WBD446 Audio Transcription

The Cypherpunk Revolution with Austin Hill

Interview date: Thursday 6th January

Note: the following is a transcription of my interview with Austin Hill. 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.

I sat down with Austin Hill, one of the original converts to the cypherpunk movement, and more lately, a pivotal safeguarding figure for Bitcoin. In the first of two successive interviews to be released, we discuss how he discovered the cypherpunks, his challenging early endeavours, a reawakening through Bitcoin, and the risks and opportunities for the future.

“Everyone thought we had this masterplan for Blockstream… I literally went to our investors and I said ‘You need to look at Bitcoin as the Manhattan Project of the financial singularity. The world of finance will be completely remade with Bitcoin at the core. It is literally like creating atomic fusion that Feynman and Teller and Oppenheimer did…we’re going to need a shit load of money, and I have no idea how we’re going to make money, but we’ll figure it out.’”

— Austin Hill

Interview Transcription

Austin Hill: So, the world memory championship to compete at that level, you've got to memorise five decks of cards in under five minutes, randomly shuffled.  You've got to memorise random numbers, up to 10,000 random numbers, and you've got ten minutes to memorise 10,000 random numbers, and people just train for it.

There's this great book by Joshua Foer, called Moonwalking with Einstein, where he started studying these people, and he thought that they had some natural, God-given gift, and they were like, "No, it's just training the brain to work in different ways".  So, he trained with them and two years later, the reporter went back and placed second in the world. 

Peter McCormack: What?

Austin Hill: It's a fascinating book, and it goes through all these techniques.  So, I've been practising them since I was a kid, enhancing my normal abilities that I had to improve.

Peter McCormack: How did you figure this out?

Austin Hill: Figure what out?

Peter McCormack: That you had this ability?

Austin Hill: It was just something I was good at.  Growing up, I loved reading.  My parents encouraged reading, I was a voracious reader, and just over time I realised I was reading at a much faster rate than other people.  So, I would read three or four books in an evening, and my mother would be like, "Go to bed!" and I was like, "No, there's another Heinlein book, there's another Asimov", because I loved sci-fi.  All of a sudden, I was reading two, three, four, five books a day.

Peter McCormack: I don't think I read that many books a year.  I listen to books.

Austin Hill: Yeah, I found podcasts really, really difficult, because the rate of input was so much slower, compared to how I speed read, because I would just see the page and scan it, and it would freak my girlfriend out, because when we used to travel, I'd bring two suitcases of books to last a one week vacation and that was like, "You have your shoes, I have my books!"

Peter McCormack: I can't imagine being able to do that, but that's incredible.  Do you not even have to pause to just take it all in, the page in?

Austin Hill: Yeah, I just kind of flip, flip, flip, and it's there.

Peter McCormack: Well listen, Austin, it's great to have you here, long time coming.  We've been talking about this for a couple of years really.  We're going to talk about the Vulnerable World Hypothesis, or thesis, but before that, the opportunity to sit across from a cypherpunk is not something I get too often these days.  So, I'd like to dig a little bit of the background, and I'm sure you've talked about it hundreds of times, but lots of listeners won't have heard too much about the early history of the cypherpunks.

Can you just dive in, start anywhere you want, but I'd love to just know about how you first came across this group of people, how you first became involved with them?  Take me all the way back.

Austin Hill: Sure.  Well, growing up as a teenager, I was an old-school hacker, so I explored computer networks.  Some I was allowed in, some I wasn't, but that was the only way to get access to the early internet.  But while still a teenager, I realised there was no future in this, so I started a career as a teenager as a security consultant, where I would do red team attacks; that was one of my very first companies.  So, I would get hired by companies to break into their systems and show them the vulnerabilities.

A lot of my friends got arrested by the FBI in an early operation, called Operation Sundevil, where they essentially made hackers enemy number one and violated their civil liberties.  It's what led to the creation of Electronic Frontier Foundation, Mitch Kapor and John Gilmore, and who was the third founder?  It was Mitch, John and John Perry Barlow, who we miss, an incredibly great person.  They created EFF as a reaction to this.  So, early on, the civil liberties in the internet really mattered to me. 

So, I was tracking the early discussions that were going on, pre the creation of actual cypherpunks, the mailing list.  When John Gilmore and that group created the cypherpunk movement, I was already involved.  I was tracking the early battles around PGP that were happening, I cared about encryption.  So, I sold my first big company in 1996.  1994 to 1996, I had started an internet provider, raised some capital and ran one of Canada's largest internet providers, like the earthling dial-up internet of its day.  I co-founded it with my brother with investments from my dad, and then we merged with another and I was the CTO.

So, I was running fibre into Canada, running all their data centres.  We sold it and I came into a bit of money, not totally life-changing, but for that age it was significant.

Peter McCormack: How old were you?

Austin Hill: It was 1996, so I was 23.

Peter McCormack: Nice.

Austin Hill: Yeah.  But it was significant, but our dad, who was our angel investor, made more betting on his sons than he had in pretty much most of his career as CFO of public companies!

Peter McCormack: Even better!

Austin Hill: Yeah, and it was nice.  We were thinking as a family, "What do we want to do next?"  I had this thesis and the same way Netscape changed browsing to make it easy and accessible for everyone, I said, "What if we could build the Netscape of encryption tools, the Netscape of cypherpunk tools, something that is just so transparently easy that the UI would make every email encrypted, every person would have a pseudonym, totally unlinkable pseudonym, so that different parts of your life could never be linked, and you had an email address for every part.  And all of your internet communication was routed over an anonymous IP network, based off the idea of Wei Dai PipeNet, which was based off David Chaum's DC-net?"

So, I basically took all the best cypherpunk technology, its untraceable pseudonyms, some of the work that had been done with anonymous remailers, I looked at Hashcash that Adam had built and invented for anonymous remailers, and I was like, "What if we built a cypherpunk lab, hiring all the best cypherpunks in the world, and we commercialised these technologies in an easy-to-use UI?" 

So, we called the company Zero-Knowledge, we went on to raise $75 million.  We hired our chief scientist, who was one of the original cypherpunks, Dr Ian Goldberg, who's invented a whole bunch of encryption algorithms, at the time broke SSL.  He was very, very instrumental, although doesn't get the credit.  He still runs the best security and privacy academic research lab in the world, out of Waterloo, and teaches people on all sorts of cypherpunk technologies beyond Bitcoin.  I hired Adam Back.  I knew his work, and so it was 1998.  I called Adam in England and said, "You need to come work for us".  He picked up his family and moved to Montreal. 

We tried to buy DigiCash.  DigiCash went bankrupt and I was one of the bidders.  I couldn't convince the VCs to sell it to me, because we were going to take the patents and make it free, and we were going to release anonymous Ecash, because that was the missing piece.  So, the idea was that if we had anonymous identities, anonymous IP and anonymous payments, we could build the internet that wasn't based off surveillance capitalism, and we could build an alternate economic model for the world; and we could embed a base layer of the internet, privacy and anonymity.

We got in a lot of trouble.  We released a hack on the Intel Pentium serial number chip, because Intel released a chip that had a serial number on it that they said would track you across the web.  They promoted this idea that we would put a permanent cookie on your chip and they said, "But you'll be in total control".  And we were like, "Screw that!" so we released a hack that showed that a remote attacker could exploit it.  Intel hated us, so we were all over the news.  As privacy advocates, we were very vocal, we got a lot of press.  This is pre-Google, so a lot of this stuff disappeared.

We grew to 280 employees, we did actually one of the first Ecash mints.  So, we couldn't use the Chaum Ecash patents that got locked up, and this is why we're so against patents at Blockstream and in my career, because patents have actually stopped the progress of cryptography; first, the RSA patents prevented us from doing tons of encryption, then the Chaum patents got locked up and owned and prevented the development.  So, a lot of the original cypherpunks were all anti-patent.

John Gilmour and I actually came up with this idea of an open-source GPL patent licence, that would actually protect patents.  That's part of what Blockstream was funded to create.  I told my investors we're going to patent anything we can and give it away for free, as long as no one has any other patents, and that formed the basis of the Defensive Patent License, that's at the heart of Blockstream, that's now being used by Jack and being used by the Bitcoin community to protect against patent trolls.

So, there was a lot of stuff that went into it, but we got too big for our ambitions, we totally misjudged the market for privacy, because people say they want privacy, but they make horrible decisions about it every day.

Peter McCormack: Yeah, I think the problem with privacy is that, to achieve a high-level of privacy online is actually quite a lot of work, and you have to give up quite a lot of useful tools.  I went through a process after a Jamieson Lopp interview of trying to just give myself more privacy on my phone, and it was little things like Google Maps became almost unusable, just little things like that.  So, it's difficult for a couple of reasons.  I think technically, people who aren't competent with technology can make simple mistakes, which they end up giving up some of their privacy; and also, the convenience side.

Austin Hill: Well we actually developed a tool that ran on your computer.  You just picked which identity, it would automatically scan to see if you were leaking data, it would replace it with your pseudonym's data, it would automatically alternate your emails, so it would essentially be like a small AI agent.  It maintained a siloed identity, it routed over an anonymous IP connection, something we called freedom.net, which was built at the same time that Tor was released.  But we worked with the guys at Tor developing the techniques.  We ran the very first attacks on large-scale anonymous IP networks and detailed, "Here are all the ways our system could be attacked", because we believed in security through transparency, not security through obscurity.  It was all built off cypherpunk ideals.

We ended up acquiring the patents to the only other way to do Ecash at the time, which was Dr Stefan Brands, who was David Chaum's PhD student.  He figured out a better way to do Ecash than blinded signatures, or at the time a lot of people believed.  It was a lot more extensible.  So, Adam wrote the toolkit and we used it ourselves.  So, we issued anonymous tokens, because how do you pay for your pseudonym where we don't know who you are?

So, the entire idea was we never could ever break, even with a gun to our head, we could not tell you who one of our customers was, and we actually had the FBI approach us a number of times, because one of our pseudonyms would do something illegal, and we just said, "We can't".  We did it all from Canada, where we could export military-grade encryption, because in the US it was illegal at the time.

Circa mid-2000s, the dotcom crash happened.  I'd raised tons of money, we were running a heavy burn rate, but at the time that was okay, because all these companies were going public.  And the market just wasn't there.  I made a famous joke at a conference Bruce Schneier end up using.  I said, "If you grab 100 people and put them in a room and ask them if they care about privacy, 97 people will put up their hand.  Two weeks later, if you grab those same people for a different survey and ask them if they're willing to give up a DNA sample in exchange for a year's free McDonald's, 94 will put up their hand".  And I said, "That's kind of the problem, is that privacy is ephemeral, it's a long-term thing that people don't generally make good decisions about.  The same way people talk about, 'I care about the environment', but they'll go out and buy two SUVs, because it's convenient for them".

So, 9/11 happened, a lot of people thought we shut down the Freedom Network and all our services in response to 9/11, but it wasn't that.  We had actually already planned.  Just economically, we could not keep sustaining all these cypherpunk R&D projects.  So, the company had to go through a massive retooling, which was really painful.  I had to fire a lot of the scientists that I had convinced to move to Montreal and work with us.  We went from 280 employees down to 58, which was -- we shut down a lot of the advanced R&D projects, but we were working on Ecash projects with Nokia, that was supposed to put anonymous Ecash in everyone's phone.  We were really trying to build a cypherpunk world.

Unfortunately, just business requirements, we had to migrate into something that was more economically viable, which was to sell security, desktop firewalls, antivirus, antispyware, and we innovated at the time.  We knew the ISP business, because my brother and I had run an internet provider.  We were the first people to make it easy for an internet provider to bundle security tools. 

So, when you got your broadband connection, we did it with Virgin, we did it with Verizon, every broadband provider, the provider you call up and say, "My broadband's slow".  They said, "Can we initiate a spyware scan remotely?"  They would scan your computer, find all the spyware and say, "For $5 a month, do you want us to protect your computer?"  So, we changed it from going to the retail store and buying Semantec to just buying it from your telco as an add-on.  It was all branded by our partners, but we built the tools to tie into the call centre, to tie into their billing system, and it became a very profitable business, less exciting from my personal privacy goals, but we got it up to $70 million, $80 million a year in revenue.

But at that point, my heart wasn't in it anymore.  We'd lost our youngest sibling.  I come from a very large family, and we lost our youngest sibling to a battle with cancer.  He was 18 when he was diagnosed, given six months to live.  We kept him alive for two, and I had taken a break from the business to study cancer and build his medical team, and to lead his fight against cancer.  So, you know, my heart wasn't in the business anymore.  My brother was running it, and coming back after that sabbatical, I was just, you know.

Peter McCormack: Yeah, I get it.

Austin Hill: So, I left and went and started doing start-ups, started investing in local entrepreneurs.  I tried to build a gift economy game, based off Burning Man principles, because I had been studying post-scarcity economics, like what happens after money.  I really believe that gift cultures move.  When you get past the singularity and you actually have a culture of full abundance, where all resources are essentially free, where do you end up?  You end up usually in gift cultures.

Peter McCormack: Explain the singularity in terms of what you've explained here?

Austin Hill: Well, different people talk about different things, but at a certain point in exponential curves, you end up on a vertical curve, where all things become possible at an almost exponential rate, so it's impossible to imagine.  So, the Ray Kurzweil singularity thesis says sometime around 2037, 2040, we will reach that point, where we have AGI, so some form of AI that is almost semi-aware, or applied neural networks that are indistinguishable enough; that we'll have full access to material science, nanotech, nanoassemblrs, so we'll be able to conduct and create buildings, objects, programme a reality with robots; and we'll have full access to biotechnology, so we'll be able to do that at a nanoscale level inside of your body, so genetic immortality, reprogramming our bodies, reprogramming organs, reprogramming our environment.

So, when you end up in this type of world, there are some sci-fi writers, like Cory Doctorow, who wrote Down and Out in the Magic Kingdom, about this world where everything is possible.  So, what do you actually build an economy around?  He contemplated something called Whuffie, which was this social capital, which was essentially your karma score.  So, if you were an asshole all day, and everyone has brain computer interfaces, if you were an asshole and everyone determined you to be an asshole, you could come home and find out that your apartment was 80% smaller, because nanoassemblrs had taken away your right to space.

Peter McCormack: It's very Black Mirror.

Austin Hill: It's fascinating!  So, we were playing around with the idea of, "What if we could build a karma society, a pay-it-forward random acts of kindness, based off gift culture?"  That was a koa, it was fun but I missed a few things.  But I was also very active in investing in companies, so I invested in a bunch of start-ups, started playing the role of VC.

Fast-forward, 2009, 2010, went through a bad breakup with my then time fiancée.  I just had been too work obsessed, so I was just burnt out.  I had been building companies since I was 16 years old.  I was 36, 37, the love of my life and I just broke up and I was just lost.  So, I went and played poker professionally for a few years, hired a bunch of poker pros to teach me.

Peter McCormack: How did you do?

Austin Hill: Good and bad.  My ego played too heavily initially.

Peter McCormack: Always the way!

Austin Hill: I walked in playing high stakes and I was like, "I know what I'm doing", and then all of a sudden, I start studying leaks in the game and I start realising that I'm the whale at the table, that other people are taking advantage of leaks.

Peter McCormack: The fish?

Austin Hill: Yeah.  So, I went down a level, humbled myself, hired some pros, hired some experts, and I got pretty good.  I'm able to hold my own and I know when I'm outgamed and I know not to sit at certain tables.

Come 2013, now friends have been calling been calling me since 2010 about Bitcoin, and they were like, "Austin, it looks like Ecash is finally invented", and my answer frankly was, "Fuck you, don't call me on this".

Peter McCormack: Why?

Austin Hill: I was travelling the world playing poker, I was nursing a broken heart, I didn't even look at my email for three months at a time.  I literally was so traumatised by 20 years of living in my inbox, and frankly I'd spent $8 million trying to build Ecash.  I had to fire all my friends who built it for me, and I was like, "I'm glad someone figured it out, but I really don't want to walk down memory lane right now".  I just wasn't emotionally in a state where I could get excited about someone else solving it, because I was still dealing with putting some trauma frankly together, and I just didn't want to think about business.

But I kind of looked at it and I was like, "Okay, it looks like it's a workable system, I'm glad someone's figured it out.  I hope it scales", because all these systems, we'd seen these systems.  I'd seen bitGold, I'd seen all these attempts, and no one ever got one to scale.  But I didn't really go down the rabbit hole.

Peter McCormack: Did people always feel it was inevitable one of these systems would exist, or did it feel like --

Austin Hill: No, we thought it was dead forever.

Peter McCormack: Yeah, just can't be done.

Austin Hill: No, not that it couldn't be done.  Some of the early writings in cypherpunk literally theorised a system like this, "The system will need to be based off --" Jim McCoy and the guys at Mojo Nation came so close, and that had Bram Cohen, who had done BitTorrent.  So, everyone had done pieces of it, but just the right pieces coming together at the right time with the right nurturing environment; that takes some things sometime just lightening in a bottle, it happens.

Fast-forward to 2013, thankfully Adam didn't want to give up.  So, he was pestering me all throughout 2013 saying, "Austin, I need to talk to you, I need your help, this Bitcoin shit is real".  He had been looking at it more seriously, because he had been busy.  He had sold his company that he created with a bunch of ex-Zero-Knowledge guys.  They sold it successfully to, I think EMC ended up buying it, a company called PiCorp, and he was their CTO.  So, he was busy doing a post-acquisition. 

But I think he was finishing his vesting period at PiCorp and had really begun to dive in, and really started looking at all the ways that it didn't meet the cypherpunk ideal.  It wasn't anonymous enough, it wasn't private enough, it was very hard to upgrade without disenfranchising early users by performing regular hard forks, which went against the ideals of Bitcoin.  So, he was spending a lot of time with Greg Maxwell, with Pieter Wuille in the Bitcoin Wizard's chat room, coming up with a bunch of ideas, how would we do this; how could we add things like blinded signatures; or, how could we add some cryptography to make privacy?  Confidential transactions, for instance, was some he and Greg Maxwell started coming up with.

But they were talking about, how can we actually bootstrap or layer in more fungibility, more privacy, to a system that's already built?  So, that's where the concept of sidechains had come up.  Could you add extensible pegged networks pegged to Bitcoin to allow extensibility to happen on separate chains, where you don't need to invent a new currency? 

So, it was 10 December 2013, Adam finally flew to Montreal and he said, "I'm flying to Montreal.  I will not let you ignore me another day".

Peter McCormack: What day was that?

Austin Hill: 10 December 2013.

Peter McCormack: Okay.

Austin Hill: He said, "Read up as much as you can on Bitcoin before the meeting, because I'm not going to let you ignore me anymore", thank you, Adam!  So, we sat down and he essentially told me, "You've got to go down the Bitcoin rabbit hole".  I was able to do it quite quickly actually, because I had all the history.  I'd done Ecash, I knew a lot.  So, by seven or eight days later, I'd read everything on the internet, because I had this ability to process information, but I read almost everything on the internet, I'd watched most of the speeches at 2X speed on YouTube!  I just devoured everything I could.

Peter McCormack: Did you find any holes in it?  Were there things you were like, "I'm not sure about this"?

Austin Hill: No, just the ones that Adam and some of the Bitcoin Core developers were talking about.  The system was very hard to upgrade without disenfranchising people.  There were some exoteric attacks, but they had already been discussed, so some stuff that Bitcoin still actually has some vulnerabilities to.  There were attacks at the mining pool level with BGP routing, so you could re-route payments in mining pools; there were problems with Stratum.  But some of these are known, and some of the work that Matt Corallo did around BetterHash and that still needs more community support, that just separates out hashing mining pools from the votes.

So, this was something that we were trying to do at Blockstream, but we just were trying to do too much, but it makes mining way more democratic and way more decentralised; because even though you pool hashing and mining pool rewards, you don't have to pool the policy vote.  So, everyone gets to vote on an upgrade, or vote on a protocol upgrade, without having to give the mining pool their vote.  And it has a bunch of other improvements, how Stratum is working and how the mining pools are more democratic.

There were various network level attacks.  If someone controls the entire network, BGP routing, and causes massive network forks, there are ways to do various -- and these are now written up and academically studied, and Bitcoin Core and people are talking about various responses to those.  But I was talking to Adam at this point, 12 hours a day over Skype, talking about what kind of company would we create; what would be the principles; how do we make sure we weren't a centralising force, because if we bring together all these Core developers, we want to make sure that we don't end up becoming the borg.

So, we were designing contracts that actually gave the developers more rights than the company had, so we actually gave all the developers this morality clause that they could say, if the company ever acts against the interests of the Bitcoin community, they could trigger a massive payout that would almost bankrupt the company, which was totally counter to -- and I had to sell investors on this.  I had to go to investors and say essentially, we're giving our employees a poisoned pill that can blow up the company if we ever act immoral.

Peter McCormack: But required.

Austin Hill: Yeah, but I was good at raising money.  And I literally went to our investors and I sold them on the idea; this was the pitch.  Everyone thought we had this masterplan for Blockstream, that we had some secret revenue plan to take over, or keep block sizes small, so we could profit.  We had no plan.  I literally went to our investors and I said, "You need to look at Bitcoin as the Manhattan Project of the Financial Singularity.  The world of finance will be completely remade with Bitcoin at the core, and it is literally like creating atomic fusion that Feynman and Teller and Oppenheimer did". 

And the responsibilities and the ethics and the number of brains you need around that project to invent that Financial Singularity, and to think through all of the follow-on technologies, because coming out of the Manhattan Project gave us the next 70 years of economic progress in the world.  It gave us computers, it gave us new forms of maths, radiotelegraphy, oscillography, you name it.  The number of offshoot technologies and the ethical implications, because all of a sudden you invented something that had the power, or that could potentially in the wrong hands, or misused, bring about the end of society.

So, I literally said, "We want to create the Manhattan Project of Bitcoin, bring together all the scientists".  I said, "We're going to need a shitload of money and I have no idea how we're going to make money, but we'll figure it out".  I went to seven or eight investors that I trusted, who had the vision.  Reid Hoffman was one of them.

Peter McCormack: LinkedIn?

Austin Hill: Yeah.  But beyond that, I mean Reid and I knew each other; he and I had a relationship.  He funded Mozilla and was on the board of Mozilla, because Reid is a very deep thinker.  He had been there at the early days of the internet.  He was friends with a lot of the guys from Creative Commons.  They had done work on, "How do you design the protocols of the internet to keep it out of the United States' hands, when the ITF took over standards and made it so that domain name space wasn't just controlled by the US?"; when Creative Commons was writing the rules to make sure that not everything on the internet could be copywritten, that we would have copy left, and Creative Commons licensing.

So, Reid funded Mozilla to ensure that it wasn't just Google and Microsoft defining the standards of the web, and I knew Reid to be a deeply ethical and long-term thinker.  That's ultimately why we chose him to invest in the company, and was eternally grateful and never regretted that.  And he actually helped us, like some of the other people we brought in.  Danny Hillis was one of the original creators of some of these internet protocols.  He was there at the beginning of the internet.  So, we brought him very early on to talk to us and advise some of our people saying, "How do we develop -- we don't want to create standards bodies, because standards bodies go against Bitcoin; but how do we make sure that some of these things have some principles or some standards that follow like the ITF loosely-based consensus?"

So, we were able to bring in some incredible people, who advised us early on how to think through the evolution of the Bitcoin ecosystem and how to design the company.  And some stuff we did right, some stuff we failed miserably at.

Peter McCormack: How did you balance the idea of building a company, which ultimately would want to be profitable, with also wanting to support the Bitcoin Network and open-source network, because they're intrinsically linked, but they are also two separate entities?

Austin Hill: They don't need to be, but it was unique.  So, we had examples of Red Hat.  There are open-source companies who have done incredibly well supporting and generally, in fact, the best open-source projects have a whole bunch of companies who have learned to make money in the open-source ecosystem who can then fund it.  But at the time, you need to remember that no one was spending money on the Core developers.  I mean, almost all the Core developers had day jobs elsewhere.  They had an incredible amount of stress and personal attacks, they were being trolled, some of them had bounties put out on their lives, essentially for assassination, politics.

Peter McCormack: Didn't that crazy Romanian guy who died recently in Costa Rica, he was going after Pieter Wuille, wasn't he?

Austin Hill: That was one of them.

Peter McCormack: Yeah, I mean that's public knowledge.

Austin Hill: Yeah, but when you're Pieter and you're trying to do good work in an open-source system and all of a sudden, people are putting bounties on your head to have you killed, it's not exactly conducive to a healthy…  So, we looked at it and we said, "We've got to help these guys.  We've got to give them stable salaries, we've got to give them freedom to continue to work, we've got to give them financial support", and no one else was doing it.  Coinbase wasn't investing in the open-source community.  Most of the people getting rich off Bitcoin in mining weren't contributing.  To their credit, some people, like the guys from Chaincode Labs had been thinking about it.

Peter McCormack: Yeah, great guys.

Austin Hill: But they didn't know the developers, and that was one of my big regrets.  They came to us early on and said, "How can we help?" and we were like, "We got this"!

Peter McCormack: Well, they're helping now.

Austin Hill: Oh, so much love for those guys.  And frankly, when Blockstream went through some of its changes and some of our co-founders needed to find a new environment, because start-ups are messy, sometimes it doesn't always work; I personally, frankly, was doing too much at Blockstream and I wasn't taking care of my health.  So at one point, I needed to step down and leave, and Adam took over the reins of leadership.  That wasn't easy on the company.

Peter McCormack: How was that between you and Adam?

Austin Hill: I'm eternally grateful that he stepped up and took it on.  And I've learned the company can't have a backseat driver, the company needs one leader.  And so, I couldn't be in the corner telling Adam everything I would do differently; it wasn't fair to him, it wasn't fair to the company, and the board needed to support him.

Peter McCormack: This is my problem with DAOs.

Austin Hill: Oh yeah, DAOs are a joke.

Peter McCormack: I was just in a meeting previously.  You know about the football idea, and somebody said to me, "Why don't you do a DAO?"  I was like, "Would you run your company with a DAO?"  "No".  I was like, "Why?"

Austin Hill: It all comes down to human governance.  Show me a single DAO that can be encoded with the logic and the nuance needed for human decision-making, that needs to evolve for new facts over time.  And the whole idea of DAOs is that, if they are upgradeable, they are upgradeable by some vote.  So literally, you're going to take the worst parts of democracy with the worst parts of encoded human nuance and logic and combine them, where 51% of the people can be convinced to vote one way?  We can't even get people to show up and vote responsibly in a political election.

Look at most corporate votes.  How many people show up and vote for anything that a company actually does?  So, you end up having these autocratic boards that are run by small groups of power leaders and people just go along with it, except for when you have a minority shareholder group in the case of shareholder takeovers, that force the board to take someone onto the board.  And then usually, they get paid off with company assets and sent packing through greenmail.

So, when you actually study how governance and companies work, you understand that the idea of a DAO is just a ridiculous concept, with today's technology.  It wasn't easy, but Adam and I have been friends for 21 years.  At the end of the day, we remain friends, we talk regularly.  I support him and I support what he's doing at the company.  It hasn't been easy.  I think he was pushed out of his traditional comfort role as a scientist and he had to learn some new skills as CEO, but he's doing incredibly well.  I mean, the company just had a monster round.

Peter McCormack: Yeah.  The suite of products they have now is incredible.  I was on the website the other day, it's the first time I've been on for a while.  It's like, "Holy shit, they do this, they do this, they do this?"  It's a full suite of Bitcoin products.

Austin Hill: Yeah, and a huge amount of those are not for profit, and we literally told our investors, "We will have to subsidise some products that are just good for the ecosystem that may never have a profit".  But the idea, and you asked, "Why a company?" was because, if you look at most companies that can effect change, they're usually driven by a capitalist and economic engine that gives them power and growth and revenue.  You can call them good or bad in various situations, but Google has promoted certain things I really believe in.  They've also done a huge amount of damage to privacy and some unintended consequences.  That's why jokingly, they stopped using that "Don't be evil", because they were getting mocked.

Peter McCormack: I know, it was like a confession!  It's like, the day they did it, it's like, "Yeah, we admit, we're now evil", what the fuck?!

Austin Hill: That's why when we created Zero-Knowledge, I jokingly said, "We're going to call it 'Can't be evil'!"

Peter McCormack: Yes!

Austin Hill: But actually, even then, the developers asked me to stop using it, because they pointed out that evil is such a subjective term, what one person determines, and they didn't want it being mocked against us the same way it became a mocking term.  Because, they were like, "Okay, we think we can't be evil, because we're designing things with encryption, but other people may not agree with our decisions on how we're using encryption".  We actually had written out all these principles of what "Can't be evil" means: fully encrypted protocols, attack vectors, always security through transparency, not security through obscurity.

Peter McCormack: What was the Google kicker; was it when they agreed to censor content in China?  I'm trying to remember.  Were they not in China, and then they went into China, but agreed to censor things like Tiananmen Square, and that's when --

Austin Hill: Well, Google end up pulling out of China mostly.

Peter McCormack: But was that when they removed the "Don't be evil"; was it about that time?

Austin Hill: There were a number of things that were going on at the same time.  I think they had started doing some AI research with the military, and then their employees protested that, which is still a very big open issue, because if you look at what's happening with the Chinese and the Chinese use of technologies, where it is militarised, fully state-funded, and they're making rapid progress, some would argue that actually using the best of Silicon Valley tech with Defence Department spending…  I mean, hell, DARPA funded the internet, a lot of advancements and technologies of energy have come from government funding, advanced scientific funding, that the private sector can't do.

So some argue, Peter Thiel and some of these guys have argued that if you don't actually align with the government to accelerate the development of these technologies and to become proficient at them, that you're leaving the United States at a huge disadvantage.  Other people argue that why should we trust the US Government, who has been frankly a little bit war-happy and loves to use militarisation as a foreign policy tool versus the state department; why should we equip them with better access to technology that makes it cheaper, faster, better to be the armchair police of the world?

Peter McCormack: It's one of those impossible decisions, you're damned if you and you're damned if you don't.

Austin Hill: Yeah.  But anyway, "Can't be evil" was something we played with, but the principles and the founding of the company was just so misunderstood.  Everyone started attacking the company, like we were trying to act like some evil overlords, that we were a centralising force, even the Blocksize Wars, which was really hard on the team, and I think on me too, because I was seeing our name dragged through the mud by some really dishonest players, and I don't think their names even deserve credit.  But I've made this analogy before, but --

Peter McCormack: I know who you're talking about.

Austin Hill: Yeah, and it was just such a dishonest argument, because if you're talking about the security protocols for a nuclear reactor, do you really think everyone who uses power has an equal say on that?  So, the guy who orders power from the nuclear reactor, do you think he should have an equal say on how the protocols of your nuclear reactor should work --

Peter McCormack: No, of course not.

Austin Hill: -- versus the scientist who actually built nuclear reactors?  That's the one Nick Szabo always laughs about and used as an example.  He was like, "90% of the people arguing about this have no say in it, because they don't have the scientific qualifications to understand what they're debating".

Peter McCormack: Doesn't that go back to Plato's argument against democracy?

Austin Hill: Yeah, but not all things should be a democratic vote, because not all people should have equal say in all arguments.  So, the analogy that I've used is, let's say that aeroplanes are invented, it's early on in the creation of the aviation industry and one early entrepreneur is really, really smart and he buys aeroplane.com, the domain name, and he's an incredible marketer.  He sets up ticket sales and he's an incredible promoter of aeroplanes.  He sells more tickets than anyone and he promotes to everyone, "Get on an aeroplane".

Then all of a sudden, he starts screaming about the cost of aeroplane tickets to Hawaii, because the planes aren't big enough.  So, he comes in and says, "Okay, I want you guys to start strapping fold-down chairs on the wings of aeroplanes, because if you can add 30% more passengers to the plane, I can drop the cost of an aeroplane ticket.  And if the cost is cheaper, then more people will fly, and we need to build aeroplane tickets for the world.

A bunch of engineers say, "You know what, we're more interested in the long-term viability of the aeroplane industry, and if we start killing passengers who are strapped to our wings, or we weigh down a plane with too much weight and the plane crashes, we're going to do more damage to the ecosystem.  So, give us a few years to design a new plane that can actually handle more weight".  This person says, "You don't understand economics.  I understand how to sell more aeroplane tickets, because I own aeroplane.com and I should be able to control how the industry goes, because I own aeroplane.com.

Now, I won't use names here and I don't think --

Peter McCormack: Jeremy, do you know who he's talking about?  Everyone knows you'll be talking about Roger.  I've a tricky relationship with him; I'll come back to it.

Austin Hill: But literally, the person comes up and says, "You engineers are trying to hijack the entire industry because you refuse to do something that I believe is safe that you're telling me I'm not qualified to know that's not safe" and spins up lies, spins up an entire economic attack, hijacks every single discussion, literally making an argument that they're not qualified to make.  I refuse to ever step in the room with this person and have a debate with him, because I just refuse to debate with intellectually dishonest people.

Peter McCormack: Yeah, I have a tricky relationship with Roger in that I completely agree with you on your thesis.  I trust the engineers of Bitcoin to make the decisions.  I trust Greg Maxwell, Pieter Wuille and Matt Corallo and all the smart people who work on the background; I trust them absolutely.  Roger has been very good to me privately in regard to one of my lawsuits and was willing to help me out significantly without anything in return.  Most people would have expected something in return.  So, I think it's a shame Bitcoin lost Roger, but I think that was down to Roger, but I think it's a shame he didn't recognise what you're saying and was just still out there promoting it.

Austin Hill: The great thing about being a God and being Bitcoin Jesus is you can always have redemption.  So, if he's willing to get back on a cross and crucify himself, I think people might actually invite him back!  Are you familiar with quantum thinking?

Peter McCormack: Why am I aware?  Did somebody else -- hold on, did you tell me about that the other day when we were on the Zoom, or did somebody else tell me about it?

Austin Hill: So, Nick Szabo coined this --

Peter McCormack: Yeah, Nick Szabo, and I read the article.

Austin Hill: So, the idea of quantum thinking is that, when you truly understand your topic, you understand it, and it's also used in the term in sci-fi, grok, which is Michael Valentine Smith.  When you grok something, you understand it at so many levels that you can both love and hate it at the same time.  You understand it in its duality. 

Quantum thinking is the idea that I can hold two equally opposing thoughts and I can fight either side of an argument.  Debate clubs have been doing this for years, when you randomly get thrown on either side of a debate and you need to prove your debating skills by either not just arguing for the side you agree, but can you make an equally impassioned argument for the side that you don't agree to?  That shows that you understand a topic well enough that you actually can look at both sides.

Peter McCormack: What journalists should do.

Austin Hill: Yeah.  I mean, I can hold both realities.  I have heard and seen Roger to be very generous on a personal level to people and extend support, financially or otherwise.  I can hold that he doesn't have to be an evil, horrible person; to also hold the belief that he's been totally intellectually dishonest, lied and hurtful and launched attacks at people I care about, and made their lives very miserable.  Both things can be equally true.

Peter McCormack: Yeah, that's fair.

Austin Hill: Human beings are complex individuals.  They're not always one thing.  I've made tons of mistakes in my life, I've been really shitty to some people in my life I care about, because I was dealing with my own demons at the time.  That does not make me necessarily evil; it's just at that moment, I wasn't the best version of me.  Hopefully, I have enough maturity that when I am at a different state in my life, I can go back and clean up that mess and deal with it honestly.

Peter McCormack: Yeah, well, we will see with Roger.  He's been very quiet recently, so I have no idea.  I would like to see him come back and do the necessary things for that to happen.

Austin Hill: I think various parts of the community forking off was the best example of what Bitcoin is.

Peter McCormack: No, I agree, it was a great stress test.

Austin Hill: Yeah, but it also allows you to let all the crazies go sit on crazy island.

Peter McCormack: We've still got a few crazies!

Austin Hill: But eventually, look at what happened, they forked themselves three or four times.  They saw how hard it was to actually build a healthy open-source community.  One of the first speakers that we brought into the Bitcoin Scaling Conference in Montreal was an expert on open-source toxicity, toxicity in the open-source community.  Everyone was so focused on the block size rewards, but she was an expert of the University of Montreal McGill, who had studied how apathy, arrogance, some of the worst parts of geek can be very arrogant thinking, lack of listening skills, was destroying various open-source communities.  And they went through examples of open-source projects that have forked, that had built this function in them.

So, we were trying to think about some of these issues, and a lot of them, under the guidance of some of the Bitcoin Wizards, just developed very healthy protocols for, how do you deal with decision-making; how do you deal with meritocracy, so people get their RFCs, or their BIPs, which was based off the RFC and ITF protocol process?  They could get their BIPs considered, but if they wanted to make the change, they had to build enough consensus in the community, and they needed to study a whole bunch of comments, that would allow people to do proper risk assessment, because people don't understand.

In traditional software projects, for every 100 hours of coding you do, you might do 10 hours or 15 hours of tooling, testing and QA.  NASA developed the model for anything that went into the space shuttle, that for every 100 hours of coding, you did 900 hours of testing, because their attitude was, "We can never, ever lose someone in space.  And if we do, we will ruin the entire space industry for the planet".  And they have that approach to engineering that was risk avoidance, and it took principles from civic engineering, like when a bridge gets built.  They stress test and they think about anything that go wrong, and you literally design around that principle of, "This bridge can never fall down".  Nuclear engineering has the same safety requirements. 

Bitcoin Core took that approach, and that comes at a cost, it moves slow.  It builds risk and tolerance.  And so, the amount of unit test, and the amount of testing and backwards-testing, that's what led Bitcoin Core to discover flaws in open SSL that have gone undiscovered for almost 15 years on the internet, because they were doing back-testing and cryptography testing that no one else had invented.  They invented a series of tools for secure coding, like Gideon, which allows you to build things and verify your builds, that no one had ever invented on the internet.

Peter McCormack: Yeah.  I wonder how Ethereum's approached theirs, like for every 100 hours coding, they do 25 minutes testing!

Austin Hill: They took a different approach.

Peter McCormack: Breaking things!

Austin Hill: Yeah, move fast and break things.

Peter McCormack: Move fast, break things, lose your money.

Austin Hill: I personally think that was like taking nuclear energy, which was the power of blockchains, the power to create currencies, and essentially putting it in a box and handing it out to children, and we saw the effect of that: ICO scams --

Peter McCormack: DeFi hacks.

Austin Hill: DeFi hacks regularly.  When you're building a house of cards on a bed of sand, you're going to have something that falls down regularly.  And if the attitude is, "Who cares who gets hurt?  We're just innovating, we're just moving fast", then you bring regulatory risk on the entire ecosystem, you bring burning of people, when they're first experience with DeFi or with coins is losing all their money in an ICO scam.  The moral hazard risk to what you've created is quite high.

But to be honest, people love to beat up on Vitalik for this.  Like I said, there's dual thinking.  I think Vitalik has a lot to answer for, but at least in the world of shitcoining and scams, he actually stuck around.  You look at most of the people who created Ethereum around him, they were all liars and scammers and they profited hugely, and they left him holding the bag.

Peter McCormack: I do like that Bitcoin's cohorts are nuclear engineers and space scientists; that's pretty fucking cool, but it's necessary.

Austin Hill: Yeah, and those people need support and they need an environment to create in that is outside of commercial interest.  Even some of the accusations about Blockstream got so ridiculous at one point.  Like, we took money from Digital Currency Group, frankly because Barry Silbert and Meltem Demirors at the time were incredible investors.  They invested in all the Bitcoin exchanges, and we knew we needed to have better relationships with exchanges if we wanted to get things like Liquid and sidechains adopted.

We took a small investment, very minority, a six-figure cheque when we were doing $21 million -- or actually, they came in on our Series A, so small six-figure cheques when we were doing a $57 million round.  But at the time, that was just DCG.  A couple of years later, they created a new fund with Mastercard, and so there's these conspiracy charts on the internet that show that Mastercard controls Blockstream, or the Bilderbergs control it!

Peter McCormack: I've seen them!  I know, the Bilderbergs.

Austin Hill: Totally ridiculous, it has no bearing on the truth.  We took some money from AXA, non-minority, non-voting.  Their name was first on the investment list, because we named the investors alphabetically, not by size of investment.  AXA Strategic Ventures, the insurance company was looking at uses of Bitcoin and technology in the insurance industry.  Frankly, they're thinking very long term and the potential for Bitcoin for insurance industries is massive.

The insurance industry has to deal with payouts and has to deal with creating annuity funds over 20-, 30-year life terms for policies.  What better asset to own than Bitcoin if you're thinking about long-term gains in a deflationary world, when your current currency is being debased at 20% a year?  Aside from that, you look at foreign markets, where they're trying to deal with payments and micropayments.  You can't charge someone $5 a month for insurance when the cost of a transaction in that part of the world is $15 minimum transaction fee.  So, if you're not looking at micropayments and things like Lightning Network to be able to do payment networks for insurance, then you're ignoring 3 billion people in a foreign market.

So, the opportunities for insurance companies to take advantage of Bitcoin are huge, and we were looking at, could we use some of the ways insurance companies use transparency of products, reinsurance?  There's a whole bunch of risk in the system that we thought Bitcoin and blockchains could benefit.  So, that's why you take on an investor, so that you can learn from each other.  And the fact that, I guess their Chairman had been involved in Bilderberg and attending, I never knew; I found out later.  And frankly, some of the conspiracies, you know.

Peter McCormack: I know.

Austin Hill: Some people believe them or not, but I've been at some of those conferences.  I've never been to the Bilderberg, but I've been invited to conferences that are very, very exclusive, that are 300, 400 people invite only, that have attendees who are heads of state, who have the same attendees who go to Bretton Woods.  Frankly, I welcome the opportunity to go into those rooms, because I get to learn from these people.

I got invited to some central bank meetings that were hugely informative for me, teaching me how central bankers are thinking about Bitcoin, so I could think how we would react to their moves.

Peter McCormack: How do you think about the progress of Bitcoin now?

Austin Hill: I couldn't be more excited, I couldn't be more happy.  Some of the things that I think we were -- not we, but the community were very smart to…  You need to remember, there are some smart, smart people involved in Bitcoin, who are thinking at layers and levels of strategy that are 10 to 15 times deeper than anything you or I operate on, and I consider myself a deep strategic thinker.

Peter McCormack: Hold on, if it's 10 from you, it's a good 1,000 from me!

Austin Hill: I mean, I went at one point to Greg Maxwell, and I was trying to argue a point.  You never get humbled faster or quicker until Greg schools you, because you want to talk about an incredible mind!  One of my greatest moments of joy frankly was, I got to attend a meeting that I had set up with one of the top cryptographers in the world, who had invented some of the cryptography that's just now being considered in Bitcoin, in Taproot, and he's a professor at Stamford.  We were trying to evaluate whether or not certain algorithms should be trusted yet, even though they'd been out there for 12 years, and this guy invented the algorithm.

So, I organised a meeting with Adam Back and Greg Maxwell.  Adam Back has a PhD and is a learned cryptographer; Greg Maxwell is self-taught.  He is just a brilliant mind who has studied.  I watched them at the whiteboard and I literally felt like I was at the Manhattan Project watching Feynman and Teller working.  It was like this Beautiful Mind moment, and I was barely carrying on the conversation.  I have hung out with cryptographers enough that I understood, and they're doing maths and they're doing protocols.

They finally ended and Adam goes to this professor, he goes, "Well, you wrote the algorithm, would you trust all your money on it?" and he goes, "No, not for another ten years"!  I mean, this is the level of thinking, because we've seen crypto algorithms fail.  So, when you have projects that are "move fast and break things, let's use the algorithm that just came out two years ago", some of the SNARK Zero-Knowledge proof stuff that is being used and contemplated, we've seen four or five of the Zero-Knowledge protocols break.  I mean, Zerocash and Zooko at least track cryptography and he understands, but some of the protocols early on that they were using have flaws on them.  So, cryptography is not somewhere when you want to use the latest, greatest; you use the proven and the strongest that has the most reliability on it, because that's risk avoidance.

So, I was arguing with Greg Maxwell, trying to argue actually for a more political approach to the Blocksize Wars, because I was getting beat up and I was getting yelled at by all the industry players that wanted 248, or some, and I was like, "Greg, come on, SegWit will buy some, but can't we, just to appease people, just to alleviate some of the pressure in the community?" and Greg was like, "Austin, I'm sorry, we do not build bridges based off of alleviating the community pressure.  We don't add four lanes to a bridge when it's unsafe, just because people want to get to work faster", and he proceeded to go through with me all of the things that I'd never considered.

He walked through me how all the exchanges had done no engineering work and were stuffing the blockchain, that Coinbase still, for years later, did not do proper batch ordering and was still dragging its feet.  He was like, "If they continue to kick the can down and expect the open-source engineers to do risky engineering because they won't invest in using the protocol right, where does that end us up with?"  He goes, "We need to have some constraints, because these people need to start using the resource properly like a scarce resource, and there's 50 things they can do on an engineering level that will make their use of the blockchain so much more efficient, and they just don't do it, because they're too busy adding shitcoins which make them money, as opposed to investing in infrastructure", and he was right.

Peter McCormack: He was right.

Austin Hill: And certain exchanges started to do proper batch ordering, did proper use of it, and they have found their costs on Bitcoin lowered incredibly.  And Bitcoin would have been way worse off, because we would have been less decentralised and more susceptible to attacks if he had been wrong on that.

So, even in the New York Agreement, we went up against Barry Silbert.  Barry Silbert was on the wrong side of an argument.  I appreciate Barry for all that he's done, but that doesn't mean he was right in this instance.  And frankly, Wences is the only person in the Bitcoin ecosystem who had the moral fortitude to actually come back and say, "I was wrong".  A whole bunch of people on the wrong side of the New York Agreement have yet to come back, but my life doesn't change based off getting an apology from them, but it's just nice to see people like Wences actually stand up and say, "Hey, I actually was on the wrong side of this".

Peter McCormack: Yeah, and that's totally fair because, look, I don't have the knowledge you guys have and 2017, both arguments made sense to me.  So, yeah, more transactions, that makes sense, it scales faster.  Oh, yeah, smaller block size, decentralisation makes better.  But I ended up just siding with the people I trusted in the end.  Who do I believe?  Jamieson Lopp, whoever.  But I've had conversations where Jamieson considered larger blocks.  I think even at one point, Adam was having conversations at it.  Everyone's had the conversation.

Austin Hill: Listen, 248 was a viable proposal and Pieter Wuille had actually coded up, and things were being considered.  But that was before Luke figured out how to do SegWit as a soft fork.  That was just an incredible revelation, because once we saw that we could roll in SegWit as a soft fork, that just opened up a realm of opportunities that allowed us to do protocol versioning, it allowed us to deal with changes we needed for Lightning to become viable, which would give us a proper Layer 2, because we could finally deal with transaction malleability, because that was the one thing blocking it.

So, when we finally realised that we could do SegWit as a soft fork, that just became the best engineering option.  And when the best engineering option presents itself, you don't go back and say, "Okay, we're going to engineer an entire ecosystem for the world based off a broken, flawed compromise when the better engineering solution is there".  So, the engineers stood by the principles, and that had consensus.  80% of the coders who were actually coding and working on the project all agreed with the roadmap to make SegWit the priority, and then to do block size extensions through the extended block size you get from SegWit, and then focus on Lightning and developing Layer 2, and they were right.

Now we have Strike, now we have what's happening in Venezuela, now we have a wealth of opportunities coming from proper L2 engineering, as opposed to some other projects that have tried to do L2, with sharding and with all these other hacks that frankly, like I said, is a house of cards built on a bed of sand.

Peter McCormack: So, when you're thinking about Bitcoin now and maybe Greg and Adam, what are the risks you tend to think about now?  My assumption is over time, certain risks aren't as big as they are; there's other things you have to focus on over time as Bitcoin becomes bigger.

Austin Hill: Well, I won't speak for Adam or Greg.

Peter McCormack: Yeah, okay fair, yeah.

Austin Hill: Some of the more interesting discussions I've been having lately are with Jeff Booth.  I think he's one of the most incredible minds in the Bitcoin space and such a welcome addition, because he understands the language of central bankers, he understands the language of economists, who are bought into this MMT monetary bullshit, and in fact some of them are actually advocating for never-ending printing of money and never-ending deficits. 

He's actually gone through and just proven, from a very valid basis, in his Price of Tomorrow book, which is the best book I recommend for even the hardcore bitcoiners that haven't read this book, because it comes at Bitcoin as a solution to a set of problems that they may understand inherently, but he comes at it from the fact that we have two exponential curves that are about to run into each other.  

One is the exponential curve of the singularity.  So, technology advancing at exponential rates should make things deflationary, should make things in our life cheaper, faster and more abundant.  The only reason they're not is because we have a central bank that's based off inflationary targets, a central bank that has inflation as its core goal, which by the way promotes more consumerism, buy more, spend more, damage the planet more; the effect it's having on the entire planet… 

Instead of figuring out how to get things cheaper and faster and more abundant, you have to do more, and that drives prices up and keeps prices artificially up.  The price of a cell phone, my iPhone 14 should, if it followed Moore's Law, be $100.  Instead, it's $1,500, $1,800, $2,000.  That's not because of anything that Apple is doing, Apple needs to keep its profits up, yes, but it's to promote bad central banking and the government involved in central banking.

So, Jeff understands this, that if you actually want to bring these technologies to the masses and you wanted to bridge the democratisation of these benefits, and you actually want to improve every day, especially the middle class, because this is one of the biggest dangers, that we're going to build a society of haves and have-nots; and all the bitcoiners, who believe they can go live in citadels have something coming to them.  Jeff has this incredible line, "Show me any point in history when you could build walls big enough to keep the haves away from the have-nots", especially in a world of singularity tech.

So, not even with bitcoiners inside of their citadel as the target, let's imagine a world, and this will get into some Vulnerable World Hypothesis, let's imagine that I'm a Venezuelan student.  I'm 15, 16, I've seen my mother and sisters raped by gangs, I've seen a dictator who's totally corrupted the system, frankly stole bitcoiners, miners, ASICs; people don't talk about this, but it actually happened.  I know some of those people who actually had to flee and were running the ASIC miners, who are now expats, had their entire Bitcoin mining operation stolen by the Venezuelan Secret Police.  And I try and make my way to the United States.

I'm told I'm not of the right economic opportunity, I'm told I'm not the right colour.  So, I get sent back and I land in Mexico somewhere, where I'm also dealing with gang warfare, total corrupt state, due to bad drug policy, narco-capitalism.  I'm angry, I'm frustrated, I'm pissed off.  I've seen my entire family wiped out through corruption of money and state.  I see all these people living in the United States with their walls built.  What do you think's going to happen in ten years? 

You don't think someone like that isn't going to go to the university and download some plans for CRISPR-55, for synthetic biology, for autonomous drone technology and say, "You know what, I'm going to inflict my will on you.  I'm going to send a fleet of drones to disperse COVID-55 that's weaponised, custom-designed and will wipe out 20 million people".  Or, anyone can be a victim, "I'm going to do it against the Jews", if the people are antisemitic and believe that the Jews control the world's money, which is ridiculous, hateful.  But wherever they want to do it.  What was the famous saying?

Peter McCormack: One's man terrorist is another man's freedom fighter.

Austin Hill: One's man terrorist is another man's freedom fighter, right.  But this person, when they have access to exponential technologies, this is Nick Bostrom's Vulnerable World Hypothesis, which has been obsessing me lately which is, if we don't reduce the threat profile -- because, as a cypherpunk, I was taught to think about the world in threat modelling.  So, you approach everything based off threat models, and we did this at Zero-Knowledge extensively.  We would publish threat models that essentially you go through and you think through, "How can this system be attacked?" at every single layer, at every single level.

So, when I'm thinking about the future and I'm thinking about how do we bring the world into this hyperbitcoinisation, one of the biggest concerns I have is that we don't deal with lifting all boats equally fast enough.  So, that's why Venezuela's so important, but it's why it's also important that we have that happen in multiple Latin American countries.  I think it's important that if we could see six or seven Latin American countries do what is currently being done in Venezuela, where we have democratically elected responsible governments, using Bitcoin and using Bitcoin financing to create some of the best financial products, better as alternatives to IMF debts, which is going to piss off the IMF, I think you c an actually build a better bond product financed by Bitcoin and actually start saving some of these nations in the currency wars that are about to happen.

Peter McCormack: So, it sounds to me then, you're starting to think about -- the things you're thinking about with regard to Bitcoin are not so much contained now within the protocol, it's the products we can built outside of it that can help move society forward?

Austin Hill: It's the society and it's the impact and it's the transition path of how do we make sure that Bitcoin is the economic ladder?  Bitcoin is the economic ladder than can save the middle class, it can move people up the economic levers, outside of central banks.  How do you do it in the United States, when you have a system that is so US dollar, US Fed.  And the US Fed central banks are going to do what US Fed central banks are going to do.  But we've seen at the local level, Miami, New York, mayors.  So, Salim Ismail, I don't know if you know Salim Ismail?

Peter McCormack: Yes.

Austin Hill: Salim is doing some incredible work at the…  His thesis, and he and I have discussed this for a number of years, is that you can do at the municipal level much more democratic, governance, city-hacking, than you can do at the federal level.  Because at the federal level, it's all regulatory capture, it's all politics and long-term interest and you have to lobby.  But at the municipal level, which actually makes a difference in everybody's everyday life, what if we hyperbitcoinised a city?  What if you do it based off good candidates, actual good candidates.

So, there's this incredible internet entrepreneur, Farhad Mohit, who is running a political initiative called The Good Party, that is looking at how to break the two-party system inside of the United States.

Peter McCormack: A bit like Andrew Yang's trying to?

Austin Hill: Yeah.  So, how do you actually use this system to get third-party candidates actually on the ballot and break the logjam?  What if you were to combine a Bitcoin candidate with good politics, that's not funded by lobbyists, not funded by dark money, that's totally transparent?

Peter McCormack: Bitcoin fixes this.

Austin Hill: Bitcoin fixes this.

Peter McCormack: Well, listen, I mean we've got a $1 trillion dollar market cap right now.  You go forward five years and we may have a $10 trillion market cap.  This will become a lot easier, because you have capital.

Austin Hill: Well more importantly, you can start actually representing politicians who have Bitcoin and the interest of financial sovereignty, financial independence of their citizens at their best interest.  And the types of things you can do are amazing.  I mean, I could blow your mind with some of the stuff we're thinking about and talking about, but you could literally hijack an entire town, create Bitcoin incentive bonds for the citizenry, where you create a totally new tax incentive system where a candidate comes in and basically says, "If you stay in the city for five to seven years and you prove that you're working and staying in the city, you get --", it's a new form of UBI backed by Bitcoin, "-- access to a Bitcoin bond. 

You can draw down and borrow fiat against it, but you never sell your Bitcoin, it's locked up over seven years, you have to prove you're a citizen of the town, you have to prove that you're a viable, economic player and a local citizen, so you vote, you stay, you live and we'll give you this Bitcoin asset, and you can draw down regularly fiat loans against your Bitcoin asset, against it, to finance your life, to finance self-improvement, university, start a company, start a job, and we will literally give you, as a citizen of our town, a Bitcoin bond and the seven year vesting.  When you've proven that you've been, the entire thing vests and it becomes yours, and you pay taxes on all your fiat conversion rates, it creates tax revenue for the state.

You could literally hijack a town and use Bitcoin and a good candidate to create economic -- like all the people fleeing California and the taxes going to Miami, all the people trying to figure out…  We could pick a town of 20,000 or 30,000 people, get a few bitcoiners to back and underwrite the bond.  You could do amazing things, and there are people who are talking about some of this stuff.

Peter McCormack: Yeah.  I mean, the economic reality is starting to play out now with Bitcoin.  We've seen it, I say a microscale, but in El Salvador; we're seeing the reality of it playing out there now, the volcano bonds, the airdropping of Bitcoin to the population, using laws to encourage people to adopt Bitcoin technology so people can use it.  We're starting to see some smaller --

Austin Hill: Yeah, sorry, I might have mis-spoke before.  I was talking about Venezuela and El Salvador.  I meant El Salvador.

Peter McCormack: Yeah, so you're talking about the Bitcoin City?

Austin Hill: Yeah.

Peter McCormack: I mean, these things are fascinating.

Austin Hill: Yeah, I mean what Blockstream is doing, and Adam and the group who are underwriting it, it's incredible.  It is going to, I think, shock the world and rock the world.  In a world of negative bonds, I mean last year, the best performing bond product in the world was MicroStrategy's bond, I think.  I have not verified that claim, but I heard it, Michael Saylor claimed, and I have no reason to disbelieve that.  That was a Bitcoin product.  I think the El Salvador volcano bond might be one of the best performing bonds in a world of negative bond interest rates.  Now, people have other opinions on it, I know.

Peter McCormack: Of course.

Austin Hill: They're allowed to.

Peter McCormack: But I think Samson announced he's 30% committed, verbally committed.  If they close that bond, if it's a rapid closing of that bond, that's going to open the eyes to other people in the region who may be fucking pissed off with IMF rules and interfering.

Austin Hill: I heard part of your conversation, I was travelling, with Nic Carter, where he mentioned you could get a similar risk exposure without having to do, and I understand that.  Yes, you can, if you understand financial world markets.  But I think what he missed was the --

Peter McCormack: The opportunity stick your finger up to the IMF and go, "Let's fucking do this!"

Austin Hill: The opportunity to do a Bitcoin powered volcano bond, and the community support, the community wanting to come together and say, "We can finance a central bank.  Let's get out there and let's play it, the level that Bitcoin should be able to play at".  I think the Bitcoin community's going to come together, and I think the thing's going to sell out, and I think it will be one of the best performing bonds in the international bond market.

Peter McCormack: I agree, because they want to show the rest of the world and these large institutions that we can do it without you.

Austin Hill: And what happens when you can bring that now to Costa Rica; what happens when you can bring that now to Nicaragua?  Every other Latin American country has been approached and forced to remake its tax laws according to IMF rules, to take on massive amounts of debt.  And this is Jeff Booth's argument, that this exponential debt curve that we're on, we're approaching levels of exponential debt that people just don't understand.

The US dollar will be the last to fail.  The US dollar is actually probably long-term very good, stable fiat backed, because it is the strongest, it is the world's reserve currency.  But the cost of that is a massive military industrial complex, it's the US Government having to do alliances with US petrodollar-backed, environmentally horrible, destructive energy systems.  Bitcoin does fix this.  Bitcoin literally moves us off the oil, US dollar, petro fiat world standard into a green energy-backed ASIC mining world.

So, even Kevin O'Leary and some of the comments -- did you have…?

Peter McCormack: Yeah, I had Kevin on.

Austin Hill: Yeah, I love Kevin.  And when he was talking about some of the ESG boards and what he needs to do to get products in front of his companies, he doesn't even fully understand what's happening in the Bitcoin world.  There are so many Bitcoin companies that are Bitcoin only, Bitcoin focussed, that haven't had access to the public markets.  Unfortunately, the only public market company that we have in the Bitcoin space, in the crypto space, is Coinbase.  And, argue what you want, but Coinbase at least got out.

Peter McCormack: We've got some miners.

Austin Hill: There are a few miners in the Canadian markets, yeah.  There are people doing Bitcoin mining, yeah.  But there just aren't enough public products.  So, there's trillions of dollars of capital in that sovereign wealth area that Kevin deals with that want access.  He literally said on your show, I think, he has a target of moving from 3% allocation to 7% into crypto; and if we don't get enough Bitcoin companies public, viable, whether it's Blockstream to a direct listing, or other Bitcoin-only companies that deserve to go public, then he doesn't have that product to invest in.

Now, some of them have figured out how to do it, by owning ETFs and hopefully we'll get a vehicle, an ETF vehicle going, but we'll see.

Peter McCormack: This was fascinating.  I've got so much more I want to talk to you about.  Okay, let's close this one here, we'll come back in the morning and we'll continue this and we'll talk about the Vulnerable World Hypothesis.

Austin Hill: Great.

Peter McCormack: This is fascinating, honestly.  It's like Jeremy said, we went to the bathroom, hanging on every word, this is one of the easiest things we've had to do, I've just had to sit and listen.  It's fascinating.  Thank you, Austin.  Do you want to send anyone listening to anywhere?  I usually ask, "Where to follow you?"  Do you want people to follow you?

Austin Hill: No, I'm retired!

Peter McCormack: From the bitcoiners!

Austin Hill: I'm planning a marriage this year, I'm getting married.  I'm halfway focused on living pseudonymously in Latin America.

Peter McCormack: Well, congratulations on that.

Austin Hill: Thank you.

Peter McCormack: Right, tomorrow morning, let's do this again.

Austin Hill: Great.