and more or less puts an entire world in motion after his death by using incentive structures and technology.

So, in a weird way, this is something that causes humans to adopt it by making them richer.  And by getting humans who are curious and are high in trait openness, if you did a Big Five personality inventory; maybe it requires less of it now.  Yes, that wealth-building ability is part of the tech.  Now, the problem and what makes it unique is that, if I disrupt the tech platform, I may disrupt the wealth, and that causes people to want to freeze it in.

Now, we have analogues of this.  There is, for example, I mean the last line of the Torah says something about, "There never came another that God knew like Moses" and if you think about Islam, there's this concept of bid'ah, or innovation, which is a bad thing.  If you innovate after Mohammed, then you've taken this perfect interaction that Mohammed and God have had and you sully it.  So, in a weird way, the ideas we've had are a divine moment and don't touch this thing.

That's not true at a certain level.  There's lots of work being done on Bitcoin and around it, but there's another weird way in which, yeah, it is really true, don't touch this thing.  That comes from its monetary nature, not from its technological nature as a pure sort of digital technology, not the meta technology that includes money as its adoption process.

Travis Kling: Well, if you're competing against gold, we've been using gold to store value for 5,000 years.  The incumbent has this stunning head start on you.  And in order to convince increasingly more people to adopt this alternative store of value, based on this technology that people don't really understand all that well, I think being slow to change, that's a feature not a bug.  I'm always reminded of, Peter, you've definitely seen the movie, Snatch, right?

Peter McCormack: Yeah, of course.  Guy Ritchie.

Travis Kling: Yeah, anyway, it's one of my all-time favourite movies.  This Russian mobster sells this gun to one of the main characters, and he hands it to him and it's this enormous old-looking revolver.  The guy goes, "Little heavy, isn't it?" and the Russian mobster goes, "Heavy is good, heavy is reliable".  And in a lot of ways, that's how I think about Bitcoin as it changes on the main chain; it just needs to, if it's going to compete against gold, people need to understand that it's going to be the same; it's just really hard to change.

Peter McCormack: And I think some of the competing cryptocurrencies, they're making trade-offs which might sound like it's a better technology.  I mean, I get trolled all the time; I'm into the boomercoin, "Bitcoin's the boomercoin.  It's slow", etc.  What I don't think they understand is, it has the properties that make it the best form of money.  So, went through the scaling wars, we had this war and Bitcoin won.  The reason it won is because the trade-offs aren't worth it.  When you went for bigger blocks, you further centralised the project.  If you try and be faster, you further centralised the project.

So, I'm not opposed.  I think a lot of bitcoiners wouldn't be opposed if a better Bitcoin comes, but there just isn't.

Eric Weinstein: But it's also less -- you see, I don't really believe that.  I really believe at some level that when you have your wealth bound up in this thing, you have multiple feelings about it, right.  And one of the feelings is, "I want to get richer".  So, if there was some opportunity to have a much better, decentralised form of money and smart contracts and all this stuff and it was going to obliterate your wealth, you wouldn't be indifferent to it.

Peter McCormack: But you could put your money easily into that.

Eric Weinstein: Maybe, but maybe you're slow to figure it out because you're a Bitcoin maximalist and you spent the first four years of its life, whatever this new thing is, talking about it as shitcoin.

What I'm trying to get at is, let's cut the crap.  The fact is, we have an asset, it's making people richer.  In a weird way, they're both philosophical about it; they're also disingenuous about it.  Then you have the people coming in from outside.  They are both knowledgeable about things other than Bitcoin and they're also posers and they both want to change the world and they both want to rip people off.  All of these things are going on.  And I want to have the conversation after all of the typical foreplay.

Peter McCormack: Okay.

Eric Weinstein: So, all the foreplay has to do with, "No, we don't really mean this.  We may appear this way, but we're actually trying to do something and if you get to know it…", whatever; it doesn't matter.  The more interesting thing to me is, this technology and this new form of money is really interesting and it's new and it means something.  And what I want to get to is, well, where are we really headed; and, what does it do; and, is this really a store of freedom?  We talked about a store of value, but is this really an effective store of freedom?

If the world's major governments decide that they can't stop the technology, but they can cause the penalties to be very high, just the way we do for counterfeiting --

Peter McCormack: Counterfeiting by the populous, not by the government, because the government counterfeits?

Eric Weinstein: Well, the government prints.

Peter McCormack: It's counterfeiting.

Eric Weinstein: No, it's not.  It's retaining the right to transfer wealth by printing fiat currency.

Peter McCormack: I think they're counterfeiting.

Eric Weinstein: They're counterfeiting?  Well, what does that mean?

Peter McCormack: I think the government counterfeits currency when they print it, because it's no different to if I was to create a machine to create money?

Travis Kling: No, I mean the definition of counterfeiting is making fake money and the government, part of its role is it gets to create real money. 

Eric Weinstein: The government creates, if you like just to riff of this, the government creates a fake reality, if that's what you want to call specifics.

Peter McCormack: Yeah.  They get to print their way out of mistakes; we don't.

Eric Weinstein: All right, so now is the idea that you have civics as fake, right?

Peter McCormack: Yeah.

Eric Weinstein: Okay, so we have a fake democracy, we have a fake democracy that deals out real death.  I don't know where we're going with this.  In other words, I may be your ally in saying, I can't stand the government's right to print money and claim that it's engaging in stimulus or relief or lubricating the economy or who knows what.  You're transferring wealth by diluting.

Peter McCormack: I just consider it legalised counterfeiting.

Eric Weinstein: But you had to say "legalised"?

Peter McCormack: I'm just saying, it's the exact same.  If I could create perfect notes --

Eric Weinstein: Shall we call it "tax theft"?

Peter McCormack: There are certain people who are listening want me to say that.

Eric Weinstein: Exactly, that's what I'm trying to say which is, this is the problem I have with all of these conversations.

Peter McCormack: I'm not an anarchist though.

Eric Weinstein: Whatever, but we get into these things where we just have these typical well-worn conversations about things like, is printing money counterfeiting?  You know as well as I do that, if you believe governments are legitimate, then they're retaining a right over their fiat currency to make more of it, diluting people in the process.  So, they're going to devalue it through the mechanism of seigniorage.

Now, we can say seigniorage, we're not going to get upset, but if you want to say counterfeiting, I'm going to sit there are say, "Well, what's the dictionary definition if a government counterfeits in its own currency?"  I agree that if you start printing euros and you're in the United States, then you've got a different issue, but does the United States have the right to print US dollars if it enforces its currency by violence?  Yes.  It calls counterfeiting what it does done by anyone who is not it.

Travis Kling: There we go; I like that!

Eric Weinstein: Okay?

Peter McCormack: Yeah, but my point being is that they have the right to print their way out of their mistakes and we don't.

Eric Weinstein: That's right.

Peter McCormack: Okay, so let's do it a different way that.  Shall we theorise the impact of the growth in Bitcoin?  If it just continues to grow, what will the impact be?  Rather than debate whether tax is theft, etc, theorise where it goes then.  What is the actual impact?

Eric Weinstein: Well, at some point, crypto gets big enough that our governments who issue fiat currency are going to want a do-over, and that scares the crap out of me, because the number one ploy will be to say, "If we catch you transacting in this, we're going to make your life hell.  And we're not going to catch all of you.  If you decide that you're going to print a dollar bill on your home printer, the odds that we're going to catch you are very, very low, but we're going to make the penalty very, very high so you don't start experimenting with this".

All right, well that's what you're going to start to see, is you're going to start to see draconian penalties for doing things that are difficult to stop using crypto, if we are not careful. 

Travis Kling: What do you think the likelihood is of that outcome?

Eric Weinstein: It depends.  I mean, there are a lot of ways that the Bitcoin story goes south in a very dangerous way.

Travis Kling: By south, you mean like Bitcoin fails; or south, like it gets so big that --

Eric Weinstein: We don't know; this is a novel object.  And part of what makes it exciting is novelty.  Now, when you hear many people talking about Bitcoin, they will talk about it as if its past will be its future.  The most remarkable thing about Bitcoin by far is every day I check it and it's not zero against the US dollar and I think, "This thing is a miracle".  Literally.

Travis Kling: The Lindy Effect.  People love that word in Bitcoin.

Eric Weinstein: Is that right?

Travis Kling: Yeah.  It just means it's been around.

Eric Weinstein: Okay.  I can't tell you how impressed I am every day that it's not at zero.  It's just one more day that this thing, which the prize for taking this thing down is enormous.  Effectively, it's offering a bounty and it hasn't happened, even after the Mt Gox and all that kind of stuff.  It has been very durable and that's one of the reasons why it has a very stable following of people who are fanatical, because everybody wants to take it down.

I mean, do you think George Soros wouldn't enjoy speculating against Bitcoin and making billions and showing up the community?

Travis Kling: He's actually been investing in the asset class; he's actually gone the other way, but yeah, I get it.

Eric Weinstein: You know.  How much fun to have all the bitcoiners in your back pocket, because you skin them all?  Now, that world in which Bitcoin continues to exist has to reconcile with the fact that Bitcoin hasn't been exposed to most things that can happen.  Bitcoin has happened during a period of relative quiet in terms of the world's, let's say military engagements; it has taken place in a period of relative technological stagnation. 

I don't know how Bitcoin behaves more generally, or what happens when it gets close to its 21 million ceiling, or anything.  I don't know how it will continue to deal with its challenges now.  It's got a large number of years where it hasn't fallen apart, but no, this is a dangerous object.  To your point about gold; we now a lot more about gold.

Peter McCormack: Dangerous in what way though?  Dangerous as a threat to government?

Eric Weinstein: Well, let's think about gold, the US dollar and Bitcoin in the same terms.

Peter McCormack: Yeah.

Eric Weinstein: Okay, gold comes not only from physics, but from violent physics.  It doesn't just come from stars, it comes from collisions and explosions of stars.  It's very hard to make gold.  Fiat comes from a printing press and the threat of violence.  So, we've got gold that comes from violent engagements of stars; we've got USD which comes from the full faith and violence of the US Government; and we have Bitcoin that comes from what?

Peter McCormack: Peaceful revolution.  Come on, not read Nic Carter?!

Eric Weinstein: It comes from elliptic curves, it comes from maths.  And in a weird way, that shift towards number theory to make sure that you have a form of money, that reveals a potential undoing.  If there's a huge change in quantum computing or cryptography, or we come to understand that there's a back door, if we have some change, for example in physics.  Maybe we can make gold atoms out of helium and hydrogen; I don't know.  Potentially you always have the problem of a central bank goes hyperinflationary and just runs the printing presses morning, noon and night.

All of these things have a problem, because if you think about the traditional definition of money, we have store of value, medium of exchange and unit of account, all these things; it may be that there really isn't any good example of money.

Peter McCormack: Well, they're all relative to each.

Eric Weinstein: That's the point.

Peter McCormack: And dependent on what you're measuring it on.

Eric Weinstein: But one of the issues is, does the volatility of the exchange rate, if it's volatile enough, actually function as a threat to store of value, even assuming there's no drift of the median exchange rate?

Travis Kling: Well, it's only been volatile with the upside over any meaningful amount of time, right?

Eric Weinstein: Well, this is the point you have that you have the long-term trend, so you can detrend it; you can subtract off the trend and just say, what is its propensity of the exchange rate?  Remember, it's not Bitcoin; it's the exchange rate of Bitcoin that has the volatility to it.  So, then you can ask, "Well, how volatile is this asset on an annualised basis?"  It's pretty volatile. 

That means that even if the middle point, however you want to define it, doesn't move that much.  If I get in when it's very high, then its mean reverts and it goes way below; that is not going to be a great store of value for me, based on my entry points and my exit points.  So, in part, Bitcoin's volatility is part of a threat to its use as money.

Travis Kling: You can't go from zero to gold's worth $10 trillion on aggregate.  You can't go to zero to $10 trillion without volatility in the price.

Eric Weinstein: Imagine, for example, that with gold… no.  Imagine a new element, I don't know, preciousium.  So, preciousium transacts where it can be $5 exchange rate, $5 in $5,000 and it doesn't drift relative to USD; just imagine.  But it really varies within that range, between $5 and $5,000.  That's a tough store of value, even if you believe, in some sense, that it doesn't drift.  It means that where you enter and where you exit really make a difference.

Peter McCormack: Yeah, but the market is pricing in a new global money.  And as Travis said, you can't go from zero to $1 trillion, $5 trillion, $10 trillion over 10 years, 12 years without some volatility.

Eric Weinstein: But again, do you want it to be volatile?  In some sense, if I think about three different universes: I have the universe of, let's say, consumer prices; I have the universe of fiat currencies; and I have the universe of crypto.  So, if those are three vertices of a triangle, then the edges of a triangle are all exchange rates.  Even the price of a consumer good in fiat currency is really an exchange rate, right; how many pairs of tennis shoes?  Okay, what should those legs look like if fiat currency is itself garbage?

Peter McCormack: Well, it's all relative again?

Travis Kling: No, things are just going to keep getting more expensive, right; isn't that the answer?

Eric Weinstein: Right, so that was my point.  Assume that the dollar, for example, has a property with respect to consumer prices, that it has low variation with respect to consumer prices, but it has a high propensity to be inflated away; just assume that that's true for the moment.  Then, assume that Bitcoin had a low propensity to be inflated away, but had extremely high volatility with both of the other objects, because they both have low volatility relative to each other.

So, in some sense, you would have one vertex being a better traditional store of value, but subject to sky-high volatility; and you have the other thing being a better medium of exchange with respect to short-term fluctuation, but being a very poor store of value over a long term.

Peter McCormack: But that's how we use money, right?

Travis Kling: Yeah, so this is this view that gold is good at storing value over time but not space; and fiat currency is good at storing value over space but not time; and Bitcoin is superior at both, because it's instantly transferrable anywhere in the world, really cheap and it has the properties to store value very, very well.  In Austrian Economics terms, it's the hardest money in human history.  And, to your earlier point, the world hasn't actually ever had anything like it before.

But there's a qualitative framework around assessing potential stores of value that have been around for a long time, right?  Gold, 5,000 years.  Before gold, we were using salt, seashells, really big heavy rocks.  And there's a reason that when gold came along, over time humans decided collectively that gold is better at storing value than salt and it's an Austrian Economics framework; hard money versus soft, sound versus unsound, the six characteristics of money: durable, divisible, portable, uniform, accepted, scarce.

When you line salt up next to gold, gold's definitely the winner there.  And then, when you put Bitcoin up next to gold, you can make a really credible claim that Bitcoin is superior in five out of six of those characteristics and it's really just acceptability, given that gold is not really the foundation of the global financial system, but kind of, because central banks hold a lot of it.  And, Bitcoin's made pretty good headways in terms of acceptability versus a 5,000-year-old asset in 12 years.

Eric Weinstein: Great.  I mean, it's something wildly new, super exciting, but what do you guys really want to talk about?!  No, seriously, because there's some level where I don't want to talk about Austrian Economics one more time, and I don't want to talk about mediums of exchange and units of account one more time, and I don't want to talk about central bankers one more time.  You guys want to talk about something?

Peter McCormack: Well, we talk about this stuff every week.  You're a different voice, you have a lot of conversations with other people.  I want to know what you think; what are the areas you want to get into; what is interesting you in Bitcoin; what are the topics where you're like -- what is it making you think in terms of threats, opportunity?  You're definitely interested.  I know you see the threat of inflation and I know you --

Eric Weinstein: I see the threat of abundance.  I hate abundance.  Everybody in my world just goes crazy for abundance.  They go to Burning Man one day a year or one week a year and then they have these experiences, right, and then they say, "Oh my God, it was so beautiful.  Everybody was gifting.  I wish Burning Man could be 365 days a year" and there's a relationship at Burning Man between Black Rock City and what they call "the Default World".  Have you been?

Peter McCormack: I haven't.  I've heard good things.

Eric Weinstein: All right, so they say, "Welcome home, this has always been your home and you've left the Default World".  The Default World is fiat mediated, so there's a weird way in which Bitcoin and Black Rock City are real things, they're durable; they've been doing Black Rock City for quite some time, since it was on Baker Beach; and there's a relationship between the old world, that is fiat currency or the Default World, and bitcoiner or Burning Man, because Burning Man couldn't exist without the Default World.

You spend 51 weeks a year earning in the Default World to blow it on one week at Burning Man.  All that treasure that gets trucked into the desert came from somewhere.  And in a certain way, at some level, fiat currency is inextricably intertwined with Bitcoin and with crypto in a way that's uncomfortable, because of course the Black Rock City folks want to do away with the Default World; they want to live in Black Rock City.

Peter McCormack: Isn't that a barter economy when you're there?

Eric Weinstein: There's no thing that looks like an economy once you're in Burning Man.

Peter McCormack: Isn't it like exchanging of things though?

Eric Weinstein: You gift things.  You don't expect.

Travis Kling: Sorry, I lost the comparison to Bitcoin through that.

Eric Weinstein: You have worlds that feel free of the old, but they're actually inextricably connected.

Peter McCormack: Yeah.

Eric Weinstein: You see, when people have their wealth in Bitcoin and then you see them clutching their heads in pain, as some were doing recently --

Peter McCormack: I don't know; some of us were laughing!

Eric Weinstein: Yes, but some people were talking, "Why don't some of the people who have mediated this crash understand the toll in human lives?  I just put everything I had into this asset", etc.

Peter McCormack: Well, they're an idiot!

Eric Weinstein: Shall we tell them that?

Peter McCormack: Well, I think I just did.

Eric Weinstein: Okay.

Peter McCormack: I mean, there were two kinds of reactions to what happened over that week.  There were the bitcoiners who just laughed and there were the shitcoiners who were in Bitcoin who were devastated.

Eric Weinstein: No, the bitcoiners didn't just laugh.

Peter McCormack: A lot of the ones I know did.  Travis didn't, because he's --

Eric Weinstein: A lot of people didn't laugh.

Peter McCormack: A lot of people did laugh though.

Eric Weinstein: A lot of people laughed and a lot of people didn't laugh.

Peter McCormack: Shall we talk about the ones who did first?

Eric Weinstein: Sure.

Peter McCormack: And talk about why they did?

Eric Weinstein: We should do that.  But again, I put in mind the fact that you asked a question which is, "What is the relationship of Black Rock City and Bitcoin?" and my comment was that there's an uncomfortable relationship to the outside world that you're trying to disintermediate and the fact that you are dependent, in some sense, on that outside world.

Travis Kling: Big time, yeah.

Eric Weinstein: And so, my claim, which was supposed to be uncomfortable, but maybe bitcoiners are all just geniuses and the rest of us are all fucking idiots, is that it wasn't universally seen as fun.

Travis Kling: Of course not.

Eric Weinstein: It just wasn't.  And it bothers me that we're going to rek on this and say, "Oh, yeah, real bitcoiners didn't even bother; they didn't even notice".

Peter McCormack: No, I'm being slightly facetious, but the point I'm trying to make is the overall narrative of what happened over the week, right.  Bitcoin's had a great year, but Bitcoin, as we said, it's meant to be decentralised and decentralisation isn't just decentralised of the tech; it's a decentralisation of the power. 

If you look at how the process works for doing upgrades to Bitcoin, the BIP process, the review process, the social consensus that's reached, the building the code, the testing the code, the deployment, the signalling for the code; that is a beautifully designed decentralised process to ensure it's hard to change and when changes come, they're necessary and they're big and important upgrades to the system.

What we had was a centralisation of power and influence over narrative and market prices, which came essentially, a lot, from Elon Musk, who's been kind of schizophrenically changing his opinions on Bitcoin, and a lot of bitcoiners don't like that, because it's too much power and --

Eric Weinstein: Who gave him this power?

Peter McCormack: Well, he took it.

Travis Kling: He took it.  He bought $1.5 billion.

Eric Weinstein: That may be, but --

Peter McCormack: Well, no, in fairness, Travis, we also gave it to him, because myself, I was celebrating, "This is amazing; Tesla are involved.  This is going to be great because other companies are going to be thinking about it".  I now reflect on that as, okay, we go through learning journeys with anything, but I reflect on it and go, "Actually, that was wrong", because it was too much power in the hands of somebody who's highly influential, also erratic, and he can influence the narrative, which is what happened.  And, he's also got all other weird incentive structures going on with his business and carbon credits, and that's why it was, "Actually, this would be better if he went".

It's like the meme that came out.  It was like this car on the road; did you see it?  It's like, the car can go two ways and the sign says, "Number Go Up, or Tell a billionaire to fuck off", and the car's going that way.  And the point being is, bitcoiners will tell him to fuck off.  It doesn't matter if you're Travis, Pete, Eric, whoever; we don't want --

Eric Weinstein: But you partially got into trouble, because you forgot your own culture.

Peter McCormack: How do you mean?

Eric Weinstein: Super sexy man with rockets, smartest man on earth, etc, coolest dude ever embraces Bitcoin.  It's like, "You see, mum!  I told you this was going to be something!"

Peter McCormack: Yeah, we all got excited.

Travis Kling: Yeah, big time.  It's a weird balance of anti-fragility, which I think a lot of bitcoiners would argue is one of Bitcoin's greatest properties, where you have periods of time where a single individual, or a group, or an organisation moves into a position where they can have an outsized influence on price, or potentially the direction of the project, like let's say in the block debate in 2017; and I think the bitcoiners have this long-storied history of these back and forths towards, "Well, we appreciate that somebody is shining a light on why this is important but at the same time, deeply understanding that decentralisation is one of the most critical components".

Eric Weinstein: You don't have a long-storied history; you just don't.  I mean, sorry, I'm 55 years old and if I know somebody for the length of time that Bitcoin has been on earth, I don't consider them an old friend.

Peter McCormack: Okay, that's a fair point.

Travis Kling: Great point.

Eric Weinstein: Next point.  Yeah, when you guys were going through your "loving Elon" phase, because Elon smiled and that gave legitimacy, it spoke to me about things we don't like to talk about, which is, "I've taken so much shit for holding this asset that's made me rich.  It feels wonderful that --"

Peter McCormack: Yeah, it was validation.

Eric Weinstein: I understand that, but that broke your rule, right.  We don't trust, we validate.  Who did the validation?  Some outside force.  You allowed --

Peter McCormack: Not me!

Eric Weinstein: On average, the community, which isn't a community --

Travis Kling: You don't understand!

Eric Weinstein: -- etc --

Peter McCormack: It is a community.

Eric Weinstein: -- allowed yourselves to get suckered by validation.  Now, one of the things I will say, in my own defence, because I'm the only one defending me here --

Travis Kling: We love you, by the way; you know that, right? 

Eric Weinstein: I've been super excited to do this and we are natural allies and this will all work out in the end.

Peter McCormack: But you watch your step.  If you put a fist wrong, we'll fucking come after you!

Eric Weinstein: Which is why I'm introducing ericcoin!  What I was going to say is that I didn't allow you to push me off Bitcoin when you were being dicks, and I'm not going to abandon Bitcoin because its number goes down.  So, from my perspective, I'm just looking at this laughing, no offence, which is I got your stuff better than you did which is, don't suck up to the billionaire!

Peter McCormack: Well, we can't be absolute about this.  There were plenty of people when Elon come in, you've heard of the plebs; plenty of those were like, "Not sure" and I think it's made everyone a bit cautious now.  Even, I would say, since this episode, even Michael Saylor is now being watched with a different eye.  And I don't mind saying that; I would say it to him.  I think there is that kind of nervousness now.  I also think one of the things with the Elon thing is, he's getting a lot of pressure.  I think the reason he's getting a lot of pressure is because he's being tested now.  You're either in properly, or piss off.

Eric Weinstein: What he did was just wrong.

Peter McCormack: Yeah, of course.

Eric Weinstein: And it was wrong at multiple levels.

Peter McCormack: Well, what do you think he did wrong, because I've got views?

Eric Weinstein: Well, one thing that I think he did wrong is that he explained why he's backing away from this, based on information he had when he was backing into it.

Travis Kling: Yeah, huge questions --

Eric Weinstein: So my feeling is, come on, cut the crap.

Peter McCormack: What do you think happened?

Eric Weinstein: Who cares?  I mean, here's my problem.  I don't think Elon is really central to the Bitcoin story; I just don't.

Peter McCormack: Agreed.  I think he needs pushing away from it.

Eric Weinstein: I think that the key thing is, you've got to free your mind of Elon, right.  You have to appreciate Elon for all the wonderful things that he is and you have to recognise that it's counterbalanced by all the things that he is that you wish he wasn't.  In so doing, he is like the rest of us.

Now, what I get is that Bitcoin is bigger than any particular person, it doesn't really belong, it's decentralised; okay, that's its ethos.  Within that ethos, I think Elon is a guy working out his own problems from being too famous and under too much scrutiny and so, he likes to say random stuff.  His comment, "The world takes the path that is maximally entertaining", right?  It's pure chaotic neutral.

So, in a weird way, he's not your hero, he's not your villain, I don't think he's done with Bitcoin; my sense of it is that he's going to come back into the Bitcoin universe.  What happened with Tesla being forward-thinking enough to accept Bitcoin immediately resulted in Tesla not being forward enough to accept Bitcoin, because it wasn't ready. 

Peter McCormack: It wasn't ready?

Eric Weinstein: Yeah.

Peter McCormack: What do you mean, it wasn't ready?

Eric Weinstein: My belief is that there's a reason that so few large ticket items advertise that they are purchasable simply in Bitcoin for a reason.  You're talking about something with volatility properties that if it comes in contact with the normal financial universe are going to lead to enormous swings.  If you hold a lot of Bitcoin on your balance sheet, you've got a situation if you're going to be priced in a numerary like USD.

Travis Kling: It's completely conjecture on my part, but I would guess that Tesla sold about 40 Teslas for Bitcoin.  It's a guess, but there's Gresham's Law, "Bad money drives out good".  You spend the money that's not very good at being money and you hoard the money that's good at being money.

Eric Weinstein: I'm just trying to get the idea that when you're first out of the blocks to try and do something big like this, you find out all the reasons why nobody else has done it.  So, you announce something, you get all the plaudits, people say, "Wow, great job", and then you actually have to manage the situation.  So, I remember thinking, and maybe this wasn't a very elevated thought, "I wonder how long that's going to last?"

Travis Kling: Accepting Bitcoin for payment for Teslas plus buying $1.5 billion worth of Bitcoin on a publicly traded company's balance sheet, that's about 1% impactful accepting Bitcoin and 99% impactful that he put it on his balance sheet.

Eric Weinstein: Yes, but my feeling is it was all coming from something that wasn't very well thought out.  My point wasn't about which has more impact; my thought was, maybe it's just dumb, but I heard Tesla's accepting Bitcoin and I thought, "This is so cool!"  That was my first reaction.  My second question was, "I wonder how long that's going to last?"

Peter McCormack: Yeah, but the 180 with the press release based on energy use and energy use becoming the narrative…?

Eric Weinstein: Yeah, but maybe the ideas that he really thought about was that he'd spent so much time on a green narrative with a car company, he hadn't figured out how -- maybe he'd rejected the idea that Bitcoin wasn't green enough, then he found out that was going to be too difficult; who knows?

Peter McCormack: Yeah, who knows?

Eric Weinstein: My question is, I really want to talk to Elon about interplanetary stuff and physics.  I'm not that interested in talking to Elon about crypto unless he's going to do something huge using his wealth or his brain.  But again, I get back to the same; I'm somewhat bored of the standard conversations that we can have around this.  What is it that you guys want to do that's next level and awesome?

I feel like the Bitcoin community is one of the best communities to take on the future and I'm much more interested about what a bunch of pirates want to do…  I've got a huge number of rich, idealistic pirates; that should be the most riveting thing.  That's one of the reasons that I was dying to do your show when you asked me.  We've got rich, smart, heterodox, idealistic, iconoclastic pirates, okay.  What are we doing?

Peter McCormack: We're going to build a country.

Eric Weinstein: Are we?

Peter McCormack: Maybe, if we find the right island.

Travis Kling: We start with money.

Peter McCormack: We've got enough of it.

Travis Kling: There is this turn of phrase, "Save the money, save the world.  Fix the money, fix the world".

Eric Weinstein: I understand that.

Travis Kling: Right now, I have things I want to fix right now.

Peter McCormack: What do you want to fix?  I'll tell you how Bitcoin fixes it.

Travis Kling: My relationship with my second cousin!

Eric Weinstein: Bitcoin fixes everything.  Okay, what really is going on for me is sense-making.

Travis Kling: Sorry, what do you mean by that?

Eric Weinstein: We used to have newspapers, we used to have universities, we used to have scholars.

Peter McCormack: But we're turning everything on its head right now.

Eric Weinstein: You bitcoiner --

Peter McCormack: No, everyone, everybody is.  Everybody's questioning everything, questioning the media, questioning education, questioning politics.  Everything is being rethought out right now.

Eric Weinstein: Except for things like honey badgers, which just don't care.  Bitcoin is supposed to be like a honey badger.

Peter McCormack: I think they care first.

Eric Weinstein: You think honey badgers care the most?

Peter McCormack: Well, just about certain things.  They were the first ones I saw who were -- they were trashing the media, they were trashing politics, they trash everything.  Basically, they don't trust verify.  They don't vaccines; not everyone, it's a spectrum.

Eric Weinstein: Who's they?

Travis Kling: Bitcoiners generally.

Peter McCormack: Bitcoiners generally, and it's a spectrum.  Certainly more on the right, or right-leaning or libertarian.  There are some on the left, but they keep quiet because they get attacked for being socialist.  But certainly, they see that you have to change the money to fix a lot of these problems.  The root of a lot of these problems is the money, the cheap credit.  You fix that money, you fix a lot of these problems.

I mean, you've talked about it a lot, about the degradation of society.

Eric Weinstein: Yeah, embedded growth obligation; I'm all over this action.  We're supposed to be natural allies; it's just this idea that I'm supposed to put laser eyes in my profile photo and I'm supposed to say, "I'm a maximalist now", as if I've touched a pod or I'm some sort of a Stepford Wife; F that.

Travis Kling: No, nobody's asking you to do that.

Peter McCormack: Have you got laser eyes, Travis?

Travis Kling: I took mine off when we hit the all-time high.

Peter McCormack: Yeah, I took mine off.

Eric Weinstein: Well, whatever, it doesn't matter.

Travis Kling: No, I know, I hear you.  If I was going to try and attempt to bridge a lot of the things that I've heard you talk about in various different capacities, I would bring up this concept called The Trust Revolution, that I've talked about for a while, and it's something that initially attracted me to this asset class and this technology in 2017, when I was first going down the rabbit hole.  It's actually stunning how much it's been exacerbated since then.

But we have seen unchecked power failing society in multiple levels, and that is getting worse, not better, and society is recoiling from that to an increasing degree, and younger generations feel this more acutely than older generations.  I think millennials and Gen Z are generations that think Wall Street is rigged, politicians are crooked and Big Tech takes your data and they do shitty stuff with it, or they don't keep it safe, or they use it to make themselves the richest people in the world and they don't return that value back.

There's commonalities across -- and, you can ask the question, "When did this start?" and I think you can make the case that it started in 2001 on the back of 9/11, when we went over in the Middle East and tens of thousands of lives were lost on the American side and many more on the other side; $10 trillion were spent; and what we went over there for in the first place never ended up happening and there was a question about why that happened.

Then, it was exacerbated in 2008 on the back of The Financial Crisis, when you damn near blew the whole world up; nobody went to jail; the bankers were all fine.  And then, you fast forward to Brexit and Donald Trump, and why did those two things happen on the other side of the world within a handful of months of one another, but with the exact same underlying drivers?  And then you just had hit after hit: NSA spying; Black Lives Matter; the Me Too movement; Harvey Weinstein.

Eric Weinstein: Yeah, it's all coming apart.

Travis Kling: Yeah, all of these things.  And society is recoiling from power tends to corrupt and absolute power corrupts absolutely.

Eric Weinstein: That's right.  The question is, decentralised power; what does that do?  We don't know.

Travis Kling: I think distributed ledger technology can serve as the technological platform to drive societal change for the good, in that it can start to dismantle these centralised powers that are failing the people.  And, money's a great place to start with that, and it obviously dovetails into the way our political system is in the United States right now, which I think is as broken as it's been since, I don't know, maybe the Civil War?  I don't know.

Peter McCormack: Well, you know, because you and Bret tried to make an attempt on that and you became censored.

Eric Weinstein: Well, I didn't believe Bret's attempt would work, but I was willing to throw my name behind him, because it shows why we can't have nice things!

Peter McCormack: Well, the most interesting thing about that was the censoring of that; like, what?

Eric Weinstein: Exactly.  Well, that was the whole point.  As soon as you have something that is completely non-threatening, like bipartisanship should be threatening to no one; of course it has to be censored, because that's what is really threatening, right?  So, if you had stable money and you had bipartisanship and you had a green world that was much less dependent on fossil fuels, what would power do?  I mean, we'd just spy on you on your relationships with your ex-boyfriend on Facebook?  I don't know what it would do.

So, we have a situation whereby real power, which is very hard to locate and find out who's behind it, has I think been decreasing.  But everybody else's power has been decreasing at an accelerated rate to that.  So, I believe that our central shadowy powers still exist, but they aren't that powerful.  What's happened is everybody else has gotten incredibly weakened and Bitcoin is one of the few things, as a community, that's gotten stronger.

So, the really interesting question is, "Okay, well what do you guys want to do?  Just hang on for dear life and buy a Lambo at some point?"  Is that what we're doing, or are we taking on nation states?  What's the plan here?

Travis Kling: There's no plan; we don't need a plan.

Peter McCormack: It's not binary.  We can get Lambos and take them on!

Eric Weinstein: But you're taking them on less.  Look, I'm really excited, you have to appreciate, I'm really excited about not dying.  Not dying is one of the things that excites me the most.

Peter McCormack: Okay, are you getting cryogenically frozen?

Eric Weinstein: Not that kind of not dying.  You have kids?

Peter McCormack: I have two.

Eric Weinstein: All right; that kind of not dying, right.

Peter McCormack: Okay.

Eric Weinstein: So, my feeling is, I want my lineage not to have a death sentence.  And, being trapped on a thermonuclear planet with lunatics with fingers on the button is not my idea of a good time.  So, I want out of that.  And most determinably, I want off this planet.

Peter McCormack: So, you want to go to Mars?

Eric Weinstein: No.  Mars and the Moon are starter planets, but they're only two of them.

Peter McCormack: Is Elon going to give you a seat?

Eric Weinstein: No, I don't know Elon.

Peter McCormack: I thought you might be able to apologise to him for me, because I kind of need a seat.

Travis Kling: He's giving me your seat!

Eric Weinstein: No, I mean I think what we need to do is focus on physics.  I keep saying to you guys, okay, you get so rich, Number Go Up, when are we doing physics; when are we actually going to invest in the ability to escape this planet?  Again, that's my pet thing, which is that I want humans to survive.

Peter McCormack: Okay.  That's not my pet thing.

Eric Weinstein: Okay, yeah, you don't care.

Peter McCormack: Well, no, I do, but I just think it's not going to happen in my lifetime, probably not happen in my kids' lifetime; it's not my focus of attention.

Eric Weinstein: You are aware that there are UFOs?

Peter McCormack: Yeah, this is a good time then, isn't it?

Eric Weinstein: Yeah.  I think you should rescale your time horizons.

Peter McCormack: Are you a UFO?

Eric Weinstein: Everyone is.

Peter McCormack: They are.

Eric Weinstein: Sorry, are you not?

Peter McCormack: I just don't know; I'm not sure.

Eric Weinstein: You should verify; don't trust me!

Peter McCormack: Well listen, look, I'm the more simple terms.  I'm a bit of a moron really and I don't have a university degree and all I can think about are the things that are close to me, which is me, my kids, my family.

Eric Weinstein: So, you were bragging that you weren't dumb enough to invest in a university degree and you're doing it through false humility?

Peter McCormack: No, I'm a dropout; I'm a university dropout.

Eric Weinstein: Pete, you're really pissing me off here!

Peter McCormack: I am actually a university dropout.  When I get a smart person -- I had to bring on Travis to help me.  Look, I have to think close to me and what's important to me.  The things that are close and important to me is me and my family, what's going to happen to the UK over the next 10, 20 years; is it going to see a similar -- well, it is seeing a similar sign to breakdown as the US happened; where do I want to live; where do I want to be; what's going to give me freedom?

I actually start from a very selfish point: what is best for me and best for my family; where should we live?  I actually quite like the look of Texas at the moment, but by the by.  And then, what can I do to help others.  I think, in terms of this, in terms of what we do with Bitcoin, it is just trying to drive some form of choice and financial freedom; some kind of separation from this system which is unfair.  My producer -- you know the website, WTF 1971, because you like it; my producer, Ben, worked on that.  I know that what we've seen is a lot of my friends would be traditionally middle class, now don't have much disposable income at the end of each month.

Eric Weinstein: Yeah, no kidding.

Peter McCormack: So, I see Bitcoin as a chance to --

Eric Weinstein: So, is it a revolution; is it financial revolution?

Peter McCormack: It's definitely a monetary revolution, but I don't understand how it's going to play out, because we're building something new here.  It's a form of money we've never had before, completely decentralised, completely digital; we're trying to decentralise power.  I mean, we talked about what happened with Elon earlier.  We go through learning lessons.  2017 was a scaling war; we learnt that forks aren't popular; we learnt that big blocks don't work.  This year, we've learnt that billionaire power isn't good.  We keep going through these --

Eric Weinstein: But you knew that?

Peter McCormack: No, I didn't.

Eric Weinstein: Yes, you did.

Peter McCormack: Well, maybe if I'd thought that through.

Eric Weinstein: You guys made an exception.

Peter McCormack: If I'd have rationalised it, maybe --

Eric Weinstein: You made an exception for a particular billionaire, because the particular billionaire showed up with a cache of cool.

Peter McCormack: Well, strictly speaking then, we've made the same for Michael Saylor, so we've made it for two billionaires; and Jack Dorsey, a third billionaire.  So, we've made it for all billionaires.

Eric Weinstein: Well, let's say it's not really about billionaires, it's about acceptance.

Peter McCormack: Yeah, and the validation.

Eric Weinstein: And the validation.

Peter McCormack: Yeah.

Eric Weinstein: Look, in part, I'm looking for confidence, right; the confidence of the community.

Peter McCormack: Oh, they're confident.

Eric Weinstein: Oh no, they're not.  I mean, you could wheel some maximalist out here that would give you a line that there'd be zero doubt.  I'm not talking about absolutism.  Totalising behaviour is one of the downfalls of the system.  I mean, if we brought somebody out who was completely convinced of Salafist Islam, would they be confident?  I mean, they might be willing to blow themselves up to show their confidence that they had an eternal reward taking out people who are threats to Islam; I don't know.

Peter McCormack: What do you mean by confidence then?

Travis Kling: Yeah, I don't think I know the difference between confidence and conviction?

Eric Weinstein: Well, confidence, I think at some point, you're looking at a quieter, more deliberative phase of this project.  The initial phase --

Peter McCormack: The initial phase is survival.

Eric Weinstein: Yes, you say, "I'm worried about my family; I'm worried about the UK".  So, the first thing we saw was, you're worried about you; then you're worried about your family, which is you extended; then you're worried about the UK, which is your country --

Peter McCormack: And my friends, put them in there.

Eric Weinstein: And your friends, okay; next, country.  So, these are circles of empathy and they're radiating out and eventually, you care about all of your fellow men.

There comes to be a point where you're not worried about the Bitcoin, you're not worried about your own personal finances, you're not worried about whether you're right or your wrong, you've already given yourself your pats on your back; you start thinking, "Okay, what is this meant to do?  What should we be doing?"

In part, it's going to be a self-organising system and one of the things that we're going to find out is, did this select for people who are able to form institutions themselves; or, are these people who hate institutions so much, "We're not going to do that; that's what boomers did, man!"?

Now, if you form institutions, what will the nature of those institutions be?  One possibility, you see, is that Silicon Valley was not good at forming new institutions, because it was so good at taking apart old ones.  So, the concept of software eating the world meant, "Why should I create anything in the world if software's just going to eat it later?"  So, the only thing worth doing is doing lightweight software things, because everything that's bricks and mortar is going to get blown away.

In a certain sense, it may be here's a good reason why Bitcoin should fail.  Bitcoiners being decentralised are going to build decentralised things, and those decentralised things will be very good at removing corrupt things that are centralised; and will be very bad at actually creating the new framework that we need when centralisation is necessary.  Now, I don't know; that's a story.  It's not necessarily a true story.  Maybe the bitcoiners are exceptional at doing centralised things when centralisation is called for; I don't know.

Peter McCormack: We're talking in absolutes again, and that's the thing about Bitcoin is, there's a range; there is an absolute range.  There are those that want complete breakdown of the state and believe in anarchism, which I don't.  It's not whether I theoretically believe it or not; I just don't believe it can happen.

Eric Weinstein: Yeah, I agree; we may have talked about this on the phone.

Peter McCormack: We talked about this and we had that conversation -- oh, God, I'm going to get so much hate for saying this, but I found your conversation with Bret about the monopoly and violence really interesting, because I was trying to weigh up the net of both scenarios; absolute freedom versus state and monopoly and violence, and which is best.  And, it depends where you measure it.

If you are a complete freedom-loving anarchist, you absolutely believe that you should be free and no one should have any right to make any decision over you.  Others believe that it's better that we organise and we agree collective rules.  I find that super interesting.  But, the spectrum is there.  You have got anarchists and you've got some quiet, under the radar socialists who don't want to admit it, because they don't want to get called -- and everything in between.

So, there are a range of people and they want to do a range of things, but I think the common thing that brings most bitcoiners together is, they want to end what is considered the cancer of central banking.  That is, I think, one of --

Eric Weinstein: What is the cancer of central banking?

Peter McCormack: I just think it's the ability to mess with the money.  Where you are, you've seen different impacts.  Whether you're in Venezuela, which I've been to to see the impact; or whether you're in Lebanon, it's different; or whether you're in Turkey.  It's different levels of inflation that's affected it.  But I think generally speaking, there is that common understanding and common agreement that the money printer is too easy to turn on now.  There is no check on the power of the money printer.  And, if we can end that or reign that in, that's going to be better for society.

Eric Weinstein: And what if you have an MMT person across from you?

Peter McCormack: I've done it; I did it with Stephanie Kelton.  I enjoyed having the conversation.  I think she's full of shit, but I enjoyed having the conversation.

Eric Weinstein: Okay, let me just stand in since she's not here.  So, the idea is, "No, you don't understand, this is great.  We have a problem if we can't print our way out of our own debt.  You have to appreciate that this is a feature, not a bug and in effect, part of the problem is, if you actually introduce the kind of money that you want to introduce, you're going to be condemning society to cyclical tragedy that effectively, without central banking and various solutions involving money, we have no way of dampening the cycle; and it's just going to be a cycle of monetary and financial violence that is revisited upon everyone at times of the market's choosing and not one we can afford".

Travis Kling: Well, if you can't print money, you can't go to war, in most cases.  And, when you look at the collapse of fiat currencies the vast majority of time, they happen because a country went to war and kept going to war and financing wars that it couldn't win.  In that way, trying to remove that capability over a long period of time from governments is unequivocally a peaceful endeavour.

Peter McCormack: I've never actually always bought that argument, because we've always been pretty much in a perpetual state of war somewhere on this planet.

Travis Kling: Sounds like we can get back to the nature of humanity on that.  But just looking at the history of fiat currency collapses, they happen from war.

Peter McCormack: Yeah, but what I'm saying is, sometimes I feel it's a bit reckless to say, "If you fix the money, there won't be any more war".

Travis Kling: I agree with that, yeah.  As humans, we're going to do what we do.  We're killing each other less than we ever have before.

Peter McCormack: Which is good.  So, based on the Stephanie Kelton argument, let me tell you my position.  So, the position I hold isn't as common in Bitcoin; if it is, it's under the radar.  I actually think there will be a symbiotic relationship with fiat currencies and Bitcoin forever and I don't think we will lose the state.  Some disagree.  My friend, Robert Breedlove, big fan of The Sovereign Individual, he thinks we're on a different path because the logic of violence changes with technology.  I love the arguments, I love the theory, but I think humans organise and they want a bit of protection, want a bit of centralised protection.

I think what will happen is, we will have potentially some checking on the power with Bitcoin, but you will still have the money printer; but it would have to be used in a more responsible way.  So, for example, go back to pre-1971, and I'm not a huge expert on the gold standard, okay, but there was a check on the money; but it didn't stop government being able to have the ability to print money.  I think that symbiotic relationship is needed.  I still think you need some form of a way of organising society.

I spoke to Scott Horton and he was like, "You don't want to have the big red button to get rid of government", even though he's a libertarian; he said, "It will be chaos".  But what you can do is, let's say, target making it a bit smaller".  It was Erik Voorhees who told me that, 1% or 5% smaller, and let's just try and check it, because it's got out of hand now.  So, if Bitcoin can reduce government by 1% next year, I would call that a huge success; a huge success.

Eric Weinstein: Yeah.  I think you and I are in different places.

Peter McCormack: Well, I expected that.

Eric Weinstein: I think I'm worried about general collapse at a level that you're not.

Peter McCormack: Oh no, I am.  But different types of collapse.

Eric Weinstein: But societal collapse?  Yeah, beyond…  I'm worried right now that what we have is we have a technically demanding planet, peacetime leadership that is completely mismatched with the challenges that we actually face, potential energy function for violence that is confusing everyone from Steven Pinker on down, because this idea that in general things are as peaceful or more peaceful than they've ever been.  It's like, "Wow, this forest hasn't burned for 75 years".  Well, what do you think is going to happen when it does burn for the first time in 75 years?  It's going to be pretty exciting.

So, right now, what I think is that we're in a terribly dangerous situation that isn't obviously dangerous, and I'm much more concerned than I think you guys are.

Peter McCormack: No.  Do you think we're in a fourth turning?

Eric Weinstein: Can I be straight?

Peter McCormack: Yeah.

Eric Weinstein: I hate this stuff.

Peter McCormack: Why?

Eric Weinstein: Well, because I've been talking recently about this as snap-to-grid intellectualism.

Peter McCormack: We had this conversation.

Eric Weinstein: Snap-to-grid intellectualism is like, you said something that reminds me of something I heard and then somebody will repeat something like, "Strong men make good times, good times make weak men, weak men make hard times, hard times make strong men; it always is a cycle, right?" and then you just think, "Okay, well that has some kind of naïve hold on my mind", but let me break that for a second.  Since 1952, we've had thermonuclear weapons, so don't talk to me about the fourth turning.

We can't afford for weak men to make hard times and know that this thing goes on forever.  Things changed, enormous change occurred.  And so, my concern is that I'm here to have a different conversation.  I don't want to have a Milton Friedman conversation; I don't want to have an Ayn Rand conversation; I don't want to have an MMT conversation.  You guys are something new.  I'm here to have a new conversation without fourth turnings.

We're in deep shit; you guys are rich.  You guys are talking about a new form of money that doesn't have a country to go with it.  It's not a chemical element.  What is the biggest, most beautiful future that you imagine for your families?  Mine begins with survival.

Peter McCormack: It's a life raft right now.

Eric Weinstein: Believe me, I hear that.  But what are we going to disintermediate?  Who are we going to disintermediate?  What are we doing?

Peter McCormack: I'm not sure we can change anything, Eric; we can try.

Eric Weinstein: Okay, well that's the thing.

Peter McCormack: But my point is, I think we may be on this natural path to collapse, or certain collapses in society.  We may be on this natural path to high inflation coming soon.  The reason I said the fourth turning is not because I believe it's going to happen, but the book's interesting, because same old saying, "History doesn't repeat, but it rhymes".  There is a lot of similarity.  Perhaps this is something we can't stop; I don't know.  What are you specifically worried about?

Eric Weinstein: All right.  I'm worried about a universe where the chairs that are supposed to be reserved for smart people have no smart people sitting in them.

Peter McCormack: Rich, do you want to come up here?!

Travis Kling: Are you referring to people from government, because we're there right now.

Eric Weinstein: Not just government.

Travis Kling: We've definitely got the B-team out there right now.

Eric Weinstein: Yeah, I'm not so sure that I'm so thrilled with our tech companies either; and I'm not so sure that I'm thrilled with our university departments; and I'm not so thrilled with our newspapers and our news agencies.  More or less, this is what's interesting.

Peter McCormack: This is the abundance of information.

Travis Kling: Decentralisation can be --

Eric Weinstein: The catalyst?

Travis Kling: Yeah, the catalyst across all of those things.

Eric Weinstein: Okay, maybe I'll throw something -- I just feel like it's almost impossible to have the interesting conversations anymore.  I don't even know how to do it.  So, in part, my thought is, if you really wanted me to talk and say something that's going to piss off your audience that I find fascinating it's, how do you get a bunch of people that get decentralisation to do something centralised, right?  That's hard.  That's one of the reasons why I'm not totally maximalist in my orientation.

At some level, you've got some hard-bitten people, "We don't trust!"  Okay, I get it, you don't trust.  You're going to have to trust and you've going to have to do something centralised if you're going to do something that shows that this what you guys said it was.

Peter McCormack: Well, there's a different point here.  We're decentralised with power, the platform, the protocol, okay.  You can get them together to centralise to go and do something external for Bitcoin; just don't make it Bitcoin.  You can, if you wanted to, create the -- for example, libertarians who are anti-politics, I always find that's a bit of a problem.

Eric Weinstein: You're not a libertarian?

Peter McCormack: I'm not.  I love the ideas theoretically.

Eric Weinstein: Do you like hanging out with libertarians?

Peter McCormack: I do like hanging out with them.

Eric Weinstein: So do I.

Peter McCormack: I love them.  I think the picture they paint of the world is incredible.

Eric Weinstein: That's the problem.  If it were credible, I'd be more excited.  It's incredible.

Peter McCormack: Well, the problem is, from whatever political position you're in, you believe your story's credible and you believe others aren't credible.  I was just down in El Salvador with a group of people; one of the girls from the US was trying to sell me on Marxism.  She thinks it's great; I was like, "What?"

Eric Weinstein: Marxism?

Peter McCormack: Yeah, she was trying to sell me on Marxism. 

Eric Weinstein: She can sell Marxism, you have talent!

Peter McCormack: She didn't do a good job.  But the point being is, she hates capitalism, right.  Whether you're left, whether you're right, whether you're libertarian, anarchist; from where you are, you believe your picture of the world is right and everything else is nonsense.  And what we haven't got is enough people trying to see everyone else's version of the world; that's what we don't have.

Eric Weinstein: Okay, but we're getting back.

Peter McCormack: Yeah, what do you think we need to do; just tell us?  When you say centralised, what do you mean?  Do you mean we need to go political, attack the system with our money, to change it?

Eric Weinstein: You've got a survival issue.  Look, I bore myself on this topic, but this is the endgame.  We're watching the endgame; we can't recognise it's the endgame, because we're not in a shooting war with China at the moment.

Peter McCormack: Yet.

Travis Kling: It's worth mentioning that Bitcoin is firmly in the middle of US/China relations; firmly.

Eric Weinstein: Okay.  We are in a situation in which we've got a dire economic problem, which is communism failed first; capitalism appears not to be able to get the job done; we don't seem to be able to think much beyond communism versus capitalism.  This is what's new, gentlemen; this is what's new and we're still having old-style conversations about what's new.

Peter McCormack: I feel like you want to tell us something?

Eric Weinstein: No, I don't want to tell you anything, because every time I say -- I don't want to say anything like that, because if I say, "I'm Eric Weinstein and I believe X, Y and Z", "Oh, Eric Weinstein…".

Peter McCormack: Yeah, but I don't care about them.

Eric Weinstein: That's not what I'm trying to say.  I'm trying to say, I would like this to do something new beyond just being a new form of money.  If it doesn't want to do that, if it just wants to be a new form of money and it wants to make sure that some people can have hopes and dreams for their children and you can buy that heart operation you were hoping to get your spouse, or who knows what, great; no arguments with it.

I happen to have a different question which is, does it solve everything?  That's really my question, because if it solves everything, I would know what I would want to go shopping for first.  What I would want to go shopping for is a return of sense-making and a lineage-level solution for human survival.  Now, people, they aren't used to these things.  They say, "If you had $1 billion, what would you…", "I'd buy my great aunt the house she'd always wanted".  Okay, that's great. 

I would like to get off this planet and I would like to get off this planet with options, because as we just saw under COVID, we're running one centralised experiment and that one centralised experiment is too dangerous with this many stupid people in positions of leadership.  And right now, whatever we're selecting for in terms of leadership, we used to have a lot of brutal people on the world stage who were very talented.  And we have fewer brutal people on the world stage --

Travis Kling: And way less talent. 

Eric Weinstein: -- and way less talent.  And so, this idea of making everything dumber, we've had 75 years of peace that are coming due.  We are out of shape.  We have no idea what enforced 75 years of peace within a thermonuclear planet.  And, this is coming to an end, right.  So, my feeling is we've had what I've called, The Great Nap.  We've had 75 years to get out of shape, to forget what it means to be a country, why we have centralised institutions.  Nobody can even remember why we have journalists, because they used to put their lives on the line to get the story and follow certain sorts of codes.  Now, they seem to be a pox.

Peter McCormack: But you know why that is; again, that comes down to the money.  They don't have the money anymore.  Yeah, the internet changed things; it changed the economics of journalism and the economics of -- entertainment and eyeballs completely changed.  It's become about clicks, and we know that.

Eric Weinstein: But it's not about clicks.  Nothing sells journalism like Jeffrey Epstein stories.  And then you find people say, "Oh, people aren't interested in Jeffrey Epstein stories", "Are you kidding me?"

Peter McCormack: Well, there are random bits of great journalism; there are.

Eric Weinstein: I am failing.  I desperately want to be having a different conversation.

Peter McCormack: I don't know what the conversation is you want to have.

Eric Weinstein: Let's start from a different perspective.

Peter McCormack: Okay.

Eric Weinstein: Bitcoin fixes everything.  Now, you don't literally believe that, I don't literally; but somebody somehow thinks that this is a good slogan.  So, the question is, okay, assuming that it doesn't fix everything, assume that Bitcoin fixes a lot, okay; that is a statement I would be up for.  I think you guys would be up for it.  Do we get to get to a next thing, or does the Bitcoin culture…

You see, the tech culture should have fixed science, but it couldn't.  Now, Mark Zuckerburg and Yuri Milner came up with a prize, "Let's give $3 million to people who are really good at science".  Okay, that didn't do very much.  Why couldn't science's little brother fix science?  Well, in part because the ethos of software is, "We're here to destroy things that look old", okay?  And in some sense, that's where Bitcoin gets its energy, "We're here to destroy things that look old and diseased and flappy".  Okay, good on you.

Now, what does the lesson of that destruction teach?  Well, one thing it taught us in tech was, don't build a new university; disintermediate; do Khan Academy, you know?  So, you keep learning that lesson over and over and over again, but you never learn that there is sometimes that you want to go in the other direction.  In biology, this would be called Regulated Expression.  There's sometimes when you want to break something up; there are other times when you want to bring something together; and it's not always the same thing.

So, my question is, does Bitcoin, as a community, which of course isn't a community --

Peter McCormack: It is.

Eric Weinstein: But it's so tiresome.  Every time you say something, immediately somebody will just come back with, "No, you don't understand!"

Peter McCormack: It's because we're decentralised; we all have different opinions.

Eric Weinstein: It's because it's boring; I'm sorry to say.  It's just boring to go through --

Travis Kling: Go ahead and ask a question.

Eric Weinstein: Okay.  Is there a part of this community that understands time to build?  Time to build the sorts of things that look awful right now, that may become awful with time, they may degrade.  Maybe you had Edward R Murrow and CBS News and maybe CBS News got horrible, but there was a time where CBS News really mattered.

Right now, it's time to build some stuff to search for solutions to our problems; problems of economic distribution post-capitalism, post-communism.  What comes after both capitalism and communism; what comes, in life cycle terms, after the pill and reliable paternity tests; what comes in work after telecommuting? 

We've got 75 years of pent-up questions where we stayed in a stasis, where we're leading archaic lives in general.  And everyone knows that our lives don't really make sense anymore.  We have archaic money, we have archaic national stories.  It's time for something new and Bitcoin is a constructive story about destroying the old.  But I'm looking for more of a story, given that it's the money and the reason money is so important is that it's fungible and allows us to do everything else.

Right now, I would like to build a strategy for looking for human survival situations.

Peter McCormack: Maybe that can only be done in the fiat world.

Eric Weinstein: Maybe.

Peter McCormack: Maybe the story of Bitcoin is, the only way to win is not play radical individualism.  You know, a lot of them are anonymous.

Eric Weinstein: You just made the single best case for going back to something I don't want to do.  I don't want to go back into the fiat world; I want it to be Bitcoin and things of that nature.  If the idea is is that the Bitcoin kind of mentality is so rooted in not centralising, not having leaders, no trust; if the problem is that all of that is co-travelling, that is the overlearned message that comes from having to deal with central bankers, to dealing with lying activists posing as journalists, that comes from looking at citation cartels inside of academics, where people are just so deep in the political economy that they've stopped caring about these subjects.

Okay, so I keep hearing, "This thing is honest; it fixes things".  Well, the question is, does it?  Is there enough trust in this community?  Is there enough that's positive and pro-social that allow the wealth that has accumulated under this to now do beautiful, amazing things.

Travis Kling: So, it sounds like what you're talking about in some cases would be like patronage.  It would be like, what is the group of bitcoiners, if they become wealthy by owning a lot of Bitcoin, some subset of those bitcoiners are going to decide that getting human species living on other planets is very, very important and they're going to dedicate resources to trying to put that forward.  And, I think from a government perspective, I think part of the reason why, and there's plenty of Bitcoin folks that are more on the theoretical side of things, spend more time thinking about stuff like that, that have views of what this world is going to look like after Bitcoin "wins". 

But I think a lot of us are more focussed on, what is the path going to look like as Bitcoin gears up to increasingly fight the fight against governments and against fiat currencies.  So, there is some amount of struggle to imagine what comes after that, because we don't know what either the timing or the specifics around what that fight's going to look like.

Peter McCormack: Maybe we don't know, either.

Eric Weinstein: Well, I think you don't know, and let me be blunt about it; I also feel that people -- you know that part of that meme, "I just found out about Bitcoin and I'm here to save it", or something like this?  Maybe in part, I feel like I've been fighting some fight since the early 1990s and then Bitcoin comes around 2009, 2010 and it's the newcomer on the block.  I'm super excited to see it, but I want to go back to fighting the fights that I was fighting in the early 1990s, one of which is about inflation; let me just make very clear about it.  I don't think the economics profession knows how to measure inflation.

Peter McCormack: Oh, I think they know; I just don't think they want to.

Eric Weinstein: Oh, no, I don't think they know.

Peter McCormack: What, the economics department of the government?

Eric Weinstein: The Bureau of Labor Statistics is the ones who are tasked in the United States with publishing the CPI and the variants of CPI.  They are trained inside of the university system.  I don't think academic economists know how to measure inflation, even theoretically.  There are two ways in which they would like this number to go down, because when the inflation estimates go down, that means the tax brackets don't get indexed up; so, they get to tax us more and they get to give us less in terms of entitlements that are cost of living adjusted.

Now, the two things that they know to bring down that number, right, that CPI number that are clearest theoretically is, one, they say it shouldn't be a fixed basket.  So, imagine that we have tea and we have coffee.  If the cost of coffee goes way up because there's a frost, let's say, unseasonably cold temperatures in the coffee-growing regions; if I'm indifferent between the two, I just switch to tea; and if you give me the money needed to buy back even amounts of coffee and even amounts of tea, I'm going to use almost all of that money not to purchase coffee which is really expensive, I'm just going to buy tea because I'm equally happy, and spend the rest of cocaine, let's say; something.

In that world, you're not talking about a cost-of-living adjustment, because I should be able to say, "I only need to compensate you to make you equally happy; I don't need to compensate you to buy back whatever you had previously purchased, only to watch you use the money totally differently than I was expecting".

The other thing they know how to do is something called Chaining.  Now, chaining really just means going towards the continuum limit.  Instead of checking every year, I'm going to check every quarter; maybe I'm going to check every month or every day or every hour or every minute, and I'm going to compare the prices and quantities.  So, as you go towards that continuum limit, you get a different decrease usually in the rate of inflation.  But we don't know how to chain a cost-of-living adjustment, because then it ends up picking up your changes in taste.  And the dirty little secret of neoclassic economics is that, as soon as your tastes change, the entire theory of human welfare in economics falls apart, okay. 

So, what they've done is they've got an elaborate -- do you remember seeing this picture of J.Lo in the Versace dress, right?  So, nobody can figure out exactly how this thing is staying together.  It seems like the tiniest stitch goes wrong and the whole thing blows apart.  That's modern neoclassical economic theory with respect to the changing preference hypothesis which is, they claim, "Just don't allow people to form different tastes from each other, or from themselves a minute ago, and everything will be fine.  But if you move, the whole thing is going to blow apart".

Now, as a result of this, yes, I'm going to make a very strong claim.

Peter McCormack: Go for it.

Eric Weinstein: Economics doesn't know how to calculate the rate of inflation, because they need something called gauge theory; and because they don't know gauge theory and because they don't understand inflation and because they want to preserve the freedom of the Bureau of Labor Statistics or of the Fed or whoever puts together GDP and productivity gauges, they want the freedom to make things up as they go along. 

I've been like, I want to take that freedom away.  You say trust?  We don't trust, we verify, right.  I want to disintermediate economists.  You're angry at all central bankers; I'm going to one-up you.  I'm angry at neoclassical economics who pretend that they know what's going on, and they don't know what's going on.

Here's a problem that I have.  I want to drive home to the economics profession that they not only don't know how to calculate inflation, but if anybody shows up who does understand gauge theory, who does understand how to calculate inflation, they will destroy that person's career so that they can continue to do what they do.

Now, if Bitcoin solves everything, help me construct something to show that the people who are tasked with constructing our rates of inflation and our rates of productivity growth are not using state-of-the-art theory.  I'm not even talking about how to turn this into something practical that can be computed every month.  Even their theory is wrong.

Peter McCormack: Why though?  We see the CPI calculations; we all know it's bullshit.

Eric Weinstein: You say we all know it's bullshit, but if we are all forced to pay our taxes relative to a CPI-adjusted tax bracket, if we are forced to expect our social security or Medicare payments, based on a cost-of-living adjustment, then in a certain sense it's not bullshit.

Peter McCormack: But, how are you going to enforce that?  How are you have the policy changed so you do?

Eric Weinstein: I'm trying to get into a fight with the economics profession, because I know things that they don't know how to do.  And they want to say that they're in a position to peer review me.  I'm saying, "Okay, great, let's do it out in the open.  Send me your smartest economics, whoever she or he may be.  Is it Janet Yellan; is it Paul Krugman?  Send me whoever the smartest economist --"

Peter McCormack: Definitely not Janet Yellan!

Eric Weinstein: Maybe it is Janet Yellan; who knows?

Peter McCormack: Krugman hates Bitcoin.

Eric Weinstein: It doesn't matter; I'm trying to say something to you guys.

Peter McCormack: No, I know, I hear what you're saying.

Eric Weinstein: Okay.  They don't know how to calculate inflation, they don't know gauge theory, they don't understand why the marginal revolution ends up in gauge theoretic economics.  They've lied about preferences, they've lied about tastes.  They've gotten so much firepower behind this lie that our tastes don't change and they're the same between you and me.  This was written into a 1977 paper by two supposed Nobel Laureates, Becker and Stigler, called De Gustibus Non Est Disputandum and they said, "The tastes are like the Rocky Mountains.  They are unchanging and they are the same to all men".

F these people, seriously.  I'm just tired of this.  These guys aren't that smart; they don't know that much maths.  They go into every other field, they have something literally called The Economic Imperialism, as if this is a great thing, and they will write, "We know more maths, so we have the right to invade every other subject".  Time to invade economics, gentlemen.

Peter McCormack: Let's go.

Eric Weinstein: Yeah.

Peter McCormack: All right.

Eric Weinstein: But what I'm trying to say is, it's the economic heft of the Bitcoin community that can make this happen.  I've been trying to do this through intellectual interchange since, I don't know; almost 30 years.

Peter McCormack: How do we know you're right and we should put our weight behind you though?

Eric Weinstein: Well, I wouldn't trust, I would verify.

Peter McCormack: That's what I'm trying to do first.

Eric Weinstein: I know.  But what I'm trying to say is that --

Peter McCormack: Who else are you talking about gauge theory with?  Where is the gauge theory movement, or is it just you, the solo warrior?

Eric Weinstein: More or less.  I mean, Juan Maldacena wrote an article about this when he was given the $3 million prize.  He did not initially cite our work, but he did after he was reminded that he did not originally cite our work.  But, yeah, it's just me and my wife.

Peter McCormack: Could you be wrong?

Eric Weinstein: We can find out.  You see, if we were to take, for example, the Boskin Commission, which was the first attempt to revisit the construction of the CPI from the perspective of senior economists tasked by the government --

Travis Kling: What year was that?

Eric Weinstein: 1996, something like that.  In the beginning of their report, they tried to show why we needed to move towards cost of living and they had a too-good two-way example, maybe chicken and beef, and two sets of prices.  Well, if you hypothesise that the consumer was given by the most common form of an idealised preference map, called Cobb-Douglas function, preferences would had to have changed between the two periods that the Boskin Commission worked on.  I can back that out.

They can't linearly interpolate prices and preferences given by the Cobb-Douglas linearly between time zero and time one, and compute the rate of inflation, because they claim that the index would not exist, technically called a Laspeyres CONUS index.  If you allow the CONUS index to have changing preferences, they can't compute it.  We can; I can give you a number, and then you can ask, "Well, maybe they can compute it?" but I can promise you that in their literature, they claim not only haven't they computed this, but that it is impossible; the work of Fisher and Shell claims that it is impossible to have a changing preference in that cost-of-living adjustment.

Travis Kling: The answer is the US Government doesn't want the accurate measurement.

Eric Weinstein: I wouldn't say it that way.  I would say they don't want something where they're not allowed to toy with it by construction.  So, my goal and your goal --

Peter McCormack: Or, they want to control the money.

Eric Weinstein: Well, this is where our commonality and our difference occurs.  So, my perspective, and I'm not smart enough to come up with Bitcoin; it's an ingenious thing; never thought about it; we were smart enough to come up with the fact that they don't compute inflation correctly and they don't compute productivity correctly, because they don't know enough differential calculus, to be blunt.  And, because they don't know enough differential calculus in order to make these computations, they've retained rights.

Well, who knows; maybe we're do a little bit of an adjustment, maybe we'll do a little bit of outlet bias, maybe we'll do a little bit more chaining; and so, by saying that it's an art, it's not a science, there's nothing absolute, they've retained the freedom to mess with our money and to mess with our statistics.  So, this is really when I come to you from. 

My context is, well, you want to show me how brilliant you guys are?  Shut down not only the economists at the Fed, but also shut down the Bureau of Labor Statistics, the hand-chosen experts.  I'm going to claim right now, I don't think Paul Krugman knows how to do a cost-of-living adjustment with chaining towards the continuum if preferences are shifting.  I don't think that this field is mature enough intellectually to peer-review its own challenges.

Peter McCormack: Well, I'm just going to be honest.  We just did a whole 15-minute segment where I had no idea what you were talking about; it was a whole different world!  But I think I get what you're saying is, let's prove them wrong.  I don't understand gauge theory --

Eric Weinstein: I don't know, and you guys say things, again; you can say, "We don't", but Bitcoin solves everything.  I'm getting bored of this.  If Bitcoin solves everything, hey, here's something right in your wheelhouse. 

Peter McCormack: Bitcoin can't fix that; that's people who fix that.  What you need is people to help.

Eric Weinstein: I don't know what "Bitcoin fixes everything" means.  What does Bitcoin fixes everything mean?

Peter McCormack: It's a meme.

Eric Weinstein: Okay, what does that mean?

Peter McCormack: The meme means, fix the money, fix the world.  The biggest problem in the world at the moment is --

Eric Weinstein: Sorry, but I still don't understand.  It means something.  I'm a literal guy, right, one of these guys on the autism spectrum.  What does it mean?  Are we fixing things, because I would imagine that one of the first things that bitcoiners would want to do would be stop economists from computing the rate of inflation however they want?

Peter McCormack: Yeah, they are attacking that.

Travis Kling: No, I would agree with that.  To Peter's point about, it's people and government that right now, the way it's structured, can effect change in that way; and I think you slowly, over the coming years and decades, are going to have increasingly more individuals that align with Bitcoin's potential and its principles that will enter into the US Government.  And at some point, you may be able to get some status quo around that.  We're starting to make progress.  Cynthia Lummis, Senator from Wyoming, she's on the Senate Banking Committee; a card-carrying bitcoiner.

Peter McCormack: Do you know what it is?  It's the narratives that we have --

Eric Weinstein: Wait a second.  What you just did there; I don't want to do that.  That's the same thing that got us into trouble with Elon.  A card-carrying Senator?  If we're serious about this, F the Senate.  I want to put this idea directly across to you guys, because I want to hear it fail in the right way.  I want to go to war with the idea that the economists are intellectually capable of doing what they say they're doing.

Peter McCormack: Well, you should sign up to Marty Bent's email.  Listen, these conversations are happening, but they haven't gone mainstream.  It's the bitcoiners talking about them.

Eric Weinstein: I understand this, so I'm coming back to this.  Right now, I want to make a frontal intellectual assault on the Bureau of Labor Statistics' rights, ability and intellectual capability to calculate rates of inflation according to a theory that they have in fact got wrong.

Peter McCormack: Let's fucking go!

Eric Weinstein: Okay, I don't know how to do that.  I've been trying to do that since -- this is where I come from, right.

Peter McCormack: Okay, you understand the theory, maybe you need some PR. 

Eric Weinstein: Maybe; but Bitcoin solves this, Bitcoin fixes this.  In other words, every time I try to lean on Bitcoin fixes this, the podium gives way.  So, I just keep thinking, okay, here I am trying to lean on Bitcoin fixes this --

Peter McCormack: Yeah, but you're confusing what humans can do and what a protocol can do.

Eric Weinstein: Sorry, I don't really understand this.  Are we in agreement that one of the greatest reasons for Bitcoin's success is that we're afraid of a printing press?  I am afraid of a printing press; you guys?

Peter McCormack: Yeah?

Eric Weinstein: Okay, great.  One of the reasons I'm afraid of the printing press is redistribution.  Another reason is inflation.  Some of those are connected.  Would we agree that humiliating those economists who tell the rest of us to F off -- we're smarter than they are.

Peter McCormack: I think I know what you're saying.  Travis, think of it like this.  We all know that inflation is calculated in a subjective way that allows the money printer to go on, right?  We've had the energy FUD recently and whether you agree or not with what Michael Saylor did, he was trying to build the narrative so that we actually have the data so when anyone, that fucking idiot, Sorkin, from the New York Times, or the people of Bloomberg, or the FT, when they go and print their bullshit, we have to go, "No, we have actual data here.  You're entirely wrong", and we have data that both allows us to look at the miners ourselves inside our industry, but compare it to other industries, so we can go, "You are wrong".

So, I think what Eric is saying is similar.  We all know inflation's bullshit; we keep saying it.  Krugman put something up on Twitter and the bitcoiners piled in, but we don't have the actual data to go, "Here's your --"

Eric Weinstein: Well, there's the data and there's also the theory.  Really, what would be very valuable to me is I would like to get into a fight with any leading economist.

Peter McCormack: Well, the bitcoiners will be with you for that.

Eric Weinstein: Okay, I don't know that they will or they won't, right, but we'll find out.  My claim is, is that the theoretical basis of a cost-of-living adjustment, which is what they say inflation should be based on, cost-of-living standard; if you chain a cost of living with changing preferences, the current theory collapses.  They want a chain and they want a COLA and they want to measure the inflation, they want to tell us where to get off.

My feeling is, "Over my dead body; you're not intellectually competent".  Now, that's a huge statement.  I'm not an economist by any standard measure.  I'm willing to go on this show and say I'm an economist, simply for the pleasure of getting an economist to say, "That guy doesn't know anything about economics; he doesn't know anything about theories of inflation".  Right now, I want to drag this back to an old fight between Irving Fisher and Ragnar Frisch.  Irving Fisher wrote down a whole bunch of axioms that said how you measure inflation and Ragnar Frisch said, "You know what?  If you impose all of those axioms, there is no gauge that will work.  I can prove that there will be no gauge that will work of inflation".

The resolution of that is that one of Fisher's axioms was wildly off and it says that, "If prices and quantities begin and end at the same levels, rate of inflation should be 1.00, ie no inflation".  Fisher was wrong about that.  That's coming from what I call The Flat Earth Society of Economics.  What I'm trying to say is, you guys are rich, you're powerful, you're in the headlines all the time, you're whining and complaining about inflation.  I don't want to whine and complain about inflation; I want to go pick a fight with the supposed people who tell us that they're smart enough to manage our economy.  And all of these people that go out to Jackson Hole, Wyoming, in the summer and who put on suits and ties and have these resonant baritone voices and tell us what reality is and isn't, I don't think they're that smart.

Peter McCormack: Go find a way of selling it then.

Eric Weinstein: No.  I don't know how to fix everything, but Bitcoin does.  And so, what I keep trying to say is, you're rich, you're focussed on inflation and you don't like to be told what to do by people who are dumber than you are who have beautiful titles and they sit in fine chairs at wonderful institutions. 

All I'm trying to say is, I don't know; do you guys want to do something or not?  If you don't want to do something, feel free; we can sit around whining about inflation and the fact that they don't know how to compute it, or we can actually take the fight to them where they live, because they're not intellectually capable of actually returning fire.

Now, I can't figure out how to get this issue off of my plate and onto yours, but if I were you, I'd go directly after the Bureau of Labor Statistics and say, "You guys are using, what, a chain Lespeyres CONUS COLA something?  How do you come up with this basket?"

Peter McCormack: But this is the point.  You get into these areas with these people --

Eric Weinstein: I don't care.

Peter McCormack: But you do care.

Eric Weinstein: No, but I don't.

Peter McCormack: You can't do that.  Eric, you can't, "I want this war" and then --

Eric Weinstein: I can write something down and show you exactly what you're talking about and then you can say, "Oh, it's over my paygrade".  And then somebody else can say, "It's too complicated" and somebody else can say, "This isn't data driven".  Okay, then Bitcoin can't do everything.

Peter McCormack: You want to go and pick a fight.  I'm telling you you've got to make it a way that's easier to digest and understand.

Eric Weinstein: You guys figure that out.  No, I can write down what I'm saying mathematically and somebody in the community can figure out what I'm saying; but that's not the energy behind it.  The energy behind it is, I take you guys literally when you say, "Fix the money, fix the world", or, "Bitcoin fixes everything", or, "What we're really against is central banking and hyperinflation", etc.

Honestly, I don't see you guys as being part of the fight against neoclassical economics.  I see you guys talking about Austrian Economics amongst yourselves, but in order to flex this stuff, you actually have to beat them.  And I'm going to say it in terms we learnt from Morpheus.  Morpheus says something to Neo like, "I'm not going to lie to you, Neo.  Anyone who's ever stood his ground to fight an agent has lost and died".

Everyone who takes on neoclassical economics, maybe with the exception of Daniel Kahneman, fails; we don't know why.  It's time to take this thing on, gentlemen, and what I really mean is, it's not that smart.  We need to basically make the point, Paul Krugman isn't that smart.

Peter McCormack: I think we're all in agreement on that.

Eric Weinstein: He's pretty smart.  He's not Ken Arrow.  Ken Arrow was really smart.

Peter McCormack: He's smart if you believe his Keynesian Theory of Economics.

Eric Weinstein: It's not that; he became something else.  He was really a pretty great economist; it doesn't matter.  What I'm trying to say is, it's time to pick a fight with neoclassical economics, and I see you guys as being sort of inward-looking.

Peter McCormack: I don't think that's fair; we're definitely outward-looking.

Eric Weinstein: All right, well then let's pick a fight with these guys.  Or, you know what, I don't really know where we are.  More or less my feeling about this and the reason that we're on the show and to talk about markets is that I am convinced that we are being called upon to create something that isn't capitalism, isn't communism, doesn't use fiat money, that understands how many unincorporated externalities exist in markets, that understands the danger of markets as a runaway automated process. 

As much as I hate having Janet Yellan tell me what to do, I also hate the idea of being hooked up to a potential doomsday machine, which can't be interfered with, if it starts to become that AGI that we worry about being told that it has to make paperclips.  One of the great dangers of Bitcoin that we're seeing is, maybe the idea of having something so decentralised actually winds up undoing everything, because effectively there isn't anyone in control.  We don't know.

Peter McCormack: Maybe we do need to unwind everything?

Eric Weinstein: Maybe.  You say that casually.

Peter McCormack: No.

Eric Weinstein: You've got kids.

Peter McCormack: No listen, look, I don't know the answer.

Travis Kling: Part of this is like Balaji's line of thinking, is that you're going to undergo this multi-decade reorganisation of how groups of people come together and that the internet makes everybody that you can just come together in these communities that have much more acute belief systems; and that just over time, the concept of a nation state is going to start to dismantle and people are going to be -- local is going to matter more, because it's who you're physically around, but you're going to spend more and more time in a digital space, and you're just going to choose very specifically who you're going to connect to in that digital space, and TBD on…

I think you imagine 50 years from now, lots of little factions, and where war fits into all that, I wouldn't pretend to know.

Peter McCormack: You know what Breedlove would be saying here if Breedlove was -- he'd be talking about the logic of violence and that technology changes the logic of violence and, you know, not always can we say it's for the better.  Sometimes for the worse; sometimes for the better.  Maybe we are just having to go through this shift right now.  We can't change it.  Maybe the forces at hand are too big.

Eric Weinstein: Maybe, but right now I'm feeling like we don't have much time.  And by not much time, I mean a few hundred years at the outset, so it's not like by next Thursday, we'd better have a solution.  But I do think we're playing Russian Roulette as of now; it's just the gun has an enormous number of chambers that are hollow, that are empty.  As a result, it feels like we have a lot of time, but really what we have is that we have a very small amount of time.

Peter McCormack: What's the action, then; what are you saying next?

Eric Weinstein: What do I want to do next?

Peter McCormack: What are we doing next?

Eric Weinstein: I want to get institutions that can actually pay people who are heterodox and I want to redistribute fuck-you money before we redistribute regular money.

Peter McCormack: You should come down to El Salvador and see where that's being redistributed to change things there.  It's interesting; I'll talk to you about it after this.

Eric Weinstein: I'm interested, but I really think that the biggest problem is that the people we need to be fat and happy and working on next level stuff are, in general, under somebody else's thumb.  And so, one of the things that's really important to me is giving more people use of their middle finger who are actually trying to build and do things.  In general, what I find is that there isn't a lot of ethos around making…

I want to empower the people who are going to take down these structures, who actually maybe know what they're doing or what they're talking about; differently than I want to empower everybody who has the ability to get rich.

Peter McCormack: Well, listen, what I will say and I think a thought to leave you with is that, what I know amongst the bitcoiners is they don't trust and they're very distrusting of the education system and the institutions and the media industry, etc.  They get really fucking rich and they do distribute their money and they maybe are distributing their money to projects they care about, like interesting, different kinds of projects.

Eric Weinstein: So, I can't imagine that they don't want to take out neoclassical economics?

Peter McCormack: You can't speak for individuals or them as a group, but there will be someone.

Travis Kling: A lot of them are going to hear this, so that's a good start.

Eric Weinstein: Where's the well-heeled group that wants to tell neoclassical economics to shut the hell up?

Peter McCormack: Hey, listen, a lot of them will, especially the Austrian Economists.

Eric Weinstein: Okay, so that's one thing that's really important to me.  The other thing that's really important to me is, we've got to get back to science.  And, if everybody's worried about losing their job every time they open their mouth, they didn't say something that was diverse enough, inclusive enough --

Peter McCormack: Oh, we all agree on this one.

Eric Weinstein: No, we don't.

Peter McCormack: No, WE do.

Eric Weinstein: We do, but look, I don't have the money to found a new science institute.  So, let me know when one of these people who does have enough money to found a new science institute founds a new science institute.

Peter McCormack: How much do you need?

Eric Weinstein: Hundreds of millions; what have you got?

Peter McCormack: Well, it's pocket change for a few of our friends.

Eric Weinstein: No, it's not pocket change for anyone.  Having hung out with billionaires, I now can say one of the sad features that I did not -- because I didn't hang out with billionaires until 10, 15 years ago at all; I didn't know any.  Nobody's got a spare $1 million.  You hear, "Oh, $1 million is nothing to him.  That's like chump change".  No, I've now met enough people who are seriously rich to tell you that $1 million is not chump change to any one of these people.

So, Mike Lazaridis endowed the Perimeter Institute for Theoretical Physics; was it Citigroup did the Santa Fe Institute.  I don't see anything that is trying to endow something new.  Bill Gates, who came from the traditional untraditional economy probably did more trying to get Sal Khan and the Khan Academy going on than I've seen the energy coming out of the Bitcoin universe.

So, my feeling about this is I'm somewhat watching a different version of the tech money, where the tech money came with the tech ideology, "Software eats the world", and that was inhibitory of any attempt to actually rebuild the world.  Why rebuild the world if software's there to eat it?  Well, in some sense, the problem with Bitcoin is that it's going to put the money in the hands of people who understand that certain central features need to be decentralised.

But there are other things that need to be recentralised.  That's going to be a much harder lesson to a group of people; and trust is important.  Yes, it's true that sometimes you can't trust other people, but sometimes you have to.  And if you can't figure out how to get to trust, to recentralisation, to building; in some sense, you're just one more utopian community that came through promising everything to everyone and you couldn't deliver.

So, the reason I stay on this is that, when somebody says Bitcoin fixes that, Bitcoin fixes everything, I get real dumb.  I say, "Great, because I've got a laundry list of things", and then people say, "Oh, well Bitcoin can't fix this".  Then shut the fuck up!

Peter McCormack: Yeah, but it's a meme though; it's a meme.

Eric Weinstein: Actually, it's not a meme.

Travis Kling: I understand your point.

Eric Weinstein: Because, when you say that, what you're doing is you're playing the Martin Bailey game, "Oh no, we didn't really mean that", yes you did.

Peter McCormack: Semi mean it.  It's a meme.  You know memes are exaggerations.

Eric Weinstein: So, I get really dumb.  Maybe you mean it, maybe you don't; do you?  I think you don't.

Peter McCormack: Well, some people do.

Eric Weinstein: I don't think they mean it.  I think the people with Bitcoin wealth don't mean it.  I think the point is that when it comes…  We have a huge number of problems.  Now, the reason I bring up the inflation problem is that it's the clearest indication to me that the community doesn't even care about what the community cares about.

Peter McCormack: Yeah, again, I disagree with you.  I mentioned Marty Bent; he's regularly talking about this, and there are other people having the conversation.  They care about the inflation problem; maybe they just don't want to attack it the way you do.

Eric Weinstein: That's fine, then it doesn't fix it.  We're not understanding each other.  What I'm trying to say is I happen to be in possession of a piece of knowledge and that is, all of neoclassical economics is vulnerable to the changing preference problem and ordinal welfare theory.

Peter McCormack: This is a claim; this is your claim.

Eric Weinstein: Yeah, but it's a mathematical claim.  I can show you the paradox it results in.

Peter McCormack: Yeah, but what's the process it should go through; is it paper, peer review, test it?  It has to be sold to people.

Eric Weinstein: Okay, assume that I give you a paper.

Peter McCormack: Yes.

Eric Weinstein: Forget about peer review; assume that I give you a paper which shows what the solution is, shows you places in the literature that says that this problem can't be solved.  So, on the one hand, it's a backwards-compatible solution that is claimed; and another, it's claimed that no solution can exist.

My point isn't about gauge theory economics in this particular issue.  This is an opportunity to show you that the economists are not honest.  They are not the experts and they are not honest.  Their process of peer review should naturally result in this thing being accepted.  Yes, it does everything that the old system could do, plus it does new things, plus it contradicts the claim that we made in our literature that this is impossible.

Now, what is the goal of that?  The goal of that is not even the construction of an inflation gauge.  It is to say, "You economics are not the experts on markets; are we clear?"  That's the point.  It's going on offence against the world's most offensive community.  This is the world's number one offensive community intellectually.  No other community that I'm aware of would put imperialism after their subject matter.  Can you imagine biologists talking about biological imperialism?

Peter McCormack: I wouldn't imagine thinking about that.

Eric Weinstein: Yeah, well what I'm trying to say is economists talk about economic imperialism.  It's time for them to suffer a serious intellectual defeat so that the rest of us can get at our own economy.

Peter McCormack: But the intellectual defeat has to be one that works; it has to be.

Eric Weinstein: I can't say it a million times.  There's a problem of the theoretical construction of an inflation gauge.  Currently that is something called a CONUS index.  You either know about CONUS indices or you don't.  If you don't, that's fine.

Peter McCormack: Nope!

Eric Weinstein: Cost-of-living adjustment is based on a CONUS index.  CONUS indices are based on welfare, a theory of welfare.  Then there's an issue of something called Chaining.  Are you familiar with chaining?

Peter McCormack: Nope.

Eric Weinstein: Okay, so chaining and cost-of-living adjustments are the two ingredients here and they're based on a theory of preferences over market choices.  I want to show that this community is too intellectually corrupt to manage our markets.  That is my point.

Peter McCormack: But take my feedback, okay.  I think the pieces that you are missing is a way of the average person being able to digest this, because I think a lot of people know that this is important.

Eric Weinstein: So, send me a bunch of interns and we'll do it in a studio and you guys will tell me.  I don't want to do this.  What's boring me about this --

Peter McCormack: Yeah, but you're contradicting yourself now, because you said, "I want to go to war".

Eric Weinstein: Yeah.

Peter McCormack: Well then, hear me out.  What I'm saying is, the piece you're missing is a lot of this stuff just goes over people's heads.  You talk about a whole bunch of concepts and bring them together and honestly I'm like, "What the fuck is he talking about?"  Am I an idiot, or it's like everyone?  What I'm saying is all you need is a way of making that translate.  Trust me, it's someone whose job it is.  I am known for doing a show that gets people to break things down so the everyman can understand it.

Eric Weinstein: Do you have a whiteboard?

Peter McCormack: No.

Eric Weinstein: I'll do it right here for you on a whiteboard.

Peter McCormack: Travis has to go to dinner!

Travis Kling: Next episode!

Peter McCormack: I'm not with you, I'm not against you; what I'm saying is, if I don't understand, I don't understand.

Eric Weinstein: Well then, maybe it's pointless.

Peter McCormack: No, you're giving up.

Eric Weinstein: It's not that I'm giving up; I have to figure out where -- let me give you my calculation.  My issue is, I have a different issue than the rest of you.  Many of you guys don't want to be under anyone's thumb.  The libertarian wing of your community is like --

Peter McCormack: Well, I've agreed I'm not.

Eric Weinstein: I know.  "Don't tell me what to do, man"; I have some of that in me, even though I'm not a libertarian.  But my feeling is slightly smaller.  My feeling is, if you're dumber than I am and you're not public-spirited, I don't know want your hands on the wheel.  If you're smarter than I am and you're public-spirited, we can talk about it.  But if you're dumber and you're not public-spirited, there's no way in the world I want you telling me what to do.

Peter McCormack: What if you're dumber and public-spirited?

Eric Weinstein: I don't think they are dumber and public-spirited.  It's an interesting puzzle.  What if they're smarter and not public-spirited?

Peter McCormack: All I'm saying is, we could do circles.

Eric Weinstein: I know, but I'm not interested in that.  What I'm interested in is, I want people who are currently pretending that they know enough about the economy to be forced to admit, "Yeah, we don't know how to do stuff".

Peter McCormack: Yeah, and what I'm telling you is that I think to get there, in my personal experience, you need to find a way of making this so everyone can understand; and when I say that, so you don't get --

Eric Weinstein: No, it's not that.  If I have a board and we spend an hour and a half --

Peter McCormack: Next trip!

Eric Weinstein: -- then the objection becomes something else.  My feeling is I'm 55 years old.  I'm going to be checked out -- in 40 years' time, I'm out of this place.  I don't want to have a non-convergent conversation.  What I want to do is to disintermediate the people who've stepped forward and said, "We are the smart people", and my feeling is, "No, you're not".  And part of celebrating Satoshi…

Janet Yellan isn't our A-team intellectually.  I don't know who Satoshi is, but Satoshi, in the internet language, Satoshi is great than Yellan.  So, this is supposed to be the smart kids?  I want to go to war with the theory that has us under somebody else's thumb, because whether it's Paul Krugman or Martin Feldstein thing in the old days, somebody's always telling us; Alan Greenspan, "Okay, the oracle has spoken".

I'm anti-oracle.  And the most important thing to being anti-oracle is to say, "You guys always claim that you're the smartest people in the room.  You claim that you have the right to be in sociology, in psychology, in every field weaker than you are".

Peter McCormack: Are you talking about us?

Eric Weinstein: No, the central banking, neoclassical economists.  So, I keep thinking, "Okay, so you guys have a problem with my enemy, so you're supposed to be my really close friends".

Peter McCormack: But we are; that's why I wanted to have this conversation.  Everyone's going to listen to this.

Travis Kling: I think there would be a general view amongst a lot of bitcoiners that you wouldn't effect change by calling them out.  Go log onto YouTube and watch a Jerome Powell live press conference and in the comments section on the YouTube video, all it is is people going, "Money Printer go brr" and, "Buy Bitcoin".  And you sit there and you go, "Bitcoin, if it succeeds, is going to dismantle all of this".

Calling it out, whether or not it's with a research paper, or whether it's just yelling as loud as you can, it's not going to make them change.  They're not going to change their actions.

Eric Weinstein: Put some money behind it; you guys are money people; you love money; you talk about money constantly.  I keep talking about this technology; people bang me on the head, "Hey, Eric, wake up; it's money".  Okay, it's money, you're rich; you're so incredibly rich, you bought planes with your Bitcoin; fantastic.  You bought private islands; love it. 

Why don't you put some money into disintermediating the people who are constantly going to keep you sidelined?  You're not doing that.  Or, why don't you put some money into physics research trying to get us off the planet?  You're not doing that.  So, then the point is, okay, but I bought my mother a new house.  Awesome, wonderful, "But don't you understand; that's freedom?"  I get it.

Peter McCormack: I think that narrative is miscategorising a group.

Eric Weinstein: Please, tell me.

Peter McCormack: Of course, some people are going to buy themselves some nice things, but the point being --

Eric Weinstein: Who doesn't want to buy themselves -- that's not my point.

Peter McCormack: They've got different agendas from you maybe?

Eric Weinstein: Okay, this is just irritating for the following reason.  When you have a leading brand, which is, X solves everything, and then you don't want it to get hit and you say, "It's just a meme", and then you say, "Actually, the community this…" and then you say, "Actually, I task the community…", "Actually, there is no community".  Okay, is this all quicksilver?  "Well, so-and-so speaks for our community", "Really?  They speak for you?"  "No one speaks for our community", "Oh, shit".  "We don't trust, we verify; oh, but we trusted Elon; oh, but now we don't trust Elon".

Okay, let's calm down.  What is a statement; what does Bitcoin fix; and who do you trust; and where is the community; and who, more or less, is thought to be an important voice in it; because otherwise, it's just the contradiction of the last thing somebody said?  "You should read Saylor", "Does Saylor speak for the community?"  "Not at all".

Peter McCormack: The reality is, it's a moving feast; it changes it, evolving shape.  It's like, I don't know, like a brain.

Eric Weinstein: Terminator 2.

Peter McCormack: And it's learning -- yeah, Terminator 2.  Yes!  I tried to break into the cinema to see that, because they wouldn't let me in!

Eric Weinstein: Okay, but the Terminator 2 thing, so it's shapeshifting, it's quicksilver; you don't understand it, you understand zen.

Peter McCormack: It's learning.

Eric Weinstein: That also makes it much less interesting.  I mean, in part, the idea is, I very specifically don't think that we're going to get rid of government.

Peter McCormack: Yeah, I agree.

Eric Weinstein: I don't think we're going to get rid of all fiat currency, for various reasons.  I do think that we have an upcoming rendezvous where sovereign -- I think there's going to be a lot of pressure to make Bitcoin highly regulated.

Peter McCormack: It already is in places.

Eric Weinstein: And, it's really bothers me about what's coming.  It's one of the reasons why I wanted to disintermediate the blockchain, because I didn't want things to be traceable, even if everything was anonymous.  Then I understand, okay, we founded it on this and so, if you take that away, you're attacking…

At the end of the day, it's very intellectually unsatisfying to be caught in the same conversations when you see a world that you want to get to.  And every time you try to hit one of the claims of the community that you think that can get you to the next level, you run up against a different claim of the community.  And so, that's part of what the frustration is.  The part of the frustration is, is that I saw Bitcoin really early on and got wildly excited about it, and I wrote this thing; please check out, Go Virtual, Young Man.

Then, it just doesn't -- the same world; I'm still looking at the same world.  I'm looking at a different group of people that have gotten control over their own lives by believing in something heterodox that worked and I think that's beautiful and it's wonderful.  But, man, I was excited about this beyond that.  I was excited about this as a society world-changing event.

Maybe the problem is, I got excited in 2010 and I got excited because I thought that Bitcoin was more.  In my own mind, I saw distributed computing as, we can port the conversation laws of the physical world into the digital layer; we can re-establish ourselves in some reflection of ourselves inside of our computers; we can take the network of computers and turn it into something like the space-time substrate; and we can have, just as gold travels on the space-time substrate, we could have digital gold travelling here, and gold has no stench so we can get rid of the stench.

That was my thinking and then I had this idea that from the early 1990s, markets are just gauge theory, and you know what?  Gold, which is a physical system of quarks and leptons, is also just gauge theory.  And there's some sort of beautiful hope that we would do something that would be radically different, that would be beyond capitalism, beyond communism, beyond this planet and really reflect on some sort of world-changing potential.  And I guess the thing that I'm seeing is it's just, okay, somebody came up with a new fucking meme, or laser eyes, or, "Toxicity's our best feature, because it tells people who don't belong here to go away".  Whatever, I'm getting fucking tired.

Peter McCormack: Listen, we do have to get near to a wrap-up, because the man has a dinner booked and these guys are over.  I'm going to finish, but I think we can always come back to this.  Memes are powerful, so I would defend memes, but do I agree with them all the time?  No.  Do we take things too far?  Sometimes.  But this is a decentralised, moving beast.

But the thing about Bitcoin that's great, Eric, is that everyone has the freedom to do what they want.  If you want to do this, you can go and do it.  My only feedback to you is that, I'm not the smartest man, but I am a fucking good salesman and maybe there's another way to sell this to people.

Eric Weinstein: Sell what?

Peter McCormack: Sell the approach to attacking the neoclassical economists; maybe it just needs sharpening.  We, as bitcoiners, we need to sharpen our tools sometimes.  We make good arguments and bad arguments.  Maybe the arguments that you want to build, they just need sharpening in a way that is digestible by a large group of people, because I would imagine, when people listen to this interview and I think it's been very different from what I expected and a lot of fun, but on this point, I could imagine, and I could be wrong, but I imagine some people say, "I got lost; I didn't understand it".  I've got a good gauge for that; that's my gauge theory!  I've got a good gauge for that, so maybe that's what it is.  But time to digest it, I think.

Eric Weinstein: Well, you know, my guess is that this is going to land in some way where people are just going to go back to their snap-to-grid perspective, "I heard a bunch of stuff and it didn't really speak to Bitcoin" or, "This guy, he's against the community; he doesn't understand toxicity".  That's tiring. 

What I'm really excited about, let me just be very clear about it.  You've got the world's greatest recent innovation, by some measures, and it's doing an enormous amount for an enormous number of people.  Unfortunately, it comes with a little bit of ethos which is, it lends to a simplification, namely, "We can get by with memes; we can get by with slogans; toxicity's our friend; verify, don't trust".  These are not things that are mature enough to replace the corrupt structures that I think are within its reach.

So, my feeling is, I wanted to align myself, not necessarily to become this community, but to align myself with this community for fighting our common enemy which is, allowing in general much older people, who do not understand what pressures we're under, to continue to direct our society from positions of power.  And my concern is that for some reason, the memes are hollow.

If Bitcoin can't even go after the neoclassical economist who populate the Fed in an area where they are totally vulnerable, which is the topic of inflation, for which Bitcoin -- I mean, this is Bitcoin's killer product.  Its killer product is that you can hide from central bankers who are living through some MMT fantasy; you can short central bankers using Bitcoin.  My feeling about this was, "Hey, it happens that they don't know how to compute this".  It could be that they did know how to compute this, and that they still didn't want to compute this, in which case I would have nothing to offer.

But by virtue of the fact that they can't compute this, and it's in your wheelhouse, and you're not even going after that, you're not even asking the right questions, it's like, "Well, Eric, can you sell it?"  Well, why don't you send me a team of salespeople.  Go take some Bitcoin and go buy a team of salespeople and tell me what I need to sell and then tell me a bunch of visual stuff that I need to do and go buy the visual stuff; then hold a conference and have a prize.

But ultimately, I would like to stop listening to Paul Krugman, and it's very important that we find the thermal port on the economics Death Star that our aim be true.  And gentlemen, I thought that was what the Bitcoin community wanted to do.  Why are you and your X-wing fighters rocketing down the canyons on a Death Star header right for the exhaust vent and you won't even take your shot on inflation; are you guys kidding me?

Peter McCormack: No listen, look, we are.  We're just not seeing it the way you see it.  We're definitely going there, but look, it is part of our narrative.  But let's let people digest this, let's see what people say, because there will be some feedback on this, but thank you for coming.

Eric Weinstein: Thank you for having me.

Peter McCormack: I appreciated it; it was definitely a challenge and a test, but it was definitely worth it.  Travis?

Travis Kling: A pleasure, enjoyed the conversation.

Peter McCormack: Thank you for coming on, man.  Thank you to my man, Rich, for letting us borrow his studio.  I'm sure we'll do this again at some point.

Eric Weinstein: Insha'Allah, my friend.