WBD386 Audio Transcription
The Road to Hyperbitcoinisation with Knut Svanholm
Interview date: Monday 16th August
Note: the following is a transcription of my interview with Knut Svanholm. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
In this interview, I talk to bitcoin author Knut Svanholm. We discuss the road to hyperbitcoinisation and its impact on society, whether everything other than Bitcoin is a scam and why bitcoin's value always grows.
“If the game we’re playing is money, there is only one winner and the best form of money is that winner and that’s what bitcoin is… there’s no competition there.”
— Knut Svanholm
Interview Transcription
Peter McCormack: Hey man, how are you?
Knut Svanholm: I'm fine, thank you. Nice to be back on your pod again, Peter.
Peter McCormack: Mate, it's nice to have you back. We discussed a peaceful revolution last time.
Knut Svanholm: Yeah, I had to defend libertarianism without even identifying as a libertarian, or maybe I did.
Peter McCormack: Did you see what I tweeted this morning?
Knut Svanholm: Did I? That's a good question. Which one of them?
Peter McCormack: It's just interesting that you brought that up as an opening thing, because one of the things I'm really wrestling with right now is that I tend to read a lot of the YouTube comments on my podcast, and the reason I read them is they give me a good sense of feedback on ideas, opinions and topics I should explore. One of the really interesting things is that whenever I cover a particular form of governance, whether it's anarchism, libertarianism, statism, which is used pejoratively these days, there are always a bunch of people piling in with criticisms of it.
Trying to figure out governance is one the trickiest and most complicated subjects I think of our time right now, because people who are on the left, on the right, statists, anarchists, libertarians, they all believe their form of governance is right. When I was in El Salvador, I was having dinner with this girl who was even defending Marxism. So, everyone always has their form of governance they think is best and everything else is shit and trying to navigate that is so hard.
Knut Svanholm: Yeah, I think the trick is to find the tools to emancipate yourself; that's an important thing. I really enjoyed your interview with Katie the Russian.
Peter McCormack: Yeah, Katie the Russian.
Knut Svanholm: She's amazing.
Peter McCormack: She is and it's very tempting to get a second passport, just from my experience of travelling around the world and trying to get access to different countries and seeing how different countries treat each other.
I'm particularly looking right now at Cuba; I'm specifically looking at Belarus with what's happened with the targeting of the athlete in the Olympics who came out and criticised the team and they tried to forcibly put her on a plane back to Belarus and punish her. I'm thinking particularly of the guy in Ukraine who was just found dead who "suspiciously" committed suicide, perhaps it was disguised as a suicide. He ran, I'm not sure if it was a company or an organisation, but helping people flee Belarus and Lukashenko's dictatorship.
I'm consciously aware of all different forms of governance from democratic republics -- sorry, democracies to authoritarian regimes to monarchies. You can travel and see everything, right, and trying to navigate what is best is really fucking hard.
Knut Svanholm: It is. Was that a Freudian slip, democratic republics/democracy?
Peter McCormack: Yes, it was a slip! It's when people refer to the US as a democracy, others will snap back and say it's a federal -- is it a federal republic?
Knut Svanholm: It's a dictatorship with two dictators instead of one.
Peter McCormack: A constitutional republic, sorry that's the word I want.
Knut Svanholm: Yeah, constitutional republic.
Peter McCormack: Constitutional republic, there's a lot I like about the US. I do like the optionality you have to move between states for different forms of governance, but also the federal government is fucking shit.
Knut Svanholm: Speaking of that, I'm planning to take the car down through Europe in a couple of weeks and there are so many different rules for what you need in the car between Sweden and Germany and France and Spain and Italy; all the different countries have different rules and it's really hard. It's much easier to move around in the US.
Peter McCormack: I think in France, you need a breathalyser.
Knut Svanholm: A breathalyser? I have to look into that, I have three days.
Peter McCormack: I had to drive my dad to Spain once, because he won't get on planes. When we went to scatter my mum's ashes in Spain, I had to drive him and I'm pretty sure with France, I bought a kit in the end. I'm pretty sure there were breathalysers, the warning danger sign you have to have if you have a breakdown; I'm perfectly aware of that.
But this is the thing I'm wrestling with most right now; governance and what form of governance is net best for everyone. Being in the world of bitcoiners, it's very hard if you ever show any support for the ideas behind any form of democracy.
Knut Svanholm: I think regardless of what type of governance or no governance that you prefer, everyone views competition between these different types of governance as a good thing. You want the best ideas to survive and the worst ideas to go away as quickly as possible. So the thing that Katie's doing there, for instance, perfectly legally giving people the opportunity to get a second passport and surf the different jurisdictions, that's putting pressure on the government that loses the entrepreneur to the other country; all the incentives are aligned.
Peter McCormack: It's a great option to have.
Knut Svanholm: It is.
Peter McCormack: How many people can actually do that? Firstly, how many can (1) afford it, (2) have the life circumstances that allow it? Firstly affording it, it's expensive; she was saying $150,000.
Knut Svanholm: It is. Yes, something like that.
Peter McCormack: That's way more than the average salary for most people. Let's be honest, that's only an option available to high-income earners, who are usually capable of finding ways to avoid tax anyway if that's one of the primary reasons. Secondly, if you've got kids, you can't be a digital nomad with kids easily. I know some people do, but most people actually just want to be settled, they want their kids to be in a school with other kids they can hang out and they just want that stability.
Whilst it provides that competition with government, I'm not sure how much pressure it puts on, because I think it's a very small group of people it's open to.
Knut Svanholm: Yeah, but it's only one form of pressure. There's pressure on governments from other vectors as well. Bitcoin, to begin with, is a huge force forcing governments. It seems like they're getting worse because of it, but I don't really know how this will play out in the next ten years, but it will be weird.
Peter McCormack: If the J curve plays out, then we will see; we'll get to that because, what was it, three books you've now written?
Knut Svanholm: The first one wasn't really a book, it was just a compilation of articles; so that was like a prototype of a book.
Peter McCormack: Is it bound; does it have a front cover?
Knut Svanholm: Yeah, it does, so I guess you could call it a book.
Peter McCormack: It's a book, it's a book!
Knut Svanholm: Yeah.
Peter McCormack: You've been making these videos with our friend, Guy Swann, who has the voice of Bitcoin. You've been working hard at spreading the knowledge. We should dig into this, because I think this is a nice follow on from what we spoke about last time. Just to link back to what I was saying at the start, I'm struggling with governance. Democracy is a very hard thing; any form of statism is a very hard thing to defend in the world of bitcoiners, but exploring anarchism and libertarianism is easy. I had a sit-down with Michael Malice and we had a great chat; I loved everything he said, I appreciate everything he said. I think his vision of the world is a world I can buy into.
Knut Svanholm: It is.
Peter McCormack: My difficulty is understanding how we get there, the gap between the idea on paper and the reality is quite a tricky one. I know many people say, "Well, Bitcoin fixes this" but to be seen. I think we've got many battles ahead with the state regarding this. It's similar with hyperbitcoinisation; it's something that gets spoken about a lot, but the gap between where we are and how we get to hyperbitcoinisation, and what actually that means is another thing I don't fully understand. So, I'm definitely interested in exploring it with you.
Knut Svanholm: No one understands what hyperbitcoinisation implies. It's literally impossible to wrap your head around, because there's no end point to it and this is the point I'm trying to make in the video. And shout out to Ioni Appelberg who actually makes the actual videos.
Peter McCormack: Shout out to Ioni!
Knut Svanholm: He does the bulk of the work there. I just write the stuff and Guy Swann reads it, but Ioni is the animator. Anyway, the point to that video was that there's no end point to hyperbitcoinisation. The "how we get there" perspective is we can't get there without Bitcoin, we can all agree on that. Before Bitcoin, there was really no point to being a libertarian or an anarcho-capitalist, because the majority of the people don't seem to want that; they want to be governed, they want to be on a leash for all their lives, at least that's what the election results reflect. That's how I interpret it anyway.
So, basically that means they don't really know what's best for themselves, because they don't see how much money and how much energy gets wasted in the system we've got today. But yeah, where to start about the J shape thing…?
Peter McCormack: I think a good starting point is network effects, as you started in the video. Some of it's similar: J-curve technologies, radio phones, televisions, computer, internet, etc, cell phones, they're all highly relevant to this and Bitcoin fits within that list. I've mentioned it on the show before but there's a really good book called Engines Which Move Markets and it refers to the internet, the railroads, electricity, lightbulbs, etc, and how they fundamentally shifted society in terms of organisation and economically. I've always felt like that book could be rewritten at some point with a chapter dedicated to Bitcoin.
Knut Svanholm: That sounds like a good idea. When it comes to network technologies, there's something called Metcalfe's Law, I'm sure you're aware of this, but it's, "The value of the network is equal to the square of the number of users the network has", which means that if two people have one telephone each, they have one person to call; if three people have a telephone each, they each have two people to call, etc, so the value of the network grows exponentially as the network grows bigger.
What this tends to do with successful network technologies is that they have an S-shaped adoption curve, which means that it starts slowly; but as all exponentials do, there's a point, there's a catch-up effect where it all happens suddenly because it doubles every day. The end point is when everyone on Earth is onboarded to the technology. This happened to radio and telephones and Google and Facebook and the internet; all the network technologies that were successful happened this way.
Nowadays, everyone has a smartphone, everyone has some form of social media accounts, everyone has access to email, all of these things grew exponentially and then levelled out at the end. And, I believe Bitcoin is in the middle of this. I don't know how high a percentage of the world's population use Bitcoin at the moment, I think it's something around 0.05% or something. I haven't heard a figure in a while, but this figure doubles at certain intervals, which means that sooner or later everyone will use Bitcoin in some way, shape or form. That is the adoption of the technology, but the price curve is another thing because that follows another pattern.
When everyone on Earth has Bitcoin, there's really no reason for them to stop putting money into Bitcoin. If people keep on dollar cost averaging and all of this, it means that all the monetary energy that gets produced over time that gets funnelled into Bitcoin, the economy grows larger and larger until it eats everything and it doesn't stop there. That's the most fascinating part to me because, say we live in a hyperbitcoinised world, everyone on Earth uses Bitcoin as their main currency, it's currently the sixth large currency in the world, so it's getting there. But say you live in a world where all the other currencies are basically pointless because everyone uses Bitcoin and El Zonte is everywhere; you can use Lightning as easily as in El Zonte or even more easily everywhere on the Earth.
Then what that enables is a global, sound money free-market economy which, by definition, is much, much more effective than our current system, because we live in a handicapped free-market economy, because interventionism is everywhere. Fiat currencies are everywhere, the Cantillon effect is everywhere and what this means practically is that resources get misallocated everywhere. So, all the supply chains, everything in society has to battle all these hurdles along the way to get as effective as they could be if we had a global, sound money free-market economy, but they don't because so many resources are misallocated.
This slows down all the processes, including the processes of switching to a renewable energy system; the price signals get distorted and resources are misallocated. In a sound money economy, only the investments that actually survive on the free market survive and no one gets bailed out, no one gets new loans, new cheaper loans because they sit closer to the money spigot; we'll have none of that. It will be much harder.
Peter McCormack: A fairer system?
Knut Svanholm: Yeah, a much fairer system, and it's much harder to use force to make people do things because a transaction is a voluntary thing at its core. Everything we do is trade; we trade information with each other right now while talking; I talk about this all the time. If we can funnel all that into Bitcoin, we'll have a much fairer world.
Back to the price, that means that the purchasing power of Bitcoin goes up and up and there's no stopping point, because the actual cost of everything else is lowered even more rapidly after everyone is onboarded. Jeff Booth talks about this a lot with how cheap everything is to produce nowadays; there's basically zero marginal cost for producing whatever you want to produce. Transportation costs are going down as well, as long as you don't have big container ships clogging the Suez Canal and stuff like that! But on the whole, transportation costs and production costs for every product there is, is going down. A product is just a service, by the way, and I'm getting into too many subjects at the same time here.
Peter McCormack: I'm keeping notes.
Knut Svanholm: The point is after everyone is onboarded; the purchasing power of a Bitcoin can only keep on going up as long as the economy grows. The economy grows as long as people do stuff and help each other and do stuff that other people want. There's no end to this; it's too good to be true and I'm still trying to wrap my head around what such a world may look like. I'm only sure of one thing, and that is that it will be a hell of a lot better world than what we live in now where everyone's in debt.
If you look at the distribution of Bitcoin among users, the whales are actually losing power to the plebs. Users that have 10 Bitcoin or less --
Peter McCormack: That's what Willy told me.
Knut Svanholm: Yeah, exactly. Willy talks about this a lot and he's been looking at the numbers and number-crunching these things and looking at all the data. The amount of users with 10 Bitcoin or less is growing, the amount of users with 1 Bitcoin or less is also growing and the big whales with 10,000 Bitcoin or more, that is shrinking. So, Bitcoin is doing what all the central banks claim to be doing, even though Bitcoin is the literal opposite of what a central bank is, and it's doing what the central bank says it's doing. I find this so fascinating.
Peter McCormack: That harps to my first note that I wrote, because you mentioned Bitcoin being the sixth largest currency in the world now.
Knut Svanholm: By market cap.
Peter McCormack: Yeah, by market cap, but if you look at that list of currencies, it is the most unique currency amongst it, because it's the only currency that has a fixed limit.
Knut Svanholm: Definitely.
Peter McCormack: It's the only currency that encourages prudence rather than spending.
Knut Svanholm: Exactly.
Peter McCormack: When I was younger, my parents were savers, they talked about savings, they had good interest rates in the banks. Now, if you keep money in the bank, you're losing purchasing power, you're lucky if you get 0.1% interest! So, you're encouraged to spend because otherwise you lose purchasing power. Some people will save anyway because they want to save for whatever reason, but the point being is Bitcoin is so unique, so there is that encouragement to be prudent. What that makes me think is hyperbitcoinisation really is maybe not a collective term, it's an individual experience where you hyperbitcoinise yourself.
Knut Svanholm: It is.
Peter McCormack: I have Bitcoin now as my personal standard, Saifedean talks about Bitcoin standard. When we're on a gold standard, it required others to be on the same standard; it required nations to agree to a gold standard. But with Bitcoin, I don't have to worry about whether you're on a Bitcoin standard or not, or whether my neighbour is or not; it's a personal experience. I hold Bitcoin personally; I hold it with the business. I make my purchase decisions based on whether I want to lose any of my sats. Perhaps hyperbitcoinisation is just an experience you go through as an individual. As you go down the rabbit hole you learn more, you hyperbitcoinise yourself and we don't collectively need everyone to do it.
Knut Svanholm: No, that's exactly right. As Michael Jackson said, "If you want to change the world, take a look at yourself" which maybe he should have done a bit more! Anyway, the thing is that Bitcoin is just an agreement between people that these rules are fair, that's all it is. All we're doing when we're using Bitcoin, when we're hodling Bitcoin or we're spending Bitcoin, whatever we do with them, we agree to the terms of the network. You can do that to different degrees. You can deep dive into all the technical details, you can learn about multisig and CoinJoins and whatever you wish to do; it's a tool, it's right there on the table in front of you, you can use it if you want to, you can choose not to use it if you want to. But if you don't agree with the rules or the protocol, you can't have any of the benefits.
I tweeted this back at Peter Schiff the other day by the way, because what he seems to not get is that all Bitcoin is, is a bunch of people agreeing on a fixed set of rules. It's so embedded in every bitcoiner's head now that these rules, the basics of it, like the halvings every four years, the ten-minute block intervals set by the difficulty adjustment algorithm, the 21 million coin issuance cap, all of these things are in all of our minds and you need to change all of our minds at the same time in order to change Bitcoin. And you can't do that; it's there and you have to live with that now.
Everyone on Earth has to live with the fact that Bitcoin exists, and you can't stop it because it's an idea, it's an intersubjective idea. We all know about this thing; we all know the basics and we agree that it's fair. How do you stop people from agreeing on a subject? You can try to by forking away or promoting this and that, but sooner or later as you know, every bitcoiner has this journey through the shitcoins and through the status tendencies and, "Oh, can the regulator weigh this?" and, "Oh, can't they just change the protocol?" Then you realise that Bitcoin is nothing but an agreement between bitcoiners that we use this in this way, we use the block times instead of universal time; we think in a certain way.
Peter McCormack: Yeah, because you either come to accept it or Bitcoin spits you out, but you can't change it.
Knut Svanholm: Exactly.
Peter McCormack: Roger Ver tried to change it, it spat him out and he's gone from Bitcoin, and it's done it to so many people. It was really interesting, because I was having a conversation with Parker Lewis yesterday about it; it's that the more you attack Bitcoin, any way it can be whether it's a fork or through regulations or through China banning mining, you only ever make Bitcoin stronger, because it responds to each attack. In some ways, it's malleable in that it's like an organism that responds to it.
Let's talk about mining as the example. China bans it and those miners just move to other jurisdictions. So, there are aspects of it which are really hard, but there are other aspects of it which are quite malleable.
Knut Svanholm: Mining, what is mining? It's guessing a number.
Peter McCormack: It's a needle in the haystack.
Knut Svanholm: Every bitcoiner agrees that if we guess, if you find the needle in the haystack you've found it and you can prove that you found it, because the hash of the block has a certain number of zeros ahead of it in the beginning of the hash. That's all it is and we all agree that's how it functions and that's all we need. So, banning mining or fighting Bitcoin, these terms make no sense to me, and they shouldn't make sense to anyone because you can point a gun at two plus two, it will still equal four and you can try to change Bitcoin but Bitcoin won't care; it's the same thing.
Peter McCormack: This is why I struggle sometimes with the Ethereum people. This isn't a debate about whether Ethereum should exist or not, or what its future plans are and whether it can move to proof of stake; forget all that. I accept Ethereum exists, I accept some people get value for money and they like it, fine; that's not an issue. I don't, it's not for me, but I accept that.
But to argue that Ethereum is better money than Bitcoin when Bitcoin is sound money, has had a fixed monetary policy for its existence, it is 21 million fixed, it is halving every 4 years, it's never once had to change its monetary policy. Whereas Ethereum, I think on a handful of occasions they've changed its monetary policy; it's now going to EIP-1559 which is another change, which my fundamental understanding is that it's trying to give Ethereum more value.
But if you have a monetary policy which is that flexible, how can it be harder money? It's quite disingenuous to call it ultra sound money when people are referring to Bitcoin as sound money, with a monetary policy that changes. You might be able to argue and say, "Well, Ethereum is better money because you have the ability to create smart contracts in a way you can't with Bitcoin as a Turing-complete language which, by the way, has its own trade".
All right, fair. There are things you can do on Ethereum that perhaps you can't do on Bitcoin, fine. You can have that argument, but you cannot argue that it's sounder money, because the ability to create dapps is not what makes something sound money. What makes something sound money is that you can trust it, that it's fair, that its monetary policy isn't going to change at the whim of others. So, I find that when Ethereum people argue it's better than Bitcoin, I find that fundamentally disingenuous.
Knut Svanholm: It is. You can go even further than that. Ethereum is in a way also an agreement between the users of Ethereum that they agree to subscribe to the rules of Ethereum. But the rules of Ethereum are, it is a centralised entity that decides the rules, that's the rules. There's no decentralisation to Ethereum at all. All you can do with it basically or everything people are using it for is creating new shitcoins.
Now there's a new suggestion to changing the protocol so that people that cancel their contracts, their smart contracts will get rewarded for removing them from the blockchain and rewriting the blockchain. What's the point of having a blockchain at all if it works that way? That's the thing: there's no point to a blockchain if it's not Bitcoin basically, because if you don't have the decentralisation and if you don't all agree on the rules, if there are no rules to agree on, there's no point to having a blockchain. People have been saying this for years, but people keep falling for it because of these terms, cryptos and everything.
Jack Mallers is talking about this with Brian Armstrong and Coinbase, how he shows the path of making money off gullible people instead of going straight to the bottom with the exchange price for Bitcoin into other currencies and saying, "Okay, well you can exchange them for free and we'll have to make money some other way". What it's basically doing is putting Bitcoin into the same category as all of these casino scams, where 99% of them are designed for one specific purpose and that's to deprive you of your Bitcoin and enrich a few people on top of the pyramid scheme.
By the way, the next video we're working on is about shitcoins and how they can be divided into two categories: the first category is crapto-currencies, which are all the other so-called cryptos; the second category is klepto-currencies, which are all the fiat currencies.
Peter McCormack: Klepto-currencies, I like that!
Knut Svanholm: Yeah, it's a term I'm trying to introduce here, klepto-currencies and crapto-currencies; you should know your shitcoins. Everything that isn't Bitcoin is basically a shitcoin at this point. There's no competition anymore in money and there doesn't need to be.
Peter McCormack: I'll try and be as fair as I can with this and as objective as I can. I think calling everything a scam is an issue, because I think there needs to be some separation. For example, I consider OneCoin a scam; that was an actual scam designed just to steal from people. To call everything a scam doesn't separate the different incentive structures that are built. I think there are outright scams such as OneCoin, which is an absolute scam. I do believe there are attempts at rethinking Bitcoin, which are failures and I consider those "projects".
I don't believe Roger Ver set out to scam people; I think he fundamentally believed that the Basechain should be four transactions and it was a test and he was proven wrong. That's what I think. Don't get me wrong, he's done some things that I don't agree with, but I don't think he said, "Let's create Bitcoin Cash to scam people". I think he created it as a project because he believed that's what Bitcoin should have been.
Knut Svanholm: The thing he did was he misinterpreted what the invention was about or what the discovery of digital scarcity was about, because that's what it was. Humanity discovered, or Satoshi Nakamoto discovered, absolute digital scarcity; I don't like the term "digital" really, but absolute scarcity, absolute mathematical scarcity, let's call it that, and praxiological scarcity, a way for people to agree upon a fixed set of rules that couldn't be changed that ensured that the money supply could not be increased. He solved the double-spending problem, basically.
When that exists, everything else becomes a shitcoin. As you say, there are different levels in hell, so it's a bit like religions; they are not all equally bad, some are more destructive than others and you shouldn't just say that religion is one thing, because there are different levels. People can be religiously wacko from zero to stark raving mad, whatever, crackpot religion.
I view Bitcoin as monetary atheism and I know I get a lot of shit for this, but I think that the verifiability of it -- I choose to not believe in the other coins, because I choose to believe in something or rather I choose to believe as little as possible and verify as much as possible. That's what Bitcoin enables me to do; there are ways for me to check that people are following the rules. By running my own nodes, by learning more about it, it's more easy for me to see that we're all playing a fair game here.
Peter McCormack: I don't disagree.
Knut Svanholm: I'm not saying that the others are all scams, I'm just saying that I don’t buy into them and they might as well be scams, all of them; I don't know, there are different levels of scamminess. If you claim that you discovered absolute scarcity again, you're probably a scammer. Why would anyone want to do that to begin with? If we already found this thing, why would we want to dilute it? The whole point is that it's undilutable. Why would you want to dilute it by introducing more and more other shitty tokens? And there's no such thing as a digital token, by the way, there's only ledgers; it's just an agreement.
Peter McCormack: It's a complicated subject, I definitely think nuance is important. As we went through the blocksize wars, there were many smart people invested in Bitcoin, who had been involved a long time, who believed that bigger blocks were important. There was a time when I did, when I was newer to Bitcoin and I heard the arguments and I was, "Yeah, bigger blocks make sense". I wasn't trying to scam people; I just believed it made sense.
Knut Svanholm: Did you read the book?
Peter McCormack: Which book?
Knut Svanholm: The Blocksize Wars?
Peter McCormack: No, I haven't read it yet, but funnily enough, I've got it planned to read because I'm going off on holiday next week and I'm planning to read it.
The point I'm trying to make is that when I thought bigger blocks make more sense, I wasn't trying to scam people; I just thought it made it more sense, I bought into the arguments for that period of time. Now I don't obviously, and I think it was the debate between Roger Ver and Jameson Lopp on the Tom Woods show which convinced me that smaller blocks made sense, and in hindsight it makes a lot more sense.
But what I'm saying is, I think it's important to be fair to people and classify these things. It's a bit like Ethereum, going back to that, whether or not you think people involved Ethereum are scammers or not, I think there are people who are trying to build things on Ethereum that they think are useful; I think they're dumb, but they find use in them: yield-earning products, lending services.
Sorry, just bear with me, because I think it's important to say. I'm a bitcoiner, I only hold Bitcoin, I've got no interest in other subjects, but I just find that if we call everything else a scam, we miss the nuance of the debate and we miss the nuance of what actually is a scam or what isn't. Therefore, I think we actually give cover to actual scams.
Knut Svanholm: Whenever you talk about nuance and stuff like this, you legitimise projects that try to push a narrative that there's a point to replicating absolute scarcity and there isn't.
Peter McCormack: That's only on the cryptocurrencies which are claiming to compete with Bitcoin, to offer absolute scarcity, but there are others who are trying to do other things.
Knut Svanholm: What else is there? What else is there to introduce that wouldn't work better if it was centralised? Centralised projects can still be centralised; you can still sell gyft cards even though Bitcoin exists, which are totally centralised and that doesn't matter, you can still do all these things. It's just that whenever you introduce a blockchain or a crypto or when you use all these words that we used to describe Bitcoin in the beginning, you confuse people, because the way newcomers think about Bitcoin is wrong from the beginning because they think that there's a competition between these and there really isn't.
Peter McCormack: I think it's intention. I think if you're scamming someone, you are intentionally aware that you're scamming someone. By the way, you've got to remember I'm in total agreement with you about Bitcoin. What I'm saying is, I don't believe there are people, everybody out there working on altcoin projects, are intentionally scamming people.
Knut Svanholm: No, me neither.
Peter McCormack: I think they believe they're building something useful, and that's why I think it's important because we're giving cover otherwise.
Knut Svanholm: You have to play the devil's advocate as well. I don't believe they're all scammers intentionally, of course not. I believe many of them are just confused. People may do what they like and they may believe in what they like. What I dislike is when this magnificent discovery of Bitcoin gets confused with all of these other semi-scammy projects. If they're intentionally scams or not doesn't really matter, because the result is the same; people who choose to invest in these things instead of Bitcoin will lose money over time, will lose purchasing power over time.
Peter McCormack: Again, that's not entirely true; there are plenty of traders out there who will invest in these projects on different timescales and will earn more Bitcoin.
Knut Svanholm: Yeah, but what sort of percentage?
Peter McCormack: I think what you're saying is over time, on a long-enough timeframe price against Bitcoin, they always lose.
Knut Svanholm: When it comes to the traders, it's a bit like the poker boom in the beginning of the century, only a tiny fraction of them actually make money from trading; all the others lose money. Most of them lose money because day trading is really hard, and furthermore, in what way do currency traders contribute to the progress of humanity? How are they good for civilisation as a whole? I don't really see that. All they're doing is making money off other people not making money, because someone has to lose the trade and someone has to win it when it's between different currencies, so I don't really see the point in that.
Of course, some people do it and make money off it, but if you tell people that day trading is a good idea and they should follow all this technical analysis and learn all that stuff, you're missing why they're not producing something valuable instead and selling it instead of just buying something that they think that other people will buy at a certain other time and sell at some time. There's no real value there.
Peter McCormack: Again, I don't think that's right. I think there are people who are getting value from Ethereum, it's providing things to some people that are getting value from it.
Knut Svanholm: Name one.
Peter McCormack: Stablecoins, if people are able to use stablecoins on Ethereum to trade in and out of Bitcoin exchanges that don't have banking services.
Knut Svanholm: Okay, so they enable some people that couldn't buy Bitcoin to buy Bitcoin; is that it?
Peter McCormack: I'm just saying. You asked for an example, there's an example of, they've built something that people are getting value from.
Knut Svanholm: But stablecoins, first of all some of them are really scammy in themselves, how many Tethers are there, are they really whatever? But what they are, the word "stablecoin" is sort of an oxymoron, because the only reason that the dollar is stable is that it's dishonest because prices aren't stable.
Peter McCormack: This is a different point, that's a different point. Your point is whether or not stablecoins are stable, because of your criticism of the fiat currency that it represents. The point you made was, are people building something of value? People are getting value from having the ability to use stablecoins to buy and sell Bitcoin. If people are using it, they've built something of value.
Knut Svanholm: But who benefits from the value of creating a stablecoin? Currency traders.
Peter McCormack: Anyone who wants to buy Bitcoin who can't access banking services from an exchange, or the exchange doesn't support banking services, they have to use a stablecoin. For example, was it Tether was introduced early on because the first exchanges couldn't get banking services, so they introduced Tether so people could trade in and out of Bitcoin? That's something that has provided value to people over the years; I think it's hard to argue against.
It's a different argument, I think, to criticise the value of a stablecoin itself because fiat currencies themselves are shit; they've built something of value. Also, there are people who are able to get loans and earn yield on some of these things. By the way, I don't use it and I never would, but they're using it and they're getting value from it.
Knut Svanholm: The value you're speaking of is basically that it enables some people to acquire Bitcoin.
Peter McCormack: No, it's more than that. Some people are able to take out loans and earn yield using other cryptocurrencies and they get value from that. Value is subjective to the user.
Knut Svanholm: Yes, of course, but all these things, all these financial things that you can do, you can leverage this and you can short that and you can buy in and out of that, it's not really contributing anything to the world.
Peter McCormack: That's a different point.
Knut Svanholm: I don't come from a trading perspective, so I'm not an expert here. I'm just saying that the overall value, if they had focused on Bitcoin only and acquiring Bitcoin for something they did, they would provide more value to society as a whole than just playing these casino games of the financial world. That's my point.
Peter McCormack: Again, I think you're making a different point. You're talking about the morality of these projects and what they do to better the world. That's a different point than saying, does it provide value. Are we talking about net value to the world or net value to the individual?
Knut Svanholm: Okay, I have an answer for that and that is, value is actually created and just not scammed out of someone else.
Peter McCormack: I'm sorry, I'm sorry.
Knut Svanholm: Enriching yourself is not creating value. If it's at the expense of anyone else… sorry.
Peter McCormack: But all trading can be at the expense of anyone else. People going onto any exchange, even a Bitcoin-only exchange, say something like River; if they're trading on River, you can buy and sell and lose dollar value, you can make mistakes and you can lose to somebody else's benefit. I think you're going down the road of making morality decisions about what is ethical and what is not.
Knut Svanholm: Yes, and I think it's unethical to promote a behaviour that most people will lose money by adopting.
Peter McCormack: You think trading itself is unethical?
Knut Svanholm: No, of course not. Trading in itself is, of course, not a bad thing; it's a voluntary exchange between people and you shouldn't try to stop it. The thing is trading between currencies, when you have the perfect currency, trading between other currencies just to enrich yourself doesn't really contribute anything to anyone. These people that claim that it does, the sort of dishonest -- it's hard to articulate this, but the framing is wrong.
Peter McCormack: Do you know what I think is hard to articulate and I don't know how people will respond to this, they might give me a kick or they might agree, but I think it's one of these problems we get when we go down part of the Bitcoin maximalist rabbit hole. It's that it's almost impossible to accept anything else, it becomes really difficult to accept anything else once you're a Bitcoin maximalist, because there's a couple of things.
Firstly, you run the risk of people yelling at you, cancelling you, shouting at you. Even me in this conversation giving this mild acceptance to Ethereum runs the risk of people going, "Oh Pete's a shitcoiner now. Pete's going to promote shitcoins. His podcast is going to support Ethereum". I go that risk of people yelling at me, but sometimes you have to be intellectually honest with yourself.
Your point was, are these people creating something of value? I would argue that it's almost impossible to argue against the fact that when people have built Tether, they built something that is useful for bitcoiners, and other stablecoins that exist on alternative blockchains provide value to bitcoiners. But to accept that means to accept --
Knut Svanholm: Short-term maybe.
Peter McCormack: Maybe it's short term, but at the same time it becomes really difficult, because then we have to go, "Okay, maybe Ethereum does have some value". It's a bit like the INX token when that was launched. It was originally launched on Ethereum because Liquid wasn't ready, so those people who are bitcoiners, essentially Bitcoin maximalists, realised at that moment in time that Ethereum blockchain could provide them with what they needed; or, even recently when Jack Mallers was building Strike, because he couldn't get certain banking services, they did part of it using Tether on, I think, Ethereum.
What I'm saying is I'm happy to have the debate, but I think sometimes we have to be honest. There are things out there that have provided value to people which aren't on Bitcoin. I think Ethereum's dumb, I have no long-term use for it, but I think we have to be honest about it.
Knut Svanholm: Yeah, and I do too, but I think that's a big difference between being open-minded and being intellectually honest, because whenever you legitimise these other things, you claim that Tether had some use case. I would say the people that benefit most from Tether are the people behind Tether, of course, because I think there are more Tethers around than they say there is. It's built on Ethereum and that was supposed to be a good thing? Well, they could have just built it on nothing then, because it's a nothing burger if it's built on Ethereum, because the rules of Ethereum can be changed at any point in time. Maybe some people got lucky and used it at the right time, and they could time the markets and get something for themselves out of it.
I think Bitcoin Cash was a scam. I think it was deliberately there in order to get the ASIC boost running and everything and miners could make more money from whatever technical… etc. But I could still make some money off selling my Bitcoin Cash for Bitcoin. So, for me personally it was good, but I don't think it provided anything of value to Bitcoin, except for maybe setting a precedent that wouldn't have --
Peter McCormack: I'm going to disagree with you, I don't think it was a scam.
Knut Svanholm: I know what you're going to say.
Peter McCormack: Let me say it, let me say it because it's two points. Firstly, I don't think it was a scam, I think it was a disagreement. I think it was a disagreement about scaling, that's what I think it was. I think some of the actions that people took in delivering it became scammy, but ultimately I think it was a disagreement about scaling and then the market proved which was right or wrong. I think it provided a huge amount of value for Bitcoin. I think it proved that forking Bitcoin will ultimately lead to failure and ultimately lead to people losing money.
I think that it strengthened Bitcoin, I think it strengthened the community and I think it strengthened the network. I think that was a huge amount of value. Somebody said it recently to me, they said, "We'll probably look back on 2017 and be glad that the experience happened then, because we got to learn quite early on in the history of Bitcoin what happens when you try and fork it". We have so many forks and they all failed. There's almost no point forking Bitcoin anymore; it's obvious what's going to happen.
Knut Svanholm: I agree with all of that, Peter, but still all the people that believed in Bitcoin Cash, because they misunderstood the point of decentralisation and why the blocks needed to be small, so that people could run their own nodes, all of those people that were misled by these other entities, whether they were scammers or not but let's not go into that, all those people lost money in the process. Those of us that saw that the real Bitcoin is going to survive and this one is going to die out, we could make money off those other people.
So, while I agree with you on all those points, that it was probably good for Bitcoin in the long run because people got a perfect example of what happens if you try to fork Bitcoin, and t's not a good idea, especially after it split into separate forks itself a year later, and you can see how easily these things are manipulated and how robust Bitcoin is; so, I agree to all of that. But I still think credit is where credit's due, and the credit goes to Bitcoin for being so robust and for bitcoiners for believing in the real, moral values of this thing.
So, there's no credit at all to the Bitcoin Cash people, because those are the ones that lost this battle and it was good for Bitcoin because of Bitcoin and not because of Bitcoin Cash. Yes, that's how I view it.
Peter McCormack: Yeah, I don't entirely disagree. I think we're on a similar page, but I think it's important to look back on the history of these events and be honest about what happened and why. I don't think misunderstanding something makes you a scammer; I just think you misunderstand something. If you fail to readjust and then you mislead people or you lie, then you're a scammer. But at the time if you misunderstand something, you just misunderstood something. That's easy to do; they're quite complex things.
Knut Svanholm: At the start of this discussion we didn't discuss if things were scams or not, we were discussing if they were shitcoins or not. There's a subtle difference between the two, because people can have honest intentions and still create a shitcoin. It's still shit, it will still lose value over time and provide more losses to more people. Only a few will gain value from these things existing, and most people will just lose money trading them. So, it's still a shitcoin regardless of if it's intentionally a scam or not. I don't think the British pound was intended to be a scam, but it's still shitcoin. I don't think the US dollar was intended to be a scam in the beginning, but nowadays it's a shitcoin.
Peter McCormack: What about the issuance of tokens in the future on Liquid, which are representations of ownership of a company; are they shitcoins?
Knut Svanholm: I haven't thought about that, so I don't have an answer for you there where I stand on those issues.
Peter McCormack: Because I thought about that. I spoke to Erik Vorhees yesterday, because he's decentralising ShapeShift, and whatever people think of Erik Vorhees, I like talking to him because I've had a lot of interesting discussions about governance and libertarianism with him. I'm not a user of ShapeShift, I'm not going to be buying the FOX token, I'm not going to be investing; but the idea of decentralising a business and having a token which represents ownership and contribution towards the future of that project, I do find interesting.
In a future world, where we become more decentralised, if we were to break down the institutions which govern the ownership of companies and we allowed people in a free market to decide how companies may be owned, we might issue shares as tokens on a blockchain like Liquid and maybe on a long enough timeframe, it would be better if you're in Bitcoin than that token. But like shares, there's shares that you can own in companies that will outperform Bitcoin on certain timeframes.
So, I'm almost at that point where I'm feeling like the conversation regarding tokens, it needs to grow up a bit; we need to be a bit more mature about it and say, "What is the future structure and ownership of companies, especially in a more decentralised world?" Will we move towards tokens as representations of shares; will they be issued on blockchain or something like Liquid?
Knut Svanholm: Are you talking about 10 years from now or 500 years from now?
Peter McCormack: I'm talking about it could be a year from now, it could be five years from now. It's already happening; INX have done it.
Knut Svanholm: This is getting tiresome! The thing is, if it's about a token that represents value, a token representing value, that's sort of what money is. It's, "I have this thing" and the most saleable good in society by definition becomes money. That's why gold became money back in the day because it was saleable, because it was quite easy to verify and it was scarce, so it would hold its value over time and people could use it to exchange with other things.
If the game we're playing is money, there's only one winner and the best type of money, the best form of money is that winner. That's what Bitcoin is and that's the race that Bitcoin is winning and there's no competition there because there's no need for a competition there, because all of the best ideas will be implemented into Bitcoin sooner or later; we just need to all agree that they're good ideas. If they're not good, we won't all agree.
Basically, Bitcoin is an agreement. Use it if you want to, but what bothers me is when people confuse this with other things that aren't this glorious thing that will go up forever. But there are other things that are temporary and might be interesting to someone for a short amount of time. I'm trying to get some form of life insurance for my grand, grand, grand, grandchildren here. I'm not trying to get rich off the stock market, I'm not trying to move fast and break things. I think move slow and don't break things is a much better thing to live by. A philosophical discussion --
Peter McCormack: I think we're talking at cross purposes here, because I think we agree. Yeah, I think we agree on Bitcoin.
Knut Svanholm: Why are we talking about shitcoins?
Peter McCormack: No, because it came up, and if you're going to bring up a point that I disagree with, I'm going to say, "Look, you're my brother, you're my Bitcoin brother, but I disagree with you on this point and this is why". I think these things are healthy to debate. One of the things I've found sometimes is that certain areas of discussion amongst bitcoiners are off topic and you risk reputational damage by discussing these things, which in some ways I find sometimes antithetical to the way bitcoiners are, because if we're talking about freedom, we should be talking about the ability to discuss things.
If we are going to discuss certain issues, then we have to be honest. If you say something I disagree with, then I'm going to say I disagree with it, but the I think the reason we're talking at cross purposes is because I agree with you on Bitcoin being on the best form of money, I 100% agree with you. One area I do disagree with you is that we can say with absolute certainty that there will never be anything better than Bitcoin; Bitcoin exists because of monetary competition. Because there's so much bad money out there, someone created a better money which is Bitcoin.
We might be able to say with 99.999% certainty, but we can't say with 100% certainty that until the end of time, until the sun expands and blows up, that Bitcoin will be the only form of money; there might be something else better invented.
Knut Svanholm: I'm not saying that, I'm not saying that, but I am saying that there will never be a better cryptocurrency or ever be a better blockchain.
Peter McCormack: I think you're probably right.
Knut Svanholm: I think if there's going to be a better type of money it will be something completely different, because you can't reproduce the discovery of absolute scarcity. If you do that, the point of a blockchain disappears and everything crumbles, the house of cards will fall if that was ever to happen, because what's to ensure that won't happen again? If I can't hodl for five generations, but I need to trade every second generation because something else took over, there's no point in hodling and then there's no point in Bitcoin and then there's no point in the scarcity aspect.
That's the basic thesis; you can't replicate this experiment. You can only discover America once; you can only discover Bitcoin once.
Peter McCormack: I think you're almost certainly right.
Knut Svanholm: Almost certainly, yeah!
Peter McCormack: Almost certainly, because I just can't say absolutely. I think it's a dangerous game to play and say with absolute certainty, it will be impossible for any other cryptocurrency ever to be created that will be better than Bitcoin. I think you're almost certainly right, but I just would never say absolutely.
Knut Svanholm: Okay, I wouldn't say anything absolutely, absolutely either because maybe we're all living in a simulation and whatever, so there's always a tiny, tiny chance that something weird will happen. I think with almost absolute certainty that if there's a better money in the future than Bitcoin, it will not be a cryptocurrency; it will be something else.
Peter McCormack: It will be something that's stored in our brains, a biological money stored in our brains.
Knut Svanholm: Aliencoin.
Peter McCormack: Aliencoin!
Knut Svanholm: But Bitcoin already is that. You can store Bitcoins in your brain, you already have that technology. Bitcoin enables that, you already have that.
Peter McCormack: Well…
Knut Svanholm: You don't need anything else; maybe not your brain!
Peter McCormack: Yeah, maybe not my brain! Memorise in 24 words would be quite difficult.
Knut Svanholm: Sorry about that!
Peter McCormack: No, it's fine. 24 words would be hard for me, I'd forget some. It is that interesting concept though that you can travel around the world with the money just stored in 24 words that you remember.
Knut Svanholm: Knowing is owning in that sense. Not only the 24 words, but knowing about Bitcoin is owning Bitcoin, knowing about these concepts is owning Bitcoin, knowing people who are bitcoiners is owning the world. Knowing is owning, is a very powerful concept and when you blur the line between knowing and owning, you make forceful seizure of other people's stuff a lot harder and you make violence a lot less effective. If you killed me with my 24 words in my head, the 24 words go away and they enrich every other bitcoiner by making Bitcoin even more scarce.
Peter McCormack: I'm not going to kill you.
Knut Svanholm: Okay, thank you! Then every other bitcoiner gets richer, every other bitcoiner gets more influential over time, every political decision gets more influenced by bitcoiners. There's no way of losing this. If it works, if it keeps on doing what it does, there's no stopping this thing, because all the incentives are aligned; you can't kill it, it really is Roko's Basilisk or whatever you may call it, but it truly is unstoppable.
Peter McCormack: Why do you think it is that people struggle with it, and I'm talking a range of people, whether it's academics like Nassim Taleb, Nouriel Roubini, whether it's our friend Peter Schiff up here or whether it's just our friends who we're down the pub with trying to explain Bitcoin to them. What is it that people struggle with?
Knut Svanholm: I think it's because it really is too good to be true. People can't wrap their heads around the concept of the value of an asset going up forever and not being able to go down in the long run; they just can't wrap their heads round that concept, because it's too weird. And it really is too weird because it changes everything, absolutely everything on a personal level, on a societal level, everywhere, it changes everything. The next ten years are going to be so interesting, because we're going to see some weird shit. You were in El Zonte, you talked to the President and all of this.
Peter McCormack: My boy.
Knut Svanholm: You're friends with Jack Mallers and all of these guys that are actually changing the world, and you know this; you know how absolutely awesome it is to go around in El Zonte and use the Lightning Network every day; you know how absolutely awesome it is that Jack is building these things that are accessible to everyone in the world. I don't see anything stopping this, stopping people from agreeing about a certain set of rules is a very hard thing, stopping people from remembering 24 words is a very hard thing, stopping people from using mathematics is a very hard thing. I believe mathematics and praxeology wins in the end.
Peter McCormack: I think the biggest problem for adoption for most people is the hurdle of volatility, because if you buy your first Bitcoin at the start of a bull run, you have a very different -- so, if you bought your first Bitcoin about a year ago at $4,000 or $5,000, you're going to have a very different bias towards Bitcoin than the people who bought their first Bitcoin three months ago when it was at $64,000, not because of the price they bought it at but what's happened to the price since.
It's a lot easier to be pro-Bitcoin, excited, listen to podcasts, read articles when you've done a 10X than it is when you've had a 50% haircut. I think that's the struggle; people are always, "I'm too late", my friends who thought they were too late at $1,000, thought they were too late at $20,000, thought they were too late at $64,000. It's coming back to your point; they can't understand it's an asset that can go up in value forever; they always think they've missed out.
Knut Svanholm: Yeah.
Peter McCormack: They, therefore, don't take the next leap.
Knut Svanholm: I always try to tell them it was the same the first time I bought Bitcoin. I thought I was too late and everyone always thinks they're too late. But what I tell people is basically, buy Bitcoin, do not sell them before five years have passed. Hold them for five years at least and then you make your decision.
Peter McCormack: I say four, I always tell people…
Knut Svanholm: With four, you might miss the cycle.
Peter McCormack: Yeah, you might. Well, I think in four years you usually get at least one cycle, but it takes four to five years for a Bitcoin to mature.
Knut Svanholm: Yeah, that's a good way of putting it. It's like a wine; its value grows with its age, a fine wine.
Peter McCormack: Yeah, I like that. I'm going to steal that one! You talk about things are going to get weird and we're going to see a lot of changes. What kind of things are you thinking about here? Because, one of the things on my mind that I worry about, and I know some people say don't or say you're a fucking socialist or stop caring, whatever it is, but one of the things I worry about is this hyperbitcoinisation transition, when other currencies die and people move to Bitcoin, will be a bloody transition and it will be a potentially violent transition.
The reason I say that is, we've seen what happens when wealth inequality grows, we see revolutions, we see demonstrations and we see protests, we see death, we see destruction and we've seen this again and again. The transition from a fiat-based world to a Bitcoin-based world is going to have winners and losers and at certain periods of time, people are going to see their fiat currency collapse while Bitcoin goes up; and maybe they don't hold it and maybe they become angry towards it.
It's a very different world from what we've had for certainly my entire lifetime and the entire lifetime of my parents. One of the things I keep thinking about is how does that transition happen? If it moves to smaller government, whilst it's something many of us support, how does that transition look? Does the world get really fucking weird for a period of time?
Knut Svanholm: Yes, my answer to that is this: the world will get weirder and weirder anyway. Without Bitcoin, we wouldn't have a transition, we would just have a crash and then there would be losers and losers and nothing else, because the crash is coming regardless of whether Bitcoin exists or not. Every fiat currency is hyperinflating just at different rates, so we will all become Lebanon or Venezuela at some point in time; it's just a matter of time. You can't keep the current machine working without an ever-growing GDP and that means you need more and more currency every year and we're all on the same path; all fiat currencies have a limited lifetime; they die at some point.
Those people who hold Bitcoin, in Bitcoin there will be winners and winners and no losers. As long as you hold Bitcoin, you will not be a loser.
Peter McCormack: For five years.
Knut Svanholm: For five years. You might lose your fiat in the process, but this goes back to the Willy Woo statistic there about the number of small hodlers and the people with less than 1 Bitcoin, people with less than 10 Bitcoin; those numbers are growing. So, when you say wealth gaps and all of these things that usually start pitchfork riots, Bitcoin is distributing wealth across to poor people, it is working. It is doing exactly what the central bank says it does, but it's working by doing the exact opposite of what the central bank is doing.
The more expensive the money is to produce, the cheaper the prices of everything else in comparison to that type of money and vice versa. So, the cheaper the money is to produce, the more expensive everything else gets and that's what we're living in now, and everyone has a harder and harder time because money gets devalued all the time.
With Bitcoin, it's the exact opposite. As we long as we have any Bitcoin, your purchasing power will go up over time, so it's the only way to have a transition at all. Without Bitcoin we would just have darkness, civil wars and nothing hopeful to look forward to. Now there is actually something really hopeful to look forward to, I don't know what the transition looks like. What I do know is that it's much harder for people to take people's wealth by force if they have Bitcoin. It's much harder to force people to do stuff they don't want to do if they're bitcoiners. In a world where Bitcoin exists, violence gets more expensive.
So, I try to be an optimist. How can you stop people from agreeing on a fair set of rules that everyone agrees on are fair? You can't stop an idea; you can't stop an idea whose time has come and this is it. So, I believe in a very bright future because of the elimination of violence from the equation. It might be a lot better than people think and that's true for all times. People see new inventions and transitions to new technologies and stuff, "Oh, it's dangerous, it's going to kill us all and AI robots are going to take over everything". But people thought that about the vacuum cleaner as well.
Peter McCormack: They did?
Knut Svanholm: It'll probably be positive, all positive.
Peter McCormack: They thought the vacuum cleaner was dangerous, an army of vacuum cleaners were going to take over the world?
Knut Svanholm: Maybe the vacuum cleaner wasn't the best example in the world, but you get the drift.
Peter McCormack: I do, I do. What do you think is going to be some of the biggest changes that we will see though? I know for me personally that my considerations for what I spend money on has changed drastically. I save more, I spend less and when I do spend, it's on something I really, really fucking want; that is one of the considerations I've had. So that, I guess, is going to make a difference to what society produces, because what we demand will change.
Knut Svanholm: Definitely and it's a much-needed change, because right now there are piles of garbage everywhere because we give each other shiny bullshit for Christmas presents and everything all the time, and we're expected to bring gifts here and there when gifts are really pointless in a world as abundant as the one we live in, because stuff is cheap, life quality is not.
So when you onboard more Bitcoin and we all search for something, a better life, a more meaningful life, a better spiritual life, if you will, and you find that through Bitcoin because your time preference changes in the way you describe there, because people crave less bullshit and more genuine things, and more truthful things.
Peter McCormack: Has Bitcoin changed you?
Knut Svanholm: A lot, of course it has. I just quit my day job, I quite my day job a couple of months back.
Peter McCormack: Sweet. What did you used to do?
Knut Svanholm: I was the crew manager for an offshore shipping company.
Peter McCormack: Wow!
Knut Svanholm: I had responsibility for around 250 employees. It was mostly CTVs, crew transfer vessels, to wind farms in the North Sea.
Peter McCormack: You now have control of that other scarce asset: time!
Knut Svanholm: It wasn't a bad job at all and I have no beef with my former employees at all. The time to move on had come and so I did my last day in the office yesterday with mixed feelings all the way.
Peter McCormack: Yesterday? Wow, congratulations.
Knut Svanholm: Thank you.
Peter McCormack: Dude, you've got control of time now.
Knut Svanholm: I do, I hope. Well, I have a family!
Peter McCormack: That's a positive. You've swapped work time for family time. Are you planning now just to be Bitcoin only, content creator, etc; you're not planning to get another job?
Knut Svanholm: No, I'm becoming Peter McCormack 2.0, that's my plan.
Peter McCormack: The Swedish Peter McCormack! Hey man, how are things over in Sweden?
Knut Svanholm: In what regard?
Peter McCormack: When you go on Twitter and you see people debating lockdowns versus no lockdowns, etc, a lot of bitcoiners will bring up Sweden as an example of a country that basically avoided lockdowns, had a much more liberal approach. Do we get to see the real truth?
Knut Svanholm: I think some, if not most of it, stems from an inability to act at all on the part of our government. They are so slow and not very effective, so they were late to the ball when it came to lockdowns. But then again, I think they also listen a lot to the advisors and we happen to have quite a good advisor. We had a lot of COVID deaths, a lot of old people died; whether that's a good or a bad thing in relationship to how many lockdowns we didn't have, that's a different discussion.
But I'm certainly happy that I could take more responsibility for myself. There was no problem for me to work from home in the beginning when no one knew anything about the disease or anything; I just wanted to keep me and my family safe and it was a good excuse to take the kids out of their brainwashing institution for a while, so we did that for a couple of months.
Peter McCormack: Are they going back?
Knut Svanholm: Unfortunately, but they're going to a different school in another country now.
Peter McCormack: Wow!
Knut Svanholm: I think I shouldn't really swear, but that was a no-no.
Peter McCormack: You're shipping them off?
Knut Svanholm: Yeah, sort of. Well, we're going there too and it's a Scandinavian school.
Peter McCormack: Okay, you can tell me another time, man, tell me another time.
Knut Svanholm: Yeah, sure.
Peter McCormack: There's another thing we have to talk about, one more subject. You know what it is?
Knut Svanholm: All right. Yeah, I have a lot of time, so however long it is.
Peter McCormack: Do you know what the other thing is we have to talk about?
Knut Svanholm: Mexico?
Peter McCormack: No. We have talk about your musical career.
Knut Svanholm: All right, my former musical career!
Peter McCormack: Yeah, man. That was a surprise.
Knut Svanholm: What did you hear? I guess you heard the Driven song from Lure Out the Beast.
Peter McCormack: Yeah, I can't remember the song someone sent me, and it was one of those situations where you're, "Oh shit, am I going to have to pretend I like this because I don't want to make that person feel bad?" I put it on and I was, "This fucking rocks!"
Knut Svanholm: Thank you. Yeah, well I've been in several bands through the years and I haven't had the time to do that much music lately. When that band ended, I needed another creative output because I'm a creative person who needs to put stuff out there. So, I started writing about Bitcoin instead, but now that I have more time on my hands, I make some music again. I made this Fuck You Money song that got popular on Bitcoin Twitter; did you see that?
Peter McCormack: I'm more fascinated with the bands. How big did you get? Did you tour?
Knut Svanholm: No, we didn't tour. We got a record contract and the thing was. we made that song or that album by ourselves. We made the video by ourselves with a friend and then we uploaded it on some site and someone working with The Pirate Bay discovered it and so it was featured on something called The Promo Bay for a while. I don't know when the last time you used The Pirate Bay was, but I guess everyone used it 15 years ago.
It got promoted there for three days, was up for three days, and got around 100,000 views on YouTube. That was the first time I ever saw something actually going viral on the internet that I was involved in, so I saw the potential. If you can only get something, an idea or something creative out there, I saw the potential in social media and the internet there.
Peter McCormack: You didn't get to share a stage with Europe, did you?
Knut Svanholm: We only played in Sweden, mostly in Gothenburg.
Peter McCormack: Europe are Swedish.
Knut Svanholm: We got out of Gothenburg at least, but only small venues and nothing big.
Peter McCormack: My first album I ever owned was a Europe album.
Knut Svanholm: The Final Countdown?
Peter McCormack: No, it was the album after that that had Superstition on it. Let me find it.
Knut Svanholm: Yeah, yeah. They have a fascinating story too. We'll have to grab a beer and talk music someday.
Peter McCormack: We will do. Yeah, my dad came home with it on a cassette and bought me Out of This World because they had released The Final Countdown song and I loved it and then he bought me that cassette. They've been going forever.
Knut Svanholm: Yeah, yeah.
Peter McCormack: I was 10.
Knut Svanholm: We're about the same age, so I grew up with Europe as well.
Peter McCormack: Europe, Bon Jovi.
Knut Svanholm: Twister Sister's We're Not Gonna To Take It was really big in Sweden!
Peter McCormack: Motley Crue, Warrant, were you into Cherry Pie?
Knut Svanholm: Yeah, I liked Cherry Pie.
Peter McCormack: "She's my cherry pie".
Knut Svanholm: But I wasn't into any of the other glam rock. I really liked Guns N' Roses when they came and of course I was a big grunge fan. So, I liked Soundgarden a lot and I still do.
Peter McCormack: Man, when Chris Cornell killed himself that really… oh man, I still can't believe that.
Knut Svanholm: Yeah, that was depressing.
Peter McCormack: Alice in Chains were my favourite; they were my favourite grunge band.
Knut Svanholm: Yeah, excellent.
Peter McCormack: I love Alice in Chains. I've got a tattoo of Layne Staley here actually.
Knut Svanholm: When are you getting a Everything Divided by 21 million tattoo? You've got one right there.
Peter McCormack: I don't have a Bitcoin tattoo.
Knut Svanholm: This is the one you should get.
Peter McCormack: Yeah.
Knut Svanholm: If I convince you to do this right now, live.
Peter McCormack: Maybe, let me think about that. I'll think about that. I probably should get a Bitcoin tattoo at some point; I should do it.
Listen, we didn't talk about exactly what we planned to talk about, but I think it was a healthy discussion and I'm probably going to get shouted at, but I'm glad we did it. Where do people find your books, where do they follow your videos? Tell them where to follow all the shit you're doing because it's really useful.
Knut Svanholm: Yeah. My main Bitcoin content is on Twitter and on Mastodon. I am @knutsvanholm on Twitter and also on Telegram where I have a Telegram channel these days. You can find my books on Amazon and also translations of them available from the Consensus Network and from Apricot Media. Yeah, I'm happy to announce that I'm the editor of the Swedish version of The Bitcoin Standard. I'm having a collaboration with the folks at Consensus Network there, so we're looking forward to that.
Peter McCormack: Nice, man.
Knut Svanholm: I start working on that in a month or two.
Peter McCormack: We'll stick that all in the show notes. Do you know what? I think we've operated with a delay this whole interview.
Knut Svanholm: Oh!
Peter McCormack: I thought we had earlier.
Knut Svanholm: Hopefully someone can fix it.
Peter McCormack: I think we have. Danny will have that, he'll fix that. Well, listen, I'll put it all in the show notes. Hopefully I'm going to see you at some point, dude.
Knut Svanholm: Yeah, don't miss the videos. There's a new one coming out soon. If you search for Everything Divided By 21 Million, you'll find the video and the other videos; the Ioni Appelberg's YouTube channel is highly recommended.
Peter McCormack: Thank you, Ioni. Listen, we'll put it all in the show notes. Hopefully, Danny will fix the delay issue that I think we've had. Appreciate talking to you, man. You're always welcome on the show; it's always a good chat and that's two we've done now. Let's try and do one in person at some point. You can tell me where you'll be and we'll hang out, have a beer, we'll talk rock and roll and do it in person.
Knut Svanholm: Yeah, thanks for having me on and looking forward to everything.
Peter McCormack: To everything. To everything being divided by 21 million. Peace out, brother.
Knut Svanholm: Yeah, peace.
