WBD394 Audio Transcription

Bitcoin Mass Adoption with Yan Pritzker

Interview date: Monday 6th September

Note: the following is a transcription of my interview with Yan Pritzker. 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 Yan Pritzker, co-founder and CTO of Swan Bitcoin. We discuss his family fleeing socialism, onboarding 10 million bitcoiners, and building for global bitcoin adoption.

“This could actually be the thing that fixes a lot of societal problems and it just felt to me like I had to work on it...I don’t see any more pressing problem than fixing the money in the world that could actually make a significant impact on a large number of people.”

— Yan Pritzker

Interview Transcription

Peter McCormack: Yan, how are you brother?

Yan Pritzker: Good Peter.  How's it going?

Peter McCormack: Good man.  Finally, we do this.

Yan Pritzker: Indeed.

Peter McCormack: Finally.  Okay, listen, lots to talk about.  It's been a weird year, man.  How's it been for you?

Yan Pritzker: It has been very strange.  It's been a year of adaptation, I would say, but also a year of building and a lot of fun, so it's been interesting.

Peter McCormack: Are you one of these people like me who now actually prefers bear markets?

Yan Pritzker: I actually do, I really do.  I mean every day I wake up, I'm praying that the price is going sideways so I can get something done, because otherwise it's just, come on, it's too much noise!

Peter McCormack: Yeah, too much noise.  My Twitter feed at the moment is like an NFT gallery.  All I'm seeing NFT, NFT, etc, it's crazy.  I don't really understand it either.

Yan Pritzker: It's bad.  I mean I've been really working on my blocking filters and my mute words, because otherwise the Twitter feed just becomes unusable.  I actually want to learn things and have interesting content and it's either COVID or NFTs.  This whole thing has just taken over!

Peter McCormack: Yeah.  Well I'm deep in the COVID stuff, some of that, but the NFT stuff…  I wanted to block the term NFT, but the problem is that there's the odd little thing I'm interested in.  I had a long conversation with Samson a few days ago about utility within NFTs, because I know on Liquid they're building this ability to do cinema tickets and I quite like the idea of having a market for concert tickets, which cuts out the middle man, because of the steep fees you pay with the resale vendors.  So there is certain stuff I'm interested in, but I'm thinking I've got to block the NFT stuff, dude, it's too much.

Yan Pritzker: I think the idea that digital goods can be sold is not new, it's been around for a long time, and I think there's definitely a lot of interesting innovation to be done there; but we've have had endgame digital items, we've had Linden dollars, those people who are old enough to remember Second Life, that stuff existed for a long time.  World of Warcraft or whatever, people sell game items all the time and so it's just being taken to a new level and some marketing hype is being attached to it.  What really drives me crazy is the people paying like $100,000 for a rock, that's just capital destruction, it's like why?

Peter McCormack: Dude, $2.3 million for a rock.

Yan Pritzker: $2.3 million!  I've stopped keeping track.  I'm assuming it's in the millions now, but this is… yeah.

Peter McCormack: I saw Justin Sun, I don't know if it's a troll or not, I saw Justin Son this morning paid $10 million for a CryptoPunk.

Yan Pritzker: Oh, good lord, I mean this is easy money; easy come, easy go.  The guy's got money coming out of every hole, so he's going to spend it on whatever he wants and if that's pumping the price of CryptoPunks or rocks or whatever it is they come up with next, that's what it's going to be.

Peter McCormack: Well, dude, we can focus on Bitcoin, we've got a lot to talk about.  We also get my lovely backdrop today in my Sheraton Hotel here in El Salvador.  It doesn't screw my OPSEC because by the time this is out, I'll be gone, but I've got a lovely brown curtain here, brown and grey curtain.

Yan Pritzker: I like it.  I've got my barebones guest room that I've never finished decorating because I've just been too busy.  So, you get to stare at a blank wall!

Peter McCormack: Between us, we've got the most miserable set of colours for this interview: grey, brown, black; I'll have to get Danny to put some colour in.  But anyway, listen, lots to talk about.  This is well overdue, man.  When did I last see you; please don't tell me it was Vegas or something?

Yan Pritzker: I think we were in Miami very briefly.

Peter McCormack: Yeah, of course.

Yan Pritzker: But we didn't really hang out very much.  It was crazy out there, man.  It was just… yeah.

Peter McCormack: Are you going to go next year?

Yan Pritzker: Yeah, if I can make it.  I really enjoyed it.  I mean the conference was interesting.  There was definitely the whole shitcoinery going on and a little bit of corporate interests creeping in.  It really reminded me of Burning Man where people kept saying, "Last year was the last good year", it was kind of like this ongoing meme about Burning Man becoming commercialised, and it feels the same thing with this conference; because in 2019, it felt very grass roots and it felt like bitcoiners just hanging out and doing Bitcoin things, and now you have Playboy sponsoring a booth and it's very different.

Peter McCormack: Well look, if we hyperbitcoinised, it is going to become commercialised, we have to accept that.

Yan Pritzker: Yeah, 100%, for sure.  This is part of the mainstreaming of Bitcoin, which is fine.  It has to happen.

Peter McCormack: Well listen, a good place to start, a very interesting place to start, we should go back into your background.  I know Ben, I spoke to Ben about this, he said it's worth digging into.  Do you want to give people a bit of your background pre-Bitcoin, about your family and about leaving the Soviet Union?

Yan Pritzker: Yeah, sure.  I came here to the United States when I was seven with my family, and so we came from the Soviet Union.  I was born in the Ukraine and Ukraine basically was a Soviet country, so I don't speak Ukrainian, for example, I speak Russian.  The Soviet empire was basically just taking over all these little states and it was a socialist state, everything was controlled.  You had full currency control, the currency was constantly devalued.  Prices were basically fixed, like there was a standard salary for a teacher, a standard salary for an engineer. 

Your apartment was basically government provided, but you had to be on a wait list so we waited for, I don't know, several years to get an apartment.  My parents actually got a divorce on paper so that they could be on two different waiting lists to get an apartment!  So, this is the kind of stuff that happens in an economy where everything is completely artificially controlled.  There are very deep black markets, so everything was done black market. 

So for example jeans, if you wanted a pair of jeans from America, that would cost you the same as essentially the apartment would cost you.  It would be just extremely expensive, because the stuff was almost impossible to get; but on the other hand, the prices of other things were super depressed.  An apartment didn't cost you that much; your bread didn't cost you that much, but you had to stand in line for it; and then you couldn't get random goods.  Essentially, whatever they were selling that day, you would buy.  People would just buy whatever was available, and then they would barter it for stuff they actually needed.  So, everybody was stockpiling different things and basically developing this black-market economy.

So this is all stuff I know retroactively after talking to my parents and researching it.  Obviously as a kid, I had a pretty normal childhood from my perspective.  I was running around outside and playing with knives and stuff like the kids do over there!  Five-year-olds are throwing knives, this is a thing!

Peter McCormack: Typical Russian stuff.

Yan Pritzker: Yeah, just your regular Russian childhood!  But when we came over here, we grew up.  My dad hustled and became a computer programmer and stuff like that, but we grew up relatively poor here and I didn't really ever ask why.  I just assumed all immigrants come to America with nothing, this is just the classical immigrant story.  But when I got into Bitcoin, I started understanding this idea that there are capital controls in the world, there's places where you can't take your money out of the country.  Pretty much almost everywhere, there are some kind of capital controls.  Even in America, if you're transporting $10,000 of cash, they want to know about it.

Peter McCormack: Dude, they take it off people.

Yan Pritzker: Yeah!

Peter McCormack: I remember a story, was it last year or two years ago, about some guy who was on a plane and I think he had like $70,000 and they took it off him and he never got it back.

Yan Pritzker: Seriously?

Peter McCormack: Yeah, I'm trying to remember that.

Yan Pritzker: Well we have this whole civil asset forfeiture problem here, where basically they just steal your shit without any due process!  Good luck getting it back!  And that's in the land of the free, this is about as free as it gets; then imagine in most of the world, it's not nearly as good.  In most of the world they have full control over your situation. 

So when we left, we were able to keep $100 per person.  The government exchanged $100 worth of roubles, so that's what we left with.  Otherwise that currency was garbage and nobody wanted it.  So when I started getting into Bitcoin I was like, "Wait a minute.  This is the thing that solves that problem.  It solves the ability for people to take their wealth they accumulated".  Even though we weren't by any stretch of the imagination wealthy, we had something, but we couldn't take it with us.  So that's a form of lock-in, that's a form of jurisdictional nation state lock-in.  You can't leave even if you wanted to, because you'd have to start over and a lot of people don't leave for that reason.  They can't afford to start over later in life, learn new skills, learn a new language, try to make all their money back; it's impossible.

Peter McCormack: Was it hard for your parents to leave?

Yan Pritzker: Yes, but at the same time they just became so fed up with the system and the way that it was.  We left right after Chernobyl.  So Chernobyl happened in 1986 and in 1989 we left, and I think that was one of the tipping points around people realising how messed up the government was, lying about everything and not telling people what's going on and rampant bribery and crime.  Everything's corrupted, but the entire government is corrupt because there is no free market and so anything you need, you need to get through some type of back channel and that creates these massive incentives for bribery and corruption and everything else, and people don't want to live in a society like that.

Peter McCormack: Well I guess in that scenario the corruption is the free market!

Yan Pritzker: Exactly right, so the black market is the free market and eventually the black market ended up essentially eclipsing the white market.  The Soviet Union fell and all the people who had been controlling the black market and the government officials, they became the new oligarchs and the new ruling class of this "capitalist system", but really it was just a transition of the people who had accumulated all the shit during the chaos and had the connections to do that, and those are the people who became wealthy from the fall of the Soviet Union.  So not a good system!

Peter McCormack: Did your parents talk a lot about the past; what it was like for them?

Yan Pritzker: Not really so much.  I think now they're concerned that America is headed down a similar path, where there's talk of socialism and a lot of left-leaning policies that really scare them a lot, because they've seen it before; the control of the media and control of narratives and all this kind of stuff.  In the Soviet Union, it was just blatant, it wasn't like anybody was hiding it.  There were two TV channels and they were state controlled.  You didn't have any information coming in or out. 

It's different now, because we have the internet and we have freedom of information; but at the same time, they're concerned that there's all this narrative control now in the media and even on social media, the gatekeepers become these, whatever, large internet companies.  So that's definitely concerning for them.  They don't really talk about the past as much, but when we've spoken about it, I think that's one of the reasons that they left is that they didn't like that level of control that the government had.

Peter McCormack: Yeah, I mean it obviously impacted you a lot.  You've obviously talked to your parents a lot about it, what they went through living in the Soviet Union and I think it's interesting to hear that they have concerns now with what's happening in the US.  My head space at the moment is trying to understand how people organise, how governance works, the different government structures, whether anarcho-capitalist ideas can work, etc. 

I'm really in that space, because one of the things I keep thinking about is how do we always end up with government, how do we end up with authoritarian states and how do we move forward; rather than just being against this, trying to understand how humans organise themselves?  I guess with what happened in the Soviet Union that was kind of hard socialism, ideologically built centrally from within the government believing that was the best form of governance.  Whereas, I look at the US now and it seems like more of a slip into socialism.

Yan Pritzker: It's more populism driven, it's people who want it; but I guess in a way, the Soviet revolution was also people who were fed up with the king and the ruling class and feeling like they didn't have any power, and what happens over time is that people at the bottom are like, "Why do we get the shit end of the stick?  We want power too", and then there's a revolution, and it could be a hard revolution or it could be, like you're saying, a sort of a slip where essentially right now what's happening is we're voting in the people who will "fix the problems of the poor", the student debt crisis and all this other stuff; essentially the masses are voting for this, because we have a democracy and that's where it's going.

Peter McCormack: Yeah, and one of the things I tend to think about with that -- I mean even right now I'm in El Salvador making a film and looking at what happened during the civil war and looking at what happened to people in the villages who were essentially massacred.  Also, I've been out to various other countries to see what happens and see this kind of constant back and forth between socialist governments and more kind of freedom-loving governments. 

Some of the things I tend to try and think about is, like some of the ideas that are coming out of the US right now, do I believe these people are Marxists and they've studied different forms of Marxism; or are these people who are just trying to have a more equitable society, but they don't understand the secondary effects of doing that?

Yan Pritzker: Yeah, I have a hard time ascribing malice to people.  I always think it's just about incentives, right, and so if you're in a position of power -- and look, a lot of government people go into government because they legitimately want to help folks, right; they're like, "How can I best help my community?" then it's like, "How can I best help my state?" then they eventually make it to federal government, but they end up in this machine and this machine is incentivised to self-perpetuate.

There's all these studies being done on how much time congress spends raising money, for example.  They're spending like half of their time just making phone calls for money, and so that creates an incentive system where they have to essentially play to those interests.  It's not like they're being bribed like they were in the Soviet Union explicitly, but the incentive system exists.  

So for me, it's had to say that anybody's being necessarily malicious or trying to be a puppet master pulling all these Marxist strings; I really think it's more like people just trying to do something that they think is right and then their incentives are being pressured from all the money that's flowing into the system.  It's now this machine and once you're in the machine, you've got to do your part in the machine; you can't actually change the direction the thing is going.

So I think our best bet, in terms of like having a better and free society, is to try to take some of that power away from government and I think Bitcoin is a perfect example of something like that where we just say, "Well you can't just print the money any more.  We can have the money.  This is our money.  So you can print all you want of your other stuff, but we don't want any of that", and I think that's kind of the path that we have to go down.  Otherwise, I think both socialist and capitalist systems have the same fundamental problem, which is that the thing that's created still needs to grow and self-perpetuate.  That government, it doesn't matter if it's free market or not free market, it's never going to be a free market if there's sort of this giant machine that's trying to self-perpetuate at the same time.

Peter McCormack: Yeah, that's why we continue to go in these cycles.  We have cycles of the pull and the push from the left and the right, the growth in wealth inequality which leads to revolution.  You can see that over and over again across the world.  You see it a lot in South America and I'm really interested in that, but I'm also interested in seeing how does Bitcoin break this?  I'm trying not to have that fundamental belief that Bitcoin absolutely definitely fixes everything, because I think that destroys a little bit of objectivity.

Yan Pritzker: Sure, there's more nuance there!

Peter McCormack: Yeah, I think there's more nuance there.  That's where I think Twitter doesn't help, because it just becomes binary arguments and appealing to the echo chamber, rather than going through the nuance of, okay, if Bitcoin does fix certain things, how does it fix this; how does this work?

One thing on my mind right now is the majority of Bitcoin activity now is in North America.  The majority of the big companies that are being built, the majority of the investors, the majority of my listeners; all the activity is in America.  If we hyperbitcoinise and there's a significant proportion of the Bitcoin wealth held in America, how does that impact; is that bad, is it good, does it not matter?  It's really on my mind whether there's a different kind of shift in power and a different shift in wealth equality.

Yan Pritzker: Yeah, I'm not sure.  I kind of think of it like there's no such thing as equality, there's always luck of the draw.  Where are you born?  Is it in the middle of a desert, in an oilfield; what do you have at your disposal?  We here in America we have at our disposal a relatively free society.  We have strong property rights and we are attracting Bitcoin activity.  We also have a lot of the world's worth already and we have a lot of the tech innovation. 

So because of all those pieces that are here, we're better positioned to take advantage of Bitcoin than most other countries, but that's not to say -- we're not the leader necessarily in Bitcoin usage.  I mean I don't know what that number is, but if you look at some of these other countries where people have been surveyed, and they have very high proportionality in terms of people having touched Bitcoin or crypto or whatever these surveys are saying.

The point is that we might have it by numbers, by dollar volume, because we have Michael Saylor who's going to go out and buy $1 billion.  You're probably not going to get an Salvadorian buying $1 billion of Bitcoin, but you might have more of them that are actually using it day-to-day, so there's some degree of proportionality where the old guard wealth is going to be able to transition into Bitcoin in a larger size than, say, people who aren't wealthy to begin with.

But at the same time, I think it is in a certain way a great equaliser, because it creates the opportunity for people who are in disadvantaged societies to save money.  They're no longer essentially like shadow-taxed by their money just bleeding out through inflation, so they have for the first time the ability to save.  They have for the first time the ability to leave their country, as I was saying, and that actually puts pressure on the country itself.  So when we say Bitcoin fixes this, I think of it always in the margins.

You know, Russia experienced this too; the Soviet Union had this brain drain.  Everybody who was smart and had access to capital left, because what are you going to do?  You know that America is a better, freer society.  All the people who understood that left and so that created this brain drain.  So you're going to have the same thing happen to any country where people embrace Bitcoin and on the margin those people are able to leave.  They create brain drain, they destabilise that country, they make it less powerful and then the leaders fall, and so the country may change just because of the nature of the changing population, or it might get worse.  Maybe the people who get out are well off and the people who are left over are left in this impoverished hellhole; that could happen too.  It's not necessarily a clean exit, but I think it gives people some opportunity and that's a good thing.

Peter McCormack: We're also seeing that in the US internally.  We're seeing the brain drain from New York and from California, people moving to Miami, moving to Texas; I think Austin has had a massive influx of people and I'm interested to see what impact that has on the political landscape in both New York and California, if these places could flip red at some point and conversely could Texas flip blue? 

Yan Pritzker: It's hard to say.  I do think that people moving around the country is going to change things a bit.  I definitely see Austin as becoming like a new Silicon Valley hub, but maybe now it's self-selected.  So, the thing about California is it was more or less self-selected.  I lived in San Francisco for three years and everybody you talked to, I mean almost nobody actually is born there.  It's all self-selected.  People come there for a particular reason, whether it be the hippy lifestyle or to build tech or whatever it is.  It's self-selected and I think that self-selection creates an interesting community and I think that's going to happen in Austin.  I see it more freedom-loving people that are also combined with the tech world, which is interesting, and that could create a really interesting society there, but we'll have to see.

Peter McCormack: So you've dedicated your life to Bitcoin now, right?

Yan Pritzker: Yeah, I would say so!

Peter McCormack: Yeah.  How much of that was an economic decision and how much was that an ethical decision?

Yan Pritzker: So I had a start-up right before I started getting into Bitcoin, which was called Reverb, and I've been in start-ups for, I don't know 20 years; this is actually my seventh one now.  So I've done a lot of start-ups.  Most of them did relatively poorly.  I had a few minor exits, but Reverb did really well and so, when I was leaving Reverb, it ended up being sold to Etsy.  I actually left right before that, but I did relatively well with Reverb and I didn't strictly have to work right away.

So, I decided I wanted to work on Bitcoin, not necessarily for monetary reasons, it was more like -- the reason I even wanted to do Reverb was because I wanted to do something that helped people in mass, and Reverb was bringing music to people.  It was a marketplace for people to buy and sell musical gear, which sounds kind of silly; but if you're a musician, there's something really special about getting somebody their first guitar, like a kid, the first used guitar that they get into, and that made me feel good inside.  It made me feel good about what I was doing.

When I learned about Bitcoin I was like, "Damn, this could prevent the next Soviet Union, this could prevent the next Venezuela, this could actually be the thing that fixes a lot of societal problems", and it just felt to me like I had to work on it.  I mean if I have the skill set to do something in the space, I don't see any more pressing problem than fixing the money in the world that could actually make a significant impact on a large number of people.  That's really the reason I got into it.

Peter McCormack: Right.  I want to riff on El Salvador with you in a bit, because I'm here now and we're six days away from Bitcoin becoming a legal tender, which I think is super interesting in loads of different ways; but let's talk a little bit about the book, because you wrote a book.  It's not a long read, it's a good nice easy introduction to people.  Why did you decide to write a book?

Yan Pritzker: So, when I was getting into Bitcoin, which really started around 2016 honestly when I started really getting into it and reading and writing; I started writing a blog, started watching a lot of videos and listening to pods, and at the time there was Andreas's Mastering Bitcoin book, which was really huge and very technical, and when people would ask me like, "How should I learn about Bitcoin?", I would always just point them to small videos, things like that.

But I ended up going around to high schools; I have a lot of teachers who are friends and they invited me to high schools to talk to their kids, and I was out there trying to explain Bitcoin to people, and I started writing down thoughts that ended up being the outline and turned into this book.  I realised from having conversations with people about Bitcoin that it can get very antagonistic.  I'm sure you've found this!  If somebody's not open to Bitcoin they could be like, "Well what about this; what about that; how come this?", and I found like people need time to digest Bitcoin before you can have a real conversation with them, because otherwise they get triggered. 

Everything gets triggered because they're like, "This is fake money; a Ponzi scheme; fool's gold", or whatever, "It's going to destroy the planet", all of these things start getting triggered and they can't rationally think about it.  But I think if you sit down and read about it, it's a totally different experience, because now you have time with your own thoughts to process or whatever.  So the book was really kind of the result of giving these talks and wanting to give people something that they could actually process on their own time, and I wanted it to be really, really short because it's not reasonable to give Mastering Bitcoin to people; it's too technical, it's too long. 

So I wanted people to have an idea of what Bitcoin is and actually, I started from a very technical side myself because I was a developer.  I started explaining the nuts and bolts of how it works, but then I realised that's kind of useless unless I really go back and talk about the why.  So, I actually decided on incorporating a lot of Satoshi's reasonings and getting some of his writing into the book to explain, "This is where Satoshi was coming from, these are the problems he saw with the money, this is what he was trying to do to fix it", and give people an idea that they could actually walk through the process of how Bitcoin might have been invented to get a really good understanding for themselves that they could then defend to other people.  If somebody asks them, "Why are there 21 million Bitcoin; or what is the halving?", they can actually defend that idea, because they understand the nuts and bolts.

Peter McCormack: What did you learn yourself by writing it though?

Yan Pritzker: I mean I learned a ton about Satoshi's motivations, because while writing it I actually spent a lot of time reading his forum posts.  I have this other book, called The Book of Satoshi, which has all of his forum posts and various quotes from him and stuff like that, and that was probably the most educational part for me, just not looking at the tech but looking at Satoshi's reasonings for all of this stuff.  That's why I actually spent a lot of time in the book on that talking about what he saw: the problem with the currency debasement, the problem with trusting central banks, the problems of identity theft and identity leakage that happens in the financial system, censorship and all the stuff that he was pointing out.

I don't think is obvious to most people, especially if you're in America and your money basically works, you don't really question things.  You hear about inflation, but it's not really a thing for you.  For most people, it's fine.  So, a lot of these problems that he points out become way more obvious if you are from a society like the Soviet Union or Latin America where you've seen these problems first hand, you can really identify with them.

I think that's the thing I learned the most, is really just kind of his motivations.  The technical stuff I understood relatively early on, it was just more the political and economic stuff that I think was more interesting, to really bring together the idea why Bitcoin has to exist in the world.

Peter McCormack: So can we dig into that Satoshi stuff?  I find it super interesting, because one of the things I've noticed about Bitcoin is it's leading to a certain consistency of thought or groupthink regarding topics outside of Bitcoin.  So there are a number of bitcoiners who believe in bringing down the state, there are a number of bitcoiners who've become libertarians, anarcho-capitalists, but at the same time there are many libertarians I've met who aren't bitcoiners as well.  So, Satoshi talked a lot about central banks and the problems with central banks.  Did he talk about governance as well?

Yan Pritzker: I don't remember him saying anything specifically about governance other than talking about there's this, "One CPU, one vote", quote from him which is a lot of times misinterpreted by people to indicate that Bitcoin is a type of democracy and it's actually not.  This is the other thing about Satoshi is that he made mistakes, he had bugs in his code, like he's not an infallible person and nothing that he said is completely infallible, it's more like guidelines to what he was thinking.

One thing that people I think really have a struggle with when they look at Bitcoin and they ask about governance, they think about it like voting.  Couldn't people just change the rules of Bitcoin if enough people voted on it?  Because that's what they're used to, especially in democratic societies we're used to this idea, like enough people want something the rules are changed.  But in Bitcoin, it's really much more anarchic.  It's that each node determines for itself what is acceptable. 

So if you're a very economically significant node and you don't want to take payments of this new rule system, then those coins are invalid, you can't pay that merchant or whoever that is with those coins, they don't want it.  So each node decides for themselves, and I think that creates a very different governance system than people are used to.

The way to think about it when, for example, the Blocksize Wars happened in 2017, I actually spent some time writing about that.  At that time I had a blog and I was writing about my perspective as a developer as to what was going happen, and I predicted that the fork was going to fail and all of that.  But it took me a long time to come to that, because there's so much FUD and disinformation and people are saying that, "If enough people want this, it'll just happen", and then I just realised like, "No, it's actually not how it works".  Each node decides and so it doesn't matter what the majority companies in Bitcoin or the majority of miners want, their coins are not going to be accepted by these core group of people that care about Bitcoin and the rules can't be changed.  So, I think there's something to be learned there.

I don't know if it translates to society.  This is I think where bitcoiners will take Bitcoin's governance model of total anarchy, total self-sovereignty and say, "Okay well this will just translate to society, society can work like this".  I think it's a big question, we don't know.  We don't know how this kind of thing scales to people, because the reality is if my government decides to enact some rule and they have the police force and they have the whatever, they can come and enact it and it's very difficult to defend against that.  You can't just say, "No thank you, I'm going to opt out", unless you can actually leave.  This is again where it comes back to Bitcoin.  Yeah, if you're literally jailed or there's a gun to your head, I mean what're you going to do?

Peter McCormack: So, do you think one of the most important things that people learn about when learning about Bitcoin is learning about nodes themselves, running a node; do you think that becomes a core tenet?

Yan Pritzker: I think so.  I also think that bitcoiners spend a lot of time talking about, "Everybody should run a node", but it's also very, very difficult still and I'll say this, "I think we're getting there".  I mean products like Umbrel have gotten really slick, but still the average person cannot run a node right now, that's just the reality.

I know I'm going to get so much flak from bitcoiners right now for this, but I really believe in user experience and there's one part which is like advocacy and we advocate for running nodes and we try to explain it to people, but there's the other part of the user experience, it has to be really good.  When you get your Comcast modem, or whatever your cable provider is, and you plug it in and it works or you get your iPhone and you plug it in and it works; we're not there with Bitcoin nodes yet.  So, expecting that everybody's going to run one when we're not there is just kind of unrealistic.

Now it is important for the people who are actually in Bitcoin and are Bitcoin educators and are Bitcoin evangelists, if you will, to do that so they understand what they're talking about, but I'm not expecting my mum to run a node right now.  And some bitcoiners will say that this is a really bad piece of advice, but I think that people should learn and level up into that first, and we're just not there yet with the user experience.  It's kind of like running Linux in the 1990s, it was only for nerds, but now everyone has it on their phone.

Peter McCormack: Yeah.  I've been through that experience of explaining nodes are too difficult and sometimes even setting up the node itself is fine, but that getting your head around understanding what your node does, it is still complicated and it's still a little bit in the "not your keys, not your Bitcoin" thing; it made me think of that.  I was just going to read to you, I got an email this morning saying, "I'm writing because I still have my Bitcoin on the Coinbase exchange and I'm terrified to move it.  Are my fears justified?"  So I just told him, explained the first point is to get a hardware wallet and he replied, "Like I said, I'm terrified to move it and lose it".

Yan Pritzker: That's a real fear.

Peter McCormack: It's a real fear.  We need to accept these fears that people have and not everybody's technical, not everybody's used to considering a new form of money.  I mean, someone like my dad's spent 70 years using cash and occasionally his credit card; he still prefers cash.  Trying to explain to him this new form of digital money where you hold it on a hardware wallet, you have to back up your private keys in case you lose it; it's a huge leap for many, many people.  Even here out in El Salvador when people ask, "Well, which wallet should I use?"  Well you could use BlueWallet, but that is a custodial, you could use wallet XYZ whichever it is, there's massive leap for people.

Yan Pritzker: Yeah, I think again it's a user experience thing.  I think we need to be in a world where we have magical multisig setup devices where you just buy three things and they just magically communicate to each other and automatically set up and they distribute.  All your secrets are encrypted and then backed up and everything is done for you.  If it's not done for you, there's this expectation that people are just going to figure this out, but the reality is that most people don't even know how to do a good password.  Most people have terrible passwords in their email and their financial security is at risk at all times, they just don't know it.

So many people get hacked or their stuff is stolen, even from traditional accounts, so we're asking a lot of them right now and I think we need to figure out ways to ask less of them while still, again I really think the Linux analogy is very apt, because I ran Linux back in the day, in the 1990s, when it was ridiculous.  You had to write code, compile your own code, everything was just really, really tough and crazy and people would write articles like, "Linux will never go anywhere.  Microsoft has already won", all this kind of stuff.  

But what they didn't understand is that Linux wasn't going to be the thing that people would use, it was just the engine.  It became android, it became the thing that powers the entire web, it became the blood that runs through all of our technology; but people don't have to interact with it directly, they use their android device.  They're not thinking that they're setting up Linux or whatever, but it is an offshoot of that.  So I think Bitcoin ends up there. 

I think nodes end up being, I always think of it like a light bulb.  You have a light bulb node, you'd screw it in, it lights up, it connects to Wi-Fi, it does all the things, you don't worry about it.  We're just not there yet and once that moment comes, then we're going to get a lot more people running nodes.  Maybe it becomes embedded in the boxes that they get from their cable provider and that kind of thing.  I mean we have to figure out where that intersection happens, but it's going to happen, it's just a matter of time.

Peter McCormack: All right.  So I want to talk to you about El Salvador because I'm here, and the reason I want to talk about it is, one of the missions of Swan Bitcoin is to onboard the next 10 million people, while in 6 days, 5 days, 6.4 million people are going to be onboarded into Bitcoin in El Salvador.

Yan Pritzker: Very cool.

Peter McCormack: Very, very cool.  They're going to receive $30 of Bitcoin each.  Super interesting. 

Yan Pritzker: Is there actually any information about how many people signed up for that?

Peter McCormack: See, I don't know that, and I don't know if it applies to children as well.  If you've got three children, do you get $30 each?  Those details I'm not fully aware of, but essentially a population of 6 million; so let's even be conservative, 2 to 3 million.  I'm just wondering how this all plays out.  I'm wondering if the timing's right.  I'm trying to step back from the excitement of a country making Bitcoin legal tender, which is super interesting, but think through all the scenarios.  Does this work; doesn't this work; what are the risks; what is the trade-off? 

I was out for dinner with a couple of bitcoiners last night and we were just running through scenarios, so trying to look at the most positive scenario and the most negative scenario.  The most negative scenario is if this doesn't work out particularly well.  Say people get rekt or we go into a bear market and it turns out to have been something that people perceive in the short term to be a poor decision.  It becomes probably an attack vector for the political opposition and when Bukele's successor is up for election in two or three years, it could be one of the key points they battle against.  Then if a different government comes into power, they might undo the legislation.  So that's the worst-case scenario, that it gets undone in three years.

The best-case scenario is that this is super successful, loads of investment in the country, lots of Bitcoin ends up in the country in the hands of Salvadorans, that they end up raising up the net wealth of the country and the net wealth of people and El Salvador's GDP raises up.  So, there's all these different scenarios I'm trying to think through.  I wondered how much time you've spent thinking about it.

Yan Pritzker: A little bit.  What I think about when I hear about this El Salvador is there's a lot of hype around it, and it really reminds me of the 2013 hype around accepting Bitcoin as payments.  There were so many companies that were like, "We're going to accept Bitcoin as payments.  Bitcoin's the greatest thing", and then what happened, a bear market hit and everybody was basically -- first of all, nobody wanted to pay in Bitcoin, because it wasn't widely distributed enough and people didn't want to part with it, so it didn't really make sense as a payment method.  So you had all these companies hyping up getting paid in Bitcoin and then it basically was like a dud and a lot of them actually cancelled their programmes.

So, I kind of see it the same way with states and I really actually am a little bit pessimistic about what's going to happen in El Salvador.  Again, I'm not on the ground there so I don't want to speak to the situation because I haven't seen it.  My friends and my Swan team, they've gone down to El Zonte and all that kind of stuff, and they say that Bitcoin is relatively well accepted there.  But still, in the country at large, a lot of people are going around their daily business and they're already on the dollar, so they're not actually that incentivised I think to go to Bitcoin. 

Whereas, if they were like Venezuela or some other country that really had a problem with the currency, maybe there's more of that incentive.  But to me, it might be a little bit of a hype cycle where people say, "Yeah it's legal tender, great", and some percentage of shops start accepting it, some percentage of users start using it, but then the hype dies down and it's like, "Well nothing really changed".  And maybe it takes another cycle for some more countries to wise up to it, some more actual problems to happen to really kick people's necessity into gear and then it becomes more adopted.

We're seeing now the same thing with the corporations.  Everybody's like, "We need to buy Bitcoin on our balance sheet", and there was a bit hype cycle, a couple of dozen companies bought some Bitcoin, a couple of hundred or a thousand smaller companies are buying Bitcoin; but it's a hype cycle and it's going to diminish and it's going to fizzle out and then there will be another one.  So I think of it more that way. 

I will be very pleasantly surprised if all of a sudden, El Salvador becomes the Bitcoin capital of the world, that would be awesome, but I'm not expecting it personally.  I've always said that Bitcoin is a cultural and generational shift and just because the price goes up way faster than anybody expected maybe, doesn't change the fact that people need time to adjust to this new norm and I think that just doesn't happen overnight.

Peter McCormack: Yeah.  It could be a bit of an anti-climax in terms of the roll out.

Yan Pritzker: It could be!

Peter McCormack: Yeah, everyone has the wallet, but they continue accepting the dollar.  There are complexities around accepting Bitcoin.  The main one I think most people have to get used to is volatility.  How much have you touched on volatility in your writings?

Yan Pritzker: I don't really talk about it too much, because again I always think about Bitcoin as a very cyclical, very long-term thing; and I think when I'm talking to my friends or anybody who's asking me about Bitcoin I say, "At worst we're upgrading our money.  We're looking at this as a multigenerational journey and if the majority of the Bitcoin that you save up is going to your children, that would be fine.  That would probably be the thing that you're doing here, because you're building a legacy, you're not really necessarily trying to make a quick buck". 

I think volatility over time has to go down, because the market will get large enough where it would be difficult for anybody to move it with small amounts of volume.  I think we're going to get there.  Again, I don't know how long it takes; maybe it takes another 5, 10, 20 years, I don't know.  The other thing is, volatility is always extremely relative.  So in the United States maybe it's volatile, but in Venezuela or Argentina or other places that have double-digit inflation, it's not volatile; it's actually better than the alternative. 

So I don't think we can talk about it uniformly, I think we have to talk about it very locally and very specific to people's situation and if their local currency is worse than Bitcoin in volatility and it's purchasing power loss, they're going to choose Bitcoin over time, it's just a matter of education and improving user experience.

Peter McCormack: Well, I mean here in El Salvador they are dollarised, so it is relatively volatile.  I think what my hope for here, Yan, is that this just becomes an accelerant for people in this country to have an incentive to learn about Bitcoin.

Yan Pritzker: Perhaps.

Peter McCormack: Yeah.  I don't see it as a situation where everyone's going to be going round spending Bitcoin with each other.  Maybe the Bitcoin that's coming in to Zonte will be leaving some sats behind, which I like doing, but maybe it's just an accelerant for people to learn about Bitcoin here.

Yan Pritzker: Yeah, and honestly if they learn about Bitcoin enough, they're going to realise they don't want to spend it, right!  If you figure out where you are in the Bitcoin cycle and you're the first country literally with Bitcoin tender laws and you realise, "Wait a minute, there's going to be others.  Then why spend this, unless that's my only option?" and like you were saying, they're already dollarised.  I don't know what other problems there are with the dollarisation.

For me, the main problem with dollarisation is that the United States gets to call the rules, right.  They control the entire dollar economy of the world and they can just shut down your country and say, "We don't like you anymore; we don't like your leadership", sanctions whatever, "We don't want to clear your wires".  I mean they can do that kind of stuff and they can also print a whole lot of dollars, so it's not great from that perspective.  But as far as the alternative, having their own currency with double- or triple-digit inflation like they probably would have if they don't have the dollar, the dollar is actually a pretty good choice. 

So I think it might be a nothingburger where people end up sort of keep using the dollar, learn about Bitcoin, the hype is good, the marketing is great, education is wonderful and it'll just take a cycle for them to kind of kick it into gear.

Peter McCormack: So it sounds like to me that you're firmly in this camp that we're still very early in Bitcoin and one of the things that we should --

Yan Pritzker: I'm a permanent hyper bear and how far in the cycle we are!

Peter McCormack: So, it sounds to me like one of the most important things to educate people is that we are early.  We are changing the money, therefore anything that you are investing in, this is something you should be considering holding for multiyear, perhaps a decade or decades.

Yan Pritzker: I think so, yeah.  I'm definitely always talking about inheritance, and I think that's another area that's difficult and has not been fully solved.  I know there are companies that are focussing on setting up multisig for inheritance purposes and all that, but again it has to be really easy and it has to be something that people don't worry about.  Right now, it's really only accessible by wealthy folks with a significant amount at stake and they're going to invest some time in setting up all the stuff.  It needs to be a no-brainer and then it's like, "Okay I have a Bitcoin savings account and I'm not worried.  It's going to go to my kids when I die.  It's going to be great.  It will be multisig and magic will happen", and we need to there for this to be more of a cultural thing

But I do see that a lot of our customers at Swan, we actually have probably half of our customers that are coming, they're older, 50 years and up.  A lot of the volume is coming from those folks and they're all asking about it like, "I'm going to leave Bitcoin to my kids.  I'm looking at this as a savings account.  I'm looking at this for the long term".  They're not looking to like get in and get out.  This is not what somebody in that age group thinks about, they think about their legacy.  So, it's really interesting to see that, because it is happening and it's a really exciting change in how people think about Bitcoin.  It's not 2017 retail mania anymore.

Peter McCormack: Well it's super bullish.  I mean we keep having Bitcoins being taken out of the system and put in long-term storage for the future.  I think it's ultra-bullish within the current market.  So, tell me a little bit more about Swan.  Apart from the fact that you guys seem to be recruiting all the best content creators in the space, what is the Swan mission?

Yan Pritzker: So I mean the Swan mission was and remains to be the best on ramp for bitcoiners, to bring in bitcoiners, and specifically we use the word "bitcoiners" as opposed to just customers or whatever.  We want to make bitcoiners, not just people who buy Bitcoin and see a number that's going up, but people who care about Bitcoin, people who are going to explain it to their friends, people who are going to run nodes, who are going to set up wallets, who are actually going to do all that stuff.

So, our mission has always been to align ourselves with the core tenets of Bitcoin.  Now, yes, we're a KYC service.  I mean there are going to be tons of bitcoiners who are going to come down and say, "You should only ever buy Bitcoin in peer-to-peer markets", or whatever; but the reality is, if you want to onboard the next 10 million, it's not going to happen that way.  You need to have an easy way for people to onboard and I'm not worried that I got KYCd for my Bitcoin, I'm going to be leaving KYC-free Bitcoin to my kids and everything's going to be fine.  We have CoinJoins, we have all this other stuff, we have all this privacy technology and we're not afraid to talk about it either.  We write about this stuff.

We believe that Bitcoin is a multigenerational change and that the user experience is being improved, and so we're just trying to get people their first taste, and if that first taste means literally buying a number and their number's on their dashboard, that's great because that's an incentive for them to learn more.  And then that number then becomes a withdrawal in their wallet, because we're encouraging automatic withdrawals; and then it becomes running your node, because now we're having drip campaigns over email.  We explaining to people what to do with their Bitcoin, what are the next steps, what is the next thing that they can read about to get more educated.

So we're a combination of an on-ramp and educational and, like you said, content creators come to us because we're essentially a publishing house now.  We're producing content because we care about Bitcoin so much that we think that that's the best thing we could be doing with our time, is producing better Bitcoin content, better educational material, getting people onboarded.

Peter McCormack: What is the future for exchanges, because we've had a couple of quite big announcements in the last few months?  Strike has moved to provide Bitcoin buying at zero cost essentially, almost zero cost let's say.  We've also had Jack Dorsey announce that they're going to be building or working on a decentralised exchange.  What do you think the long-term future is for exchanges? 

I think obviously some of the exchanges like my sponsor, Gemini, which allows people to buy all different types of coins, and Coinbase, etc, they're in a different space because they're supporting multiple coins and there isn't that kind of ethical push to make this as cheap and easy as possible.  But within Bitcoin, there is that kind of push and I've noticed the exchanges are expanding into other services.  What do you think the future is of exchanges?

Yan Pritzker: I mean I think exchanges, they're kind of like casinos.  They're basically feeding people's base desire to gamble and that base desire is not going to go away, and as long as there's no sort of egregious regulation to stop it, and I'm not pushing for that regulation by the way, I think people should be able to trade shitcoins if they like, they can trade penny stocks or whatever; you can trade whatever you want.

Peter McCormack: Go to Vegas.

Yan Pritzker: Yeah, go to Vegas.  If you want to gamble, you can gamble.  I think those exchanges, they're firmly in the gambling camp for me and I think they started off as on-ramps, but because they turned into the gambling platforms that they are, they can't really serve the on-ramp case too well because they're really just trying to get people in the door so they can do their thing, which is fine.  Again, I'm not against that as a business model, it makes lots of money, obviously Coinbase is a very valuable company; but for me and for us at Swan, it's an ethical mission to like teach people about what Bitcoin is and turn them into bitcoiners because we don't care.  The gambling is going to happen, for me it's a total side note to the actual revolution of changing the money of the world. 

So, I think the exchanges will exist in perpetuity, just like stock markets will exist in perpetuity and pink-sheet stocks and penny stocks will continue to trade in perpetuity.  It's not that those companies have any value or any fundamental reason for being, it's just that people want to trade them, so they'll continue trading them.  Doge and memecoins will continue in perpetuity.

These things will happen, but I think it also just means that the on ramps that are focussed -- because why do people come to us versus some other place?  It's because they like our education, they like that they can talk to somebody, they like that they can have essentially a Bitcoin friend.  We're everybody's Bitcoin friend.  If you have one, you can talk to them, great, but a lot of people don't have a Bitcoin friend so it's nice to be able to talk to somebody and ask them questions.  And I think at the end of the day, in this phase of Bitcoin that we are in, which I think will last for the next 25 years where people are just learning about it, that's where on-ramps are going to really shine and exchanges will continue to make their money, but that's not their future, their future is really just to be this gambling platform.

Peter McCormack: Yeah.  We are in a war of narratives in this.  It's quite interesting you say about that and it's something I've been discussing recently, I think I even discussed it with Udi, is like this war of narratives at the moment.  Bitcoin for me, it's exciting, but for most people it isn't exciting.  Penguin NFTs are exciting, Ethereum's exciting, shitcoin ABC, Dog coin's exciting, CumRocket's exciting, because I think it feeds on that desire that people have to gamble, that chance to get rich quick kind of situation.

Yan Pritzker: Adrenaline.

Peter McCormack: Yeah, dopamine, but it becomes like a war on narratives.  Like I said to you when we started, my Twitter feed at the moment is just NFT this, NFT that and one of the difficulties with that is trying to introduce people back to why Bitcoin is important, and I think a lot of people might miss it. 

People talk about flipping Bitcoin, I think that's quite difficult, but it does feel like the people in Ethereum are trying to come up with monetary policy that allows that to happen.  And I feel like sometimes, we're in a war of narratives.  It does make me think about how do we win this war of narratives, because I think it is important that we maintain that Bitcoin is the best but how do we win that war of narratives?  Do you think about that?

Yan Pritzker: I do a bit, but I also think we live in an echo chamber.  If you're on Twitter, how much of the world's population, 10% is on Twitter?  I think 10% of America is on Twitter, I think it's much less worldwide.  So it's really, really tiny and you can get a false sense of what narratives are and you can also get a false sense of what people's behaviour is, because you see all these crypto traders and NFT bros, but if you look at the actual…

I mean you're on the ground in El Salvador, I'd be very curious for you to go round and ask people what they think about NFTs and see if anybody even knows what they are.  I mean maybe there are some people but my guess would be that most people go on about their daily lives in most places aren't thinking about that.  They're thinking about how they make ends meet and how to protect their wealth from inflation and at the end of the day, this is why I always talk about there's luxury and there's necessity.

In America, Bitcoin and crypto in general, and again I do not think those two things are the same at all, but they get lumped together by the media because in America it's all luxury; all Bitcoin and crypto is luxury, it's a luxury good, it's for people who have money to trade, etc.  Sure there's some people on the margin that are actually using Bitcoin for its "intended purposes" like saving value, but most people are just trying to get rich because they're already decently well off and they just want to like maximise gains, so we have yield chasing and all this other stuff.

But look at other countries and it's a very different picture.  People are actually building businesses and they have to use Bitcoin to trade with their partners in some other country, for example, because that's the only thing that works.  They're not out there trading NFTs, they're trying to build a business.  So I think we can get a very false sense of what the narratives are and I really do think that the monetary forces around Bitcoin, they will work regardless of whether we try to defend these narratives or not.  People are going to have to make a choice.  My currency that sucks and is devaluing or Bitcoin or shitcoin number 925?  That choice is a purely individual choice around what's the better money, and Bitcoin's going to win that war very easily.

Peter McCormack: So a bit of the hare and the tortoise race?

Yan Pritzker: I think it very much is, because it's exactly like you're seeing -- the ICO boom was another thing.  In 2016, when I started researching Bitcoin, I spent the first six or eight months of my journey researching Ethereum and ICOs, because that's what was so hyped up.  I was listening to ICO podcasts and being like, "Wow, this is a really great idea.  Basic Attention Token, amazing!"  All this stuff was really cool and if you're a technology person, you end up really down that road very quickly because it sounds cool, it sounds like it's going to work all this other stuff, and NFTs are just the current ICO bubble.

It's like now it's all going to be, "Oh we're all going to have digital rights on the blockchain and we're going to do this, we're going to split artist payments", and a lot of those are great ideas.  I'm not saying they're bad ideas, just Basic Attention Token is not a bad idea except for the token's the problem.  The idea of paying for content and not having ads is a good idea, but that should be done with Lightning, with actual money.  The same thing with these NFTs and all this other stuff.  If you want to pay an artist for their podcast, well you've got Breez.  Listen to the pods, send them some sats.  Okay that works, that's sending them money.  If you're sending them garbage tokens that they then have to sell for money, that doesn't work, that's not a monetarily sound concept.

So I think we're going to have these hype cycles and then eventually it all just comes back.  The hype cycles are the hare and Bitcoin's the tortoise actually building the infrastructure that needs to exist for these things to truly work in the real world, and then Lightning ends up implementing it.  So I think we're going to see that.

Peter McCormack: Love it man.  So what else have you got coming up, dude; are you going to approach a second book, third book, fourth book?

Yan Pritzker: I'm too busy with Swan, man.  I mean I wish; but you know, the reason I wrote the book is I think Bitcoin -- like it's very difficult to write books, for example, about Lightning, because it's so rapidly evolving.  Whereas Bitcoin, because it is a fixed protocol and because it's not going to really change, you can write a book about it and the book's good for life, you're never really have to revise it.  Maybe new historical stuff comes to light, but really the thing hasn't changed.  Even though there's all these developments, second layers and third layers all around it, sidechains and all this stuff, Bitcoin doesn't change. 

So, I would have a hard time writing another book, because I think I would have to write it about Lightning or something like that and it's just too early to talk about that, because it's not cemented yet.  But yeah, spending a lot of time on Swan just developing better services, better custodial and non-custodial options for people to take coins off and IRAs are coming and services for high net worth individuals are expanding, so doing all that kind of stuff.

Peter McCormack: Well listen, man, it's great to talk to you.  I love what you guys are doing over at Swan.  It's a great team.

Yan Pritzker: Thanks.

Peter McCormack: Like I say, you seem to have recruited everybody!  Where's my job?

Yan Pritzker: That's Cory.  Talk to Cory.  Cory is the master, man, he's just got everybody!

Peter McCormack: Cory, where's my job offer?  No, I'm only kidding, dude.  Listen great to talk to you finally.  Hopefully we get to hang out again soon, but I appreciate your input and coming on and sharing with my audience, man.  Listen, if people want to find the book, which they should read, where can they find it and where can they find you?

Yan Pritzker: You can google Inventing Bitcoin, you'll find it on Amazon.  It's also available in a number of different languages.  We have a Spanish translation, French, German somewhere in the works, we have Portuguese in the works, everything in the works, Turkish in the works.  So lots of translations coming, and you can find me on Twitter @skwp.

Peter McCormack: Awesome, man.  Right, listen, take care, Yan.  Great to talk to you brother.  I've got to head down to Zonte.

Yan Pritzker: Nice to talk to you, Peter.

Peter McCormack: Appreciate it.

Yan Pritzker: Cheers.