WBD454 Audio Transcription

The Breakdown of Trust with Balaji Srinivasan & Glenn Greenwald

Interview date: Tuesday 25th January

Note: the following is a transcription of my interview with Balaji Srinivasan & Glenn Greenwald. 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 angel investor Balaji Srinivasan and journalist Glenn Greenwald. We compare American incompetence to Chinese competence, how Bitcoin offers hope, why the US establishment has struggled to assimilate new technology and the damaging conflict between tech and media over the past 20 years.

“What I ultimately want to do with this Bitcoin discourse is try and bring as many people as possible to talk about it in a way that ceases to alienate particular ideological camps who for whatever reason have been trained quite effectively to be hostile to a technology that can actually empower them.”

— Glenn Greenwald

Interview Transcription

Peter McCormack: Balaji, how are you?

Balaji Srinivasan: Good.

Peter McCormack: Good to see you again, man.  And, Glenn, welcome to the show, somebody I've wanted to talk to for quite some time.  It's nice to see you doing a lot of Bitcoin.

Glenn Greenwald: Thank you.  Yeah, I've definitely been diving in a lot lately, so I'm excited to do this, thanks for asking.

Peter McCormack: Well look, this is going to be an interesting conversation, because one of the things I've been struggling, as a podcaster, with is trying to find the truth at the moment.  Can't trust mainstream media, not sure how much factchecking goes on with the independents who've been growing.  There's a handful of people I do trust, Glenn, you're one of them, Matthew Taibbi I trust, and there's a few others.  But I'm really struggling in the whole area of truth-finding.  And I know, as a journalist, Glenn, this is something you've been discussing quite a lot.

But also, it's interesting to bring Balaji in on this, because he's looking at technical solutions to this.  So, I think we're going to get into some interesting topics.  Balaji, I'll go with you first, because you've been really diving into this on the technology front, and you've always been somebody who's been drawn to using technology to solve problems.  How are you going with this?

Balaji Srinivasan: Sure.  So, short version is, is that I think we need to replace the sort of centralised corporate or government truth with decentralised cryptographic truth, and I know that that's a mouthful.  But the very, very brief version, and then let's go through all the problems with the media, which I think Glenn has, is that with Bitcoin, we were able to allow an Israeli and a Palestinian, or a Chinese and a Japanese person, or a Democrat and Republican, to all agree on the state of the Bitcoin blockchain; regardless of your political views or geography, people agree on how much Bitcoin someone has globally.  That's a huge triumph, because $1 million, that's the kind of thing that people will fight over and disagree on, and now there's no dispute on who owns what BTC, and so that's actually this decentralised truth.

Once you develop consensus algorithms that can get people to agree on a number, like how much BTC someone has, you can actually extend them to other kinds of property, and that's a whole Web3 crypto, whatever, space.  Then, the less obvious thing is, you can extend it even further to say, "What device recorded this temperature in Kansas on this date?" or, "What hospital uploaded this medical record at this time?  What was the price of his house?  What crime was reported?"  All these feeds of data, they actually are there right now, they're in these disparate silos, and you can put them together in something I think of as the ledger of records, a global feed of cryptographically timestamped history, undeletable history.

Then, everything becomes commentary on top of that.  That's this feed of all of these crypto oracles, and then all of us are basically advocates on top of that feed.  Now, of course, somebody could put something on chain that's not actually true, but the metadata around it, the timestamp of when it happened and the hash of what was there and the digital signature of who uploaded it, that is something that's very hard to monkey with.  And as you add more proof of those techniques, you can establish more and more. 

So, I know I just dived into the deep end, but that's where we ultimately want to go, which is basically a more robust feed of truth, rather than the assertions of some corporation or government, something where anybody can dig in and diligence the raw data as low as they want to go.  We're already moving towards this.  A lot of media is effectively just commentary on Twitter.  It's amazing how many articles are all the tweets that are fit to reprint.  That's a feed of data, and I think you can go much further with that, into a feed of effectively on-chain assertions.  And then, everybody becomes a reporter, everybody becomes a journalist, every device becomes a reporter.

So, that's where I think we want to go, and I know that's a technical solution, but there's tons of problems, so why don't we talk about the problems.  Glenn, I'm sure you have a take on that.

Glenn Greenwald: I think the trajectory of Bitcoin, in terms of how it emerged in, not just the discourse, but in the world and the perception it created, has been somewhat of a problem for drawing more people into the discussion.  For a long time, the perception, if not the reality, was that it was basically a libertarian currency, and that the interest in it would be due to either a desire to invest in some new investment interest, or just as a different way of organising the world economy and currency, and that excluded a lot of people for a lot of reasons, in part because it was attached to this libertarian ideology, which people on both the left and the right are sometimes alienated by.

It also seemed kind of elusive, in terms of grasping the macroeconomic implications.  Not very many people, I think, are well steeped in even the political implications, let alone the economic ones, of how currency is organised.  And I think that more cultural and political potential of Bitcoin as a technology, the kind of thing that Balaji just highlighted, is something people are only recently thinking about.  And I know, for me, if it were just an investment vehicle, or some macroeconomic instrument, I probably wouldn't be interested in it.  What has interested me, and is interesting me more and more, is the potential to decentralise everything.

Even going back to the work I did with Edward Snowdon, the ultimate mission of that cause was a free internet.  It wasn't so much preservation of the right to privacy; that was obviously a subsidiary aim.  But it was really an attempt to restore the idea that the internet is supposed to be this free, emancipatory technology, which by necessity means it's not subject to centralised corporate and state control.  Then obviously, the last two or three years has elevated a certain cause even further, which is the extreme, and escalating, always escalating, censorship by Big Tech of political discourse over the internet, which is also a threat to that same cause.

So, to the extent that Bitcoin can be a kind of bulwark against that, it becomes very interesting, not just to me but to a lot of people who previously weren't interested in it, precisely because the problems with corporate journalism, we could obviously spend a lot of time talking about those, they're endless; I think a solution that has emerged that is exciting is the emergence of this new independent media ecosystem.  The problem is it is dependent upon the same centralised structure and power dynamic and technology.

You look at Joe Rogan, for example, there is a vulnerability he has that he depends upon Spotify, which can zap him off the platform at any moment.  Even these alternative platforms designed to be a check against those pressures, like Rumble or Substack, call in some of these other platforms that are waving this banner of free speech in a way that I find persuasive, also at the end of the day are vulnerable to Amazon, Google, Apple capitulating to the kind of pressure that was placed on them when they destroyed Parler at the moment that Parler was the single most downloaded app in the United States, more than Instagram, TikTok, Facebook, every other app.

So, I view this growing threat to a free discourse, a free internet, as the most serious threat we face.  And to the extent Bitcoin is a technological solution, which I'm not completely convinced of, but I'm very interested in, that's why I've devoted a lot more attention to it, and why I think a lot more people are being drawn in.

Peter McCormack: Okay, so just to try and summarise what I think you're saying, is that you're interested in the idea that something like Bitcoin as a flag that decentralisation is possible, it is possible to create something that is unstoppable.  That's what's interested you, less so than the economic side of Bitcoin?

Glenn Greenwald: I mean, I have become more well-versed in the potential to liberate the world from the dollar, as this hegemonic currency, and the impact that can have on things that I have spent a lot of time working on, like imperialism and militarism and the like; and the connection between those two are things that are becoming more visible to me.  So, I don't want to say that I'm uninterested in that side of it either; that part is interesting to me.

But I kind of see it as what I used to look at as the emergence of encryption a decade ago, during the Snowden era, that the big promise was, "Encryption will solve these problems.  The hacker community is going to develop code and tools to build a wall between the state or non-state actors and the individual to prevent surveillance and monitoring".  And one of the things we reported with the Snowden technology was a lot of that had huge holes in it and a lot of that had been breached in ways people never knew, and there's a lot of reporting since.

So, that's the question I still have about Bitcoin, is whether that will happen here as well.  But yeah, that's definitely my interest level.  It's kind of multi-pronged though.

Peter McCormack: Okay, so just for context for you and any of the listeners and myself as a bitcoiner, I'm mainly interested in Bitcoin as a check and balance against the state, rather than as something that leads to the destruction of the state.  And I know a number of listeners sometimes get upset with that, because they believe that the state is ultimately evil, and that we need to move beyond democracy; democracy has failed.  But I'm not one of those people.  I'm one of those people who wants to strengthen democracy, and I believe that Bitcoin is one of the tools that can do that.

Balaji, how are you doing man?

Balaji Srinivasan: Sure, maybe I can give some reaction to that.  So, one thing I think, Glenn, I think the ideals support the economics and the economics support the ideals, in the sense that there's a lot of things where one is -- something that's morally strong but without a business model, or a business model but it doesn't have moral strength, both of those are failed in different ways, but this I think has both and even more importantly, it has absolute truth on its side.

One thing I would differ probably from Peter and some of his audience on, but not all, is I think Bitcoin is a critical component of this and a critical technological enabler; but on the implementation, I don't think everything is going to run on Bitcoin itself, I think there's going to be other decentralised technologies, the whole Web3 thing, etc.  That's really an implementation detail which we can get into, but I think the philosophy upstream is important, and I think maybe we can concentrate on that.

One thing that I think would be helpful, Glenn, you tell me if you like this idea, you and I have in some ways converged onto a similar set of premises from different starting places where, for example, on the order of ten years ago probably, and you correct me if I'm wrong, I would have thought that Google and Facebook would have maintained a degree of neutrality that they had prior to 2013. 

There was a time, if you remember, that it was considered unthinkable for them to censor someone on the basis of speech.  Twitter called itself the Free Speech Wing, or the Free Speech Party.  There was a time when it really was kind of a censorship-free internet.  So at that time, I was like, "The tech companies are relatively well intentioned and they're more on the side of freedom than the establishment".  And probably you at that time looked at media companies as actually being relatively, maybe some were biased, but not totally in the tank for the regime.

I think for the last ten years, you've realised that media has kind of failed, and I've realised that the centralised tech companies have failed, and we've come to the same place.  Shoot at that and tell me if I'm wrong or right on that!

Glenn Greenwald: Certainly one of my long-standing critiques of the corporate press in the United States is going back to the Cold War, it's not anything new, is this extreme deference to the US security state, Time Magazine under Henry Luce, The New York Times under the Sulzberger family, one of their main functions was doing propaganda for the CIA.

Balaji Srinivasan: Yeah, I heard Sulzberger was an asset, or something like that.

Glenn Greenwald: For sure, I mean he was.  Whether you say he's an asset in a tactical sense or not, that was functionally what they did, which is why they became part of the establishment.  So, the CIA would engineer a coup in some previously left-wing country and install a right-wing dictator and The New York Times or Time Magazine would describe it as, "A revolution against a corrupt communist regime and the emergency of democracy", or they would always be the reverse of whatever the reality was that the CIA needed support for.  Then, I think you would go to the war on terror, and that became even more extreme, where this patriotic ethos emerged even more strongly in the media. 

So, this has been a long-standing critique of mine.  In part, it's the reason I entered journalism when I was practising law in 2005, was because of this perception of this extreme subservience from the media to the government, or really kind of a merger.  But I think it just worsened exponentially in the last five years with the arrival of Donald Trump, and the perception that I think most of them genuinely have that Trump is this unprecedented threat to all things decent, and that their primary function is no longer to be objective or truth-telling, but to use journalism as a weapon to undermine this political movement, that obviously has radically transformed and I think exacerbated all of the pre-existing problems in media.

Balaji Srinivasan: Yeah, and what's interesting is, if you pull the camera back further, and you may agree with this, you may not, but I do think of social media as being like American Glasnost, and cryptocurrency as American Perestroika, in the sense that in the 1980s, when Gorbachev opened up the Soviet Union Glasnost, people could speak more freely; and Perestroika, they could have more free markets.  And social media and cryptocurrency are for your speech and for your markets, to an extent that just like in the USSR, the USA and the West cannot handle that degree of freedom.

That level of freedom in the Soviet Union rattled the cage a little too much, and a society that had gone from having padlocks on the photocopiers just got broken apart in basically less than a decade or so.  And I think that the US was able to tolerate a higher degree of free speech and free markets.  It had different cable news shows, and obviously it had capitalism and different people trading; it had less control over speech and markets in the USSR.  But it can't handle the degree to which social media and cryptocurrency have expanded things, and the cryptocurrency story's only really just beginning.  I think we have another ten years of massive disruption with that, just like with social media.

If you think about it, when the Social Network movie came out, it was in 2010 and at that time, yes, the Arab Spring happened, and so on, but that wasn't even mentioned in the movie, in the 2010 move, The Social Network.  And politics was completely absent from that movie, which is absolutely insane from today's vantage point, going back in time and rewatching it.  It's essentially the story of a college social network where people are poking each other and so on.  Nothing of the present day is foreshadowed there, even the Arab Springs stuff; because that had happened overseas and Facebook and Twitter weren't part of it, it hadn't happened at home, the filmmakers didn't think of that as material, which is amazing from today's vantage point.

I think in the same way, cryptocurrency in the first ten years has been dismissed as a fad or a bubble or this or that, a lot of the same words that were used on social media.

Glenn Greenwald: Or the internet generally.  Remember Paul Krugman famously said, "The internet's going to be like the fax machine"?

Peter McCormack: He said the same about Bitcoin.

Balaji Srinivasan: He said the same about Bitcoin.  This is because the modern US establishment can only react in one of two ways: either (a) apathy, or (b) panic.  Either they're dismissive because it's unimportant and it's never going to get anywhere, LOL, Tech Bro, whatever.  Or, "Oh my God, it's the end of democracy, we're all going to die!"  So, the negativity is constant, but at first they're negative because it can never be important; and then, they're negative because it is too important.  And that just flips like that. 

Now, what is absent from that of course is the judiciousness about riding the lightning and aligning yourself with these waves.  And the way I think about it is, certainly social media and crypto are the nth power of this, but if you go back further in time, there was the Repeal of the Fairness Doctrine, and there were cable news shows, etc.  So, you can trace it further back, deregulation, etc; various forces on both right and left essentially led to a more, in a small sense, liberal speech and market environment.

I actually think that the current crackdown is sort of a Battle of the Bulge; it's kind of too little and too late.  They only really started it after 3 billion people got social media, and there's all these smartphones out there and encryption is out there, etc.  And one of the most important things in my view is, after January 2021, I was holding my breath to see what was going to happen, because you had unified control of government, and the Parler thing had just happened, and so on, and I kind of thought we might be in for a wave of mass censorship and disappearing of all kinds of accounts, all kinds of apps.  And then, once you'd chewed through one group of people, the moderate conservatives, and then the dissident liberals, everybody just gets disappeared; I kind of thought that might happen as a possibility, given the energy last January.

That didn't happen, and I think it's a really interesting thing that it didn't, because this government, just like the previous government, is like an ADD, Starbuck's caffeinated, sugar-rush government, where they have no attention span beyond what's on Twitter that day.  Everything is like that now, including the state itself.  So, because of that, they don't actually even have the attention span to prosecute a determined campaign of censorship of regime enemies, just like Trump didn't have the attention span to actually be the fascist that everybody said he was going to be.

Everybody, the entire US Government's all ADD, it's all actors.  It doesn't mean that the threat of censorship isn't important, I think it is; but we're fortunate that these guys are, for the most part, chaotic evil rather than lawful evil.  They're not organised enough to go and blot folks out.  Now, who is organised enough?  The Chinese Communist Party.  They actually went and set up the great firewall.  They blocked social media, they've now banned cryptocurrency, forced the Bitcoin miners out.  They actually go and react to threats to their power very early on, from many different points on the ideological spectrum, whether it's the Strike Hard Campaign, or versus Falun Gong or versus Xinjiang or versus the Tech Guys or versus Hong Kong or versus Taiwan or versus the US Military, basically 360 degrees, whether those threats are left, right or unclassifiable from a western context, the Chinese Communist Party is monitoring it, and they're just on it and they just send their RoboCops out there, censor it, snuff it out.

The US fortunately is not organised like that, so I think we have a good shot at freedom.  I think we might actually overcorrect into anarchy, and we can talk about that.  I'm not saying we're there yet into anarchy.  I think we have to move in the direction of freedom, but I do think we might overcorrect; we can talk about that.

Peter McCormack: Just, while we have you here -- well, no, you reply to Balaji.

Glenn Greenwald: Well, I was actually going to address the point you raised at the beginning, in connection with what Balaji said, which is this idea that a lot of your listeners, or some of your listeners, have different end goals than you have, that maybe they have a more radical vision of what Bitcoin is intended to accomplish.  And one of the things that has interested me about Bitcoin and that began to concern me, is how it has been confined to this narrow ideological camp in a way that doesn't make rational sense.

People on the left should be, if you follow the premises of their stated political and ideological beliefs, favourable towards and indeed highly supportive of Bitcoin technology, because they certainly want to liberalise themselves from centralised corporate control; and maybe in the utopian vision they have, not necessarily from centralised state control, but certainly from centralised state control as the state is current constituted.

I would say the same is true of people on the right.  So, if you use the analogy of encryption, a tool to prohibit centralised state authorities, or non-state actors from monitoring and subjecting us to surveillance and what we do on the internet, lots of different ideological camps across the world, lots of different social and political movements, have a strong interest in ensuring that that can be done.  That's why the Pentagon, on the one hand obsessed with spying on its adversaries, including the domestic population; but also eager to vest into itself the ability to immunise itself from spying, invested in things like the Tor Project.

Oftentimes, these technologies are of benefit.  They can be a really powerful weapon, regardless of what your ultimate ideological vision is.  It doesn't really matter if you only wanted to strengthen democracy or strengthen the individual, or if you have a more radical vision of abolishing the state, or ushering in anarchy, or some other more extreme political ideology, anyone who's dissatisfied with the status quo and eager to free ourselves of centralised authority should be supportive of any technology that can do that, regardless of how it can then be used.

I think the other point I would make, the one that Balaji said, I do agree that there's no systemic discipline in the United States, or the West more broadly, to impose the kinds of censorship and control they wish they could.  I saw this interview, there was this really interesting part of Candace Owen's recent interview with Trump, where she was, I forget exactly the context, but disparaging the Chinese, I think the way the Chinese are treating their students or schools.  Trump essentially said, "What do you mean, China?  They do everything better than we do".  It was the authoritarian's admiration for how efficient they are, and his frustration that the United States is incapable of that level of harsh efficacy in doing what they want to do.

Sometimes though, this flailing, arbitrary censorship, or other forms of repression, can be quite dangerous as well.  I know, Balaji, you were intending to downplay it.  So, I agree with you it's not systemic, it does create an opening; but I also do think that the kind of flailing attempt to be repressive can be quite menacing.  And what I ultimately want to do with this Bitcoin discourse is try and bring as many people in as possible to talk about it in a way that ceases to alienate particular ideological camps who, for whatever reason, have been trained quite effectively to be hostile to a technology that could actually empower them.

Peter McCormack: Yeah, that's a really great point.  One of the things I've tried to do is speak to as many people as possible.  But what you were saying originally made me think of something one of my friends, Parker Lewis, he's been on the show a bunch of times, but he has this thing he says.  He said, "Liberals are going to love Bitcoin when they figure out what it can do for lower-income families, but Democrats will hate it.  Conservatives will love Bitcoin when they figure out what it can do for the budget deficit, but Republicans will hate it".

I think the point he's trying to make is that Bitcoin is a tool that can serve anyone.  The people it's really a threat to is the political elite, whether it's left or right, and therefore it really shouldn't become an issue that divides us; everyone can benefit.

Balaji Srinivasan: That's why I think the most interesting thing is, Hillary Clinton has gone on a rampage against Bitcoin over the last nine months, because whatever you want to say about her, she's not dumb, she's quite educated, informed and smart, and she sees the threat Bitcoin poses to the prevailing global order that she loves.  And then Trump himself, actually, also recently said, very similar -- he was invoking very similar reasoning that Bitcoin was dangerous, because it can subvert the hegemony of the American dollar.  So, I think you've seen the actual guardians of status quo power recognising before its opponents the threat that Bitcoin poses.

Peter McCormack: Elizabeth Warren's the same, she's been attacking on Bitcoin as well.  But there are some kinds of movements of certain politicians that support it.  Ted Cruz has recently come out in support of it.  Actually, most of Texas supports Bitcoin, but that kind of makes sense really.  I was with Governor Abbott a couple of months ago, and he was seeing the job creation with Bitcoin mining in Texas.  So, it's not a universal hate across the political spectrum, but it definitely has more support within the Republican Party than it does within the Democrat Party.

Balaji Srinivasan: One thing that I want to say, by the way, on this, actually three or four comments.  I just pasted a link there.  So, Glenn, to your point, it isn't just Trump who was -- Goldsmith a couple of years ago had this article in The Atlantic, "Internet Speech will Never go back to Normal: in the debate over freedom versus control of the global network, China was largely correct and the US was wrong".  And The New York Times also had this article, "Free Speech is Killing Us: Noxious language online is causing real-world violence.  What can we do about it?"

Now of course, my one-liner on that is, it is true when the New York Times writes, "Free speech is killing us"; it is true because it is killing them.  When they say "our democracy", they mean "our" in the possessive sense, like The New York Times' democracy, right.  So the thing is, they were pro-free speech when it was controlled.  They equated, "Free speech with freedom of the press, meaning freedom of media corporations to do whatever they wanted, and you could go and yell on your street corner, but you lack the distribution".

One thing I think about actually, 30 years ago, the Unabomber, that was happening in the early 1990s, late 1980s, like 1990, 1991.  If we think about what he did, people know his assay, and so on, but people forget one other aspect which is, his big thing was to try and get an op-ed into the Washington Post.  That was why he killed all those people.  Do you remember that, right, Glenn?

Glenn Greenwald: Yeah.

Balaji Srinivasan: So actually, on your point, it's not just Trump on that particular thing, or wishing for the Chinese state's powers.  There's this article in The Atlantic a couple of years ago, "Internet Speech will Never go back to Normal: in the debate over freedom versus control of the global network, China was largely correct and the US was wrong", by Jack Goldsmith and Andrew Keane Woods.  There's another one in The Times similar, "Free speech is killing us.  Noxious language online is causing real-world violence.  What can we do about it?" in The New York Times.

So, first observation of course is, when they say, "Free speech is killing us", they're right, it's killing "them", The New York Times.  It's like when they say "our democracy", they're meaning "our" in the sense of a possessive, like the thing that the Sulzberger family holds tight to their vests.  It's just like they run these billboards declaring, "The truth is The New York Times", that the truth is like one man's private property, this guy, Arthur Sulzberger, that owns The New York Times, inherited from his father.

So, these guys, they also, on the left, pine for the ability to impose speech controls.  And, Glenn, I completely agree with you, that I'm seeing it as a mercy that they're so incompetent.  But nevertheless, their censorship, even if it's random and disorganised and a function of what they see on Twitter that day is, I totally agree, still dangerous.  So, I think we're on the same page there.  We're very fortunate it's just not as systematic as the Chinese variety, which means that we can potentially build a freer society, despite this attempt to kind of squash things out.

The other thing, on the politics of Bitcoin, Bitcoin is so huge right now, there's only in the order of a few hundred million holders, that it's like a state, like a large state.  It's like the US roughly, comparably, depending on how you estimate it.  Last year, meaning 2020, there's a Cambridge study that estimated about 100 million hodlers, and that was before the whole Europe 2021, so there's hundreds of millions of people.  So of course, there's going to be differences.

One thing I would just say, by the way, is that I think about it as 100% democracy, as opposed to the current state of 51% democracy.  In 51% democracy, you have this vote, the barest clearing of this 51% bar, and that 51% can chorus that other 49% and they think they've got unlimited power to do that.  But actually, the more narrow the victory, the less you should coerce the other side, the more consensus, in theory, you should operate, because you don't have a mandate, you don't have everybody on your side.  And if you try to coerce them, what happens is 2% flip the other way and then you repeat it again every four years, and that's basically what's been happening with the US over the last several decades.

Whereas, 100% democracy, the concept is you have a jurisdiction where everybody's basically opted in, and they might start digitally, and then eventually come physically, but everybody's chosen to be there, they've signed the social smart contract.  Now, that's a whole separate kind of topic, but just on your point about destroyed democracy, I actually believe in 100% democracy, meaning vote with your ballet, yes, but also your wallet and your feet towards your jurisdictions.  And a V1 of that is people moving to Miami, people moving to El Salvador, people moving to Austin, people moving to jurisdictions, so they're not simply voting in place, where they can get aggregated and diluted out, they're also moving and expressing choice, not just voice.  Okay, that's one.

Then the second is, in terms of the political orientation, one way I think about it is, you guys know the Political Compass with the four boxes? 

Peter McCormack: Yeah.

Balaji Srinivasan: Yes, Glenn, you've seen it?

Glenn Greenwald: I'm not sure.  Go ahead and describe it.

Balaji Srinivasan: It's basically got these four boxes, and it's authoritarian left --

Glenn Greenwald: Yeah, like the quadrants.

Balaji Srinivasan: The quadrants, right.  It's a thing for memes and so on, right, okay.  So, the way I think about that is, the top left quadrant is authoritarian left, to right is authoritarian right, bottom left is libertarian left, bottom right is libertarian right.  And you could think of them as respectively socialist, nationalist, internationalist and capitalist.

Now, the way that I think we're seeing a realignment now is that Hillary Clinton would be top left and Trump would be top right, and you and I, I think, are heterodox, but maybe caricatured or pigeonholed as lower left and lower right, libertarian left and libertarian right respectively; I think our views are all over the map, but let's just say if caricatured.

What I think is happening is there is a different coalition than in the 20th century.  That is to say, in the 20th century, we sort of assumed that nationalists and capitalists were together on the right.  And actually, now I think it is socialists and nationalists, the authoritarians, versus the libertarians; socialists and nationalists versus internationalists and capitalists, because that's what crypto is, that's what Bitcoin is, it's internationalists and capitalists, whereas the state is now socialist and nationalist.

So, you could think of it as authoritarian, libertarian; you could think of it as centralised versus decentralised, very related framing.  I think another couple of angles that are interesting are federal versus state and local.  That is to say, I think you're going to see way more state and local Democrats that are into cryptocurrency and Bitcoin, and fewer federal Republicans that are into it.  Like the guy who voted for the bill last year against this amendment, this guy Shelby, is like a militarist Republican.  So, those are the folks who are going to be against Bitcoin, because they like empire, they like the big guns and so on.

Glenn Greenwald: Right, that's where Trump was coming from?

Balaji Srinivasan: Exactly.

Glenn Greenwald: It should be the strongest country in the world and Bitcoin is a threat to that.

Balaji Srinivasan: Exactly.  So I think really federal versus state local is another important axis.  Then also, the US and PRC versus the rest of the world.  So, as you group, and you can do different cuts, so let's say (a) one axis is authoritarians versus libertarians, or centralised versus decentralised; (b) another axis is federal versus state and local within the US; and (c) on a global stage, the US and PRC are against this, but I think the rest of the world is going to be for it, because it's a counterbalance against either US empire, or the new Chinese empire. 

People don't want the new boss to be even worse than the old boss in some ways, but they also don't like what the old boss is doing, so this gives them genuine independence.  So, those are at least three ways I think about this thing moving politically.

Glenn Greenwald: Yeah, I think the authoritarian libertarian dichotomy is stronger than ever.  I think the left versus right is probably more confused and jumbled and weaker than ever, which I think is a good thing.  I think the defining division politically, certainly in the West, maybe even the world more broadly, is between people who continue to believe not just in the current order of institutional authority, but institutional authority in general versus people who believe in the primacy of the individual, either as a theory or an ideology, or because they just believe that global institutions of authority are so corrupted and so menacing that subverting them is the primary goal.  To me, that defines where you fall on the political spectrum much more compellingly than these old left/right categories, which are still relevant, but not nearly as much; in part, because they're pretty ill-defined at this point.

I'm always interested whenever I'm talking to people who are enthusiasts of Bitcoin to hear the responses to what to me are not just the most common, but compelling critiques, and I just want to ask about two in particular.  One that I would say comes from the part of the left-wing resistance to it, which is that in reality, it's really just a replica of a new form of oligarchy.  There are these small numbers of early investors. 

Now there's, as you were saying, hundreds of millions, but I don't know what the percentages are, if like there's 90% of Bitcoin wealth in the hands of a tiny number of people, and therefore driving up the price of Bitcoin by talking it up has at least one primary effect, is to create an entire new oligarchy of people who are these early investors who have invested in it very early, have large quantities, where it's a small number of people, and that Bitcoin will just reinforce the inequality it claims it's tempting to combat.

Then, I think on the other side, a more pragmatic concern, one I share which is, what is the reason that centres of power, which excel in nothing more than preserving their own power, will be incapable of dismantling this technology as a threat, either because it's becoming more and more centralised, people use things like Coinbase, which doesn't really provide a lot of anonymity, which gives the government a clean target to go after; or, breaking it down technologically, the way that was done with encryption, or at the end of the day, if none of that works, just brute force outlawing it, making it a crime to use Bitcoin?  What gives you the comfort or the confidence that it won't be destroyed using some combination of those tactics?

Balaji Srinivasan: So, on the new boss same as the old boss aspect of oligarchy, first is the US dollar and Bitcoin holdings, those people, those are almost, I shouldn't say disjointed sets, but they're very different groups.  The kind of person who's an early investor in Bitcoin is typically not somebody who is very powerful in the existing US establishment.  They are people who are alienated from the system in some way, they believe that the Fed has been bailing things out, etc.  So at a minimum, just from a maths standpoint, when you actually have two hierarchies, you've actually reduced inequality, because you've made a bunch of new people rich, and you've actually made a bunch of the existing people less rich. 

I can show that mathematically, or whatever, but essentially Bitcoin is a gigantic redistribution of wealth; yes, to a new group of people, but because it's a new group of people, you've actually globally reduced inequality.

Glenn Greenwald: But not necessarily more equitably.  It's a redistribution -- it can be like, you take away the billions of dollars that billionaires have and instead of distributing it to everyone, you just give it to a new group of a thousand people and now you've created a new group of a thousand billionaires.  And, I understand your point, it's better to have a few thousand millionaires than just one, but still, that's the critique.

Balaji Srinivasan: I understand.  So, the V1 is basically just that even today, it actually has reduced inequality in that there is a whole new class of people who are millionaires, or thousandaires, or whatever; that's the first point.  The second point is, the longer-term effect of it actually helps everybody, including the poor, because it checks inflation; and inflation is a much worse thing. 

For moderately wealthy people and above, they can keep the vast majority of their assets in equities, which can keep up with the pace of inflation.  But for the poor, their savings are destroyed, what meagre savings they have, are destroyed by inflation.  They won't always get wage increases that keep up with their cost increases.  So essentially, Bitcoin moving us into a system where there is just significantly less systematic inflation allows even poor people to build up.  And so that, I think, is a fundamental difference versus the old system.  Those are at least two points I'd make.

The third I'm make, which Peter won't agree with, but I'm in agreement with, is that if you expand it from BTC to Web3, now you actually have an enormous number of new mechanisms for wealth creation that I do think are going to break the piñata of Facebook and so on.  And rather than it being $2 trillion dollars that's just held by the shareholders of FB, it will be like $10 trillion held by all of these decentralised Facebooks all around the world, and I think we're already seeing that. 

So, those are three arguments, but to just recap: (a) it actually has reduced inequality so far, because these holders are different than the old ones; (b) it cuts inflation dramatically, which allows people to save; and (c) it allows folks in India or Brazil or Eastern Europe or Japan or something to build protocols that compete with American tech companies, American entities, American media companies and thereby, decentralise wealth that way.  So, that's my answer on that.

On the second one, on the centres of power, this is a good question.  The short answer is, in my view, that the Chinese state is dangerously competent and the American state is dangerously incompetent.  What I mean by that is, I do think the Chinese -- I think the future is Chinese control, American anarchy and an international intermediate.  That is to say, today in the US, we're in this weird era of anarchic tyranny where, in San Francisco, a working-class guy will get a $200 ticket for having his car parked on the wrong side of the road, or for a minute over, but the guy who smashes his window or poops in the street, nothing happens to him.

So, the working-class guy, the blue-collar guy is basically terrorised, and the super-rich person can insulate themselves from all of this.  So, you have this anarchy combined with tyranny, where the working-class person is tyrannous, the middle-class person is tyrannous, but there's anarchy on the streets. 

I think though that is a transitional phase and it's just going to melt down, because there's so many different things where the US Government is taking huge Ls, both domestically and around the world.  It's not just the loss in Afghanistan, it's not just China telling the US, point blank, that it doesn't have power anymore, this recent Alaska Conference with Blinken and the Chinese, it's not just Russia trying stuff in Crimea, it's not just El Salvador flipping off the IMF, it's not just 17 states domestically suing over education, it's not just Texas doing this abortion bill and then California responding with its own thing, it's not just cities going Bitcoin, it's not just Wyoming doing its DAO law; it is basically massive resistance, both inside and outside the United States, where on the order of 50% of the population just doesn't listen to the federal government anymore, and that's with left and right deviation.

Then abroad, lots of states just don't listen either.  During the Obama Administration, they controlled the state enough that they could go and get Switzerland to open up all their bank accounts and so on.  More recently, under this administration, they tried to sanction Germany over Nord Stream 2, they tried to sanction India, both Germany and India were trading with Russia, and they weren't able to make it stick.  Germany's basically stuck firm and said, "F-you, the US, we really need this energy pipeline", so the US vacillated and then eventually let the pipeline happen, and then did these petulant sanctions on Germany anyway that didn't matter, but let the pipeline go through, and the same thing with India.

So, the federal government of the US is weak and getting weaker, and it's taking all kinds of Ls because, the way I think about it is, it's founding versus inheriting.  All these folks who are rising to power now, they're just actors, they don't actually have the skills.  Like, Pete Buttigieg, this Transportation Secretary, he's taking a four-month vacation in the middle of this gigantic supply chain crisis.  That's because he's an actor.  The actual logistics CEO, somebody like Ryan Peterson, CEO of Flexport, actually gets in, debugs, figures out what's going on in the ports.  So, we have this whole thing where people are literally selected for being actors on social media, and then we wonder why they aren't amazing generals, or really great at construction, etc; they're literally actors. 

Reagan and Trump and so on, Al Franklin, we see that but we don't fully see how systemic that is.  It's all a façade, it's all a Potemkin village, the American Government is a Potemkin village.  We also saw that with the US Military during COVID where, for decades, they had had all of this bioterrorism budget allocated, billions and billions of dollars, they said they had fast vaccines also; they were completely MIA, so this entire part of the government that had been funded to the tune of billions, had justified itself in terms of defending the homeland versus WMDs, of which bioterrorism was one of them, was completely MIA, totally missing in action.

Once you realise this, you realise huge parts of the US Government are now just Potemkin villages, which is different than what we grew up with, because you see movies that say, "The US Military can protect us from aliens and so on", or even movies like Contagion, you know that movie, from 2010?

Glenn Greenwald: Yeah, we've talked about it before, yeah.

Balaji Srinivasan: Yeah.  So, it portrays the CDC as these competent, smart bureaucrats fighting this power.  It essentially, you don't realise it, it is Santa Claus for adults.  That doesn't exist, there is no competent US Government, they're all idiots.  The federal government, they're really stupid.  The people that you see on Twitter are the actual people; I mean, they're the actor versions, but that's the level of cognition. 

So, they've just basically been put into a tank where they don't even understand how to push the buttons, and that's why you see navy ships colliding, that's why you see overruns on the F-35 and the Zumwalt and all of these military installations, just like in the civilian things, where the subways cost hundreds of millions of dollars, the bus lanes cost hundreds of millions of dollars.

So, it's basically like the third- or fifth-generation kid who inherits a factory that he could never build.  He can push a button and the widgets come out, but one day when he needs to switch it from widgets to masks or to guns, he's completely in over his skis, because he can't make a change.  And that's the fundamental thing.  This establishment cannot handle the change of the internet, so what they're trying to do is jam it back into the box, push it back into the garage, use what powers they have. 

But even there, they're too ADD to truly do that and they kind of lost a lot of energy after 2021 and they didn't push it all the way.  Now the backlash is coming off and BTC and Web3 and so on have grown enough, they don't think they're going to be able to do it.  That's my model for your second question, which is why they can't do it.  They want to, but they lack the competency to do it.  All the builders are out.

Glenn Greenwald: Which is encouraging, right?  Going back to that Pete Buttigieg example, I found that also a big window into a lot of what's going on; because in general, the idea that the person who's nominally in charge of the supply chain would take four months off to go take care of a baby to which he didn't give birth, in the middle of a supply chain crisis, would be just inherently objectionable given the hundreds of millions of people adversely affected by that crisis.  He's decided to take a vacation --

Balaji Srinivasan: Including their babies.  Medications, all kinds of things were delayed there.

Glenn Greenwald: No, I mean every conceivable part of life is adversely affected by that.  And yet, the one ideology to which American elites do maintain allegiance is woke ideology, which holds that, for example, questioning whether Pete Buttigieg, someone who's not a woman who gave birth to an infant, who needs to therefore care for the infant physiologically; but as an adopted father, should be treated on equal terms and given four months of paternity leave, to go take care of an infant that doesn't actually rely upon him physically, when he has this incredibly important position he's assumed because of his social media stardom, is something that can't even be questioned.  Because, the fulfilment of the only actual ideology that remains vibrant among these elites, which is this diversity, inclusion, equity, woke ideology, which is in obvious conflict with a lot of the core competence that they use to display in maintaining this iron grip on the imperialist and corporatist order.

On some level, it's part of why I'm glad that they decided to pursue those ends, as opposed to the ones they used to pursue.  They believe there's still adherence to each, but because there's such an internal conflict between the two, because the woke ideology weakens and erodes the ability to maintain the previous prevailing order, on some level it's to be applauded, as nauseating as it is in many of its expressions.  But I also think that that's really the goal.  I don't think their goal, as western elites, is to impose a Chinese style system of repression that can't be resisted.

Balaji Srinivasan: I daydream about it sometimes!

Glenn Greenwald: Yeah, but I think it's propaganda as opposed to brute force that is their instrument of choice, and that can be -- Chomksy has talked about this using Orwell, Orwell wrote about this a lot as well, that co-opting minds is a more powerful way of control and censorship and repression, than using iron bars and cages, because it doesn't provoke as much resistance, because people aren't aware they're being controlled.

It's like what Rosa Luxemburg said that, "He who does move does not notice his chain".  So, if you convince people that their captivity is freedom, they'll fight back against it a lot less than if they know they're being brute repressed; and that propaganda is still very strong.  And I think, what we're really seeing, and this is part of that centralised control, and this is what worries more, I don't think they're going to stomp out every attempt to create a Rumble or a Parler, have a Joe Rogan here or some dissident there; I think the idea more is to create as closed of a system as possible, where propaganda persuades people that they're free, as opposed to obedient, by redefining all of these words like "disinformation" and "hate speech" and "misinformation" to mean anything that deviates from neoliberal hegemony or woke ideology, and therefore people believe it's necessary, not just justified, but necessary to censor it, to repress it, to put people in prison who are adherent to it, because it's not just a different way of looking at the world, but something criminalised.

I agree with you, there was less formal legalistic repression after 6 January than there could have been, but the mindset of watching all of the people who participated in that 6 January protest, that turned into a riot, being sent to prison for three and four and five years after being held in solitary confinement for over a year, even ones who didn't use any violence at all, and watching pretty much the entire establishment applaud it, is the kind of chilling effect that propaganda can have, by just constantly calling it an insurrection, that implies that there's this criminal movement amongst us that needs these more extreme and radical memes in order to control and repress it.  That, I think, is the bigger threat than thinking that American elites are finally going to stumble into the ability to impose a Chinese style efficiency.

Peter McCormack: Yeah, I was just going to say, there's similar propaganda that's being used against Bitcoin itself, specifically on the energy side of things, whereby if you actually measure the energy usage by Bitcoin and how much is from renewables, it actually is negligible compared to other parts of the economy, but it's used to demonise Bitcoin, and more so on the left.

Glenn Greenwald: Can you talk about that a little bit?  Because, I think now it's negligible.  I think the argument is, if your vision is fulfilled, Peter and Balaji's vision of Bitcoin is fulfilled, it's going to be a lot less negligible, that there will be enormous amounts of mining necessary to sustain this currency, grounded in some actual thing in the world.

Balaji Srinivasan: So, let me speak to this, because I think actually sometimes, there's situations where you have to put the ball on the 100-yard line, rather than the 0-yard line, and just start from a different set of premises.  So, the short version is, what Bitcoin does is it's a global system of property rights.  It protects now more than $1 trillion, it may eventually be $10 trillion.  It's the thing that every government will probably eventually want to have in its coffers, just like gold was the constraint, the ungovernable governor of governments; actually, I was talking to Breedlove about this the other day, Robert Breedlove, he's another podcaster.

So, if gold is this thing that's standing above states, if digital gold is this thing that's standing above states and it's guarding the property rights of literally billions of people, that is something you're going to want an energy budget for that's a legitimate thing, and it's cheaper than tanks and planes and missiles and police and so on.  So, number one, it's a security budget where we're securing things in a different way.

Peter McCormack: And Balaji, it's actually more energy efficient than a military industrial complex.

Balaji Srinivasan: Right, okay, so that gets us to the second thing.  The other thing is also that I'm certainly in favour of energy efficiency, but there's a curve you should look at called the Henry Adams Curve.  It shows that basically, if you change -- there's this great book called Where is my Flying Car?  It just got reissued by Stripe Press, really worth reading, ten out of ten.  It's extremely well written, I found it great and it has lots of citations and stuff.

So, one of the things about it, it's got this great curve, called the Henry Adams Curve, and it essentially shows that energy production was rising continuously up until about 1970, when it kind of flatlined out.  The thing about that is that's around the time that people began to get scared of nuclear power, scared of all this other stuff, and we've kind of been routed into rabbit holes of massive windmill farms and solar; and I'm not saying those things don't have their role, but nuclear energy is finally back on the menu.  And in fact, again you may not know about this, but China's absolutely vertical in terms of its nuclear installation.  It's been building tons of nuclear power plants.  It, as a country, is back on the Henry Adams Curve. 

So, what I think Bitcoin is doing, and you're actually seeing this Wyoming, you're seeing this in El Salvador, you're seeing this in other places, it's actually incentivising the buildout of massive scalable nuclear energy and other clean energy generation at scale.  The thing is, what that does is it reframes it.  It is not saying, "Generate dirty power"; it is also not saying, "Generate degrowth", or, "Abolish the industrialised economy", or, "Energy consumption is bad".  It's saying, "Energy production is good and we're going to produce a ton more of it, because it's actually not a scarce thing, and we're going to go nuclear and we're actually going to do that".

So, I think that's the reframe on it, is that Bitcoin gives the decentralised incentive for massive scalable clean energy production.  We're already seeing this happen, as opposed to what the Chinese are doing.

Glenn Greenwald: The reason I think that's interesting is because I do think there's this -- I don't want to overstate it, but this kind of emerging regret on the left, or at least recognition, that the opposition to nuclear power was a mistake, which almost you have to acknowledge if your argument is that there has never been a threat as severe, not even close, as climate catastrophe caused by fossil fuels.  The opportunity to have developed and relied upon an alternative 30 and 40 years ago, that the left marched against around the world in order to stop and prevent, you'd have to say that that was a mistake.

Balaji Srinivasan: Exactly.  And I think also, if it's fully understood that building power plants is an alternative to building missiles, that is to say Bitcoin really does reduce violence in the system.  That is the fundamental thing where, unless that's actually --

Glenn Greenwald: Because of it, because it displaces the American dollar; is that the primary argument?

Balaji Srinivasan: It is a way to store money on a blockchain, where it's secured -- let me put it like this.  Let's say you have a gold brick in your room.  Ultimately, the only way you can secure that is with a sufficient number of guns to hold off attackers who are coming to come and grab it.  Whether those guns are yours or the police's or the military's, like the border around the country, that pile of gold is only secured by the physical force that you can deploy, right, if some bad guy wants to take it, yeah?

Glenn Greenwald: Yeah.

Balaji Srinivasan: But Bitcoin is not like that.  If you have a private key, that cryptocurrency is now in the cloud, and people may not even know, like a Venezuelan Government going after somebody may not even know that that person has it, because it's invisible.  It won't be seen in a metal detector, it is basically wealth that people can save where a government cannot actually apply force to that person to get it, or even a robber; it's much harder for them to do so.

I'm not saying it's a panacea, I'm not saying it solves every single problem, but it is a fundamentally new way of protecting property.  It goes very deep.  The whole Lockean theory of why the state exists partly is about the guarding of property rights, and now we have a way of guarding them with encryption as opposed to physical force.

Peter McCormack: I just wanted to throw in a couple of things on your other two questions or points, Glenn.  So, some of the statistics relating to Bitcoin distribution, some of the reporting on that has been misleading.  Sometimes, what they'll do is they'll use something like a Coinbase address that's a big pool of Bitcoin capital, when really that's representative of maybe hundreds of thousands, maybe even millions of Bitcoin holders, but they're custodying it with Bitcoin rather than taking it to their own wallet.  I'd also love to dig out, there are articles out there that show that over time, Bitcoin distribution is actually increasing.

But you do make a fair point on what do these new large holders of Bitcoin do; what will they do in the future?  We've got people who are holding billions of dollars in Bitcoin.  Michael Saylor has managed to build up a Bitcoin war chest.  What happens when that's tens of billions, maybe hundreds of billions?

Glenn Greenwald: And some of them, we don't know who they are, right?  There are Bitcoin billionaires out there whose identity is unknown, and therefore whose intentions are unknown.

Peter McCormack: Yeah, it is a fair question, and the truth is we don't know.  But one of the experiences I've had being in the Bitcoin community and doing this work, is that there is this ideological view that this is a group of people who wants to make the world better, and it's a very generous community.  There is lots of money redistributed. 

For example, Bitcoin relies on open-source developers, so a lot of people, Balaji probably included, myself, we take part of our Bitcoin and we donate that towards these projects, and I see a lot of money being donated towards projects.  But we really don't know, but what we do know is that the redistribution is happening, and at a time where I think what we've seen, especially during the COVID era with the increase in the money supply, that has actually created further wealth inequality.  We know during the time of Bitcoin, that's reduced wealth inequality, but it's a fair question.

The second thing, in terms of destroying, or the state banning Bitcoin, there's some interesting points to that.  I mean, if the US Government was to completely outlaw ownership of Bitcoin, that would be devastating for the price of Bitcoin, but it would not destroy Bitcoin.  What would happen is you would see the migration of certain people to places like El Salvador.  But it would be devastating on the price in the short term.  But Bitcoin has gone through many tough times and challenges and always survived.

But what I think is a more interesting point is the game theory around banning Bitcoin.  A large number of the Bitcoin companies, certainly the most successful ones, are based in the US; a large amount of Bitcoin is held in the US.  So, by destroying Bitcoin, or banning Bitcoin, what you would actually be doing is destroying parts of the economy, which would be super-unpopular with people who hold Bitcoin, it would be unpopular with companies.  But also at the moment, where Bitcoin is growing and every four years we see this 10X, 20X increase in the value, I actually think it puts the US in an advantageous position over China.  It makes the US a more wealthy country.

So, the game theory around banning it becomes more problematic for the US Government as time goes on.  And I personally think we've got to that point where we're very close to, it's almost there's no logical reason for it to be banned, apart from maybe a few elites within the political system, who see it as a threat to them as individuals.

Glenn Greenwald: Right, but there are legal measures short of banning it.  So, you could force transparency requirements, there was a lot of talk about this with encryption really early on in the advent of the internet.  In fact, the Clinton Administration seized on the bombing of the courthouse in Oklahoma City, to claim that there was this grave domestic terror threat, similar to their rhetoric now.  And as a result, encryption was something that couldn't be tolerated, and there were proposals to require back-door access on the part of the government to encryption.  They're very good at seizing on these kinds of dangers to justify legislative or regulatory requirements to make it controllable, subject to their control.

So, I think you're right.  Just an outright ban on Bitcoin is a very extreme reaction, but measures short of that, to make it less susceptible to shielding, privacy, creating anonymity and the other promises that it holds, those I could see as being more viable.

Peter McCormack: There's two key areas in what Bitcoin offers, which I think need to be looked at separately.  One is the privacy side, and then the other side is the 21 million fixed cap.  I think some people care about one more than the other.  We live in a world now where there are people who care about privacy, but really with our mobile phones, we're tracked everywhere, we know our banks, all our financial transactions are being surveilled, we know our calls are being surveilled. 

So, I know there's some people, and I'm not going to speak for everyone, but they've come to the acceptance that they don't have high levels of privacy.  But at the same time, they're still happy to own Bitcoin, because the 21 million gives them future wealth protection.  So, yes, that angle of having to be tracked, or declare your Bitcoin holdings, in terms of financial tracking and paying taxation, that certainly harms the privacy side of Bitcoin, but it doesn't harm the 21 million, and other reasons people might want to own it.

Now, on that side of things, they can make life more difficult.  What I think one of the best attacks they probably have on Bitcoin is to ban Bitcoin mining.  That to me would be a real threat, because proof of work is so important to Bitcoin.  We would not want to move Bitcoin to proof of stake.  So, you're right to identify there are things out there, but I think we're getting close to the point of no return on Bitcoin, within certain western governments.

Balaji Srinivasan: Yeah, I agree with that actually.  I think what is maybe going to happen, first of all, there's now a constituency for Bitcoin in the US, and that constituency has a lot of high-IQ people across the political spectrum actually nowadays.  Maybe it's 60/40 or 55/45 on the right.

Glenn Greenwald: No, it's getting better, absolutely getting better in terms of the ideological diversity.

Balaji Srinivasan: Yeah.  Ro Khanna and a bunch of other folks, there were like ten democrats that wrote in about it.  It is becoming a seriously bipartisan thing, if it isn't already.  Dennis Porter actually retweeted something on it.  There are a bunch of efforts now this year, like Aarika Rhodes, who's running against Brad Sherman, so she's a Democrat and she's into Bitcoin.  Eric Adams, who's the Mayor of New York City, he's a Democrat, he's into Bitcoin.  Jared Polis, Governor of Colorado, he's a Democrat, he's into Bitcoin, and on and on.

So, I think that it will be fairly difficult, I'm not saying there might not be some crazy person who'll propose a ban, but now there's a real constituency against it, and such a thing would be like the Executive Order 6102, an attempted seizure, like the seizure of gold.  But if you think about the response --

Glenn Greenwald: No, but I guess what I'm ultimately saying is, the closer we get to your vision, this being a genuine material threat to the prevailing order, the more extreme necessarily will be the responses they consider.  Because, like I said before, what rolling power centres do, by their nature, is act in self-preservation.  So, right now we're somewhat distant from that vision and so the reactions are more tepid.  But as that vision becomes closer, you would expect the reactions to become more severe.

Balaji Srinivasan: Yes, but here's the thing that I think on that.  Here's an analogy from venture capital land, or whatever.  Peter Thiel, because he invested in the very first round of Facebook, was able to buy 10% of Facebook for about $500,000, which today --

Glenn Greenwald: That's crazy.

Balaji Srinivasan: That's crazy, right?  So today, I don't know the exact valuation, between $1 trillion and $2 trillion, so the 10% would be about $100 billion.  So, the earlier you react to something, when it's exponentially growing, the cheaper it is to buy into it or mitigate it, or what have you.  And the one thing that the American establishment is not good at is early spotting of issues.  In venture, you'd say, "They pay up".  Here's a reason why.  The American establishment can only see something that is of the size that is like an electoral constituency, meaning really close to 50%.

Glenn Greenwald: This is why I'm saying I find this so interesting, you're absolutely right.  I mean, how long have people been talking about Bitcoin in this increasingly pervasive way?  I mean, at least a decade.  And these comments I referenced earlier by Hillary Clinton were noticeable, precisely because it was really the first time that major political figures in the political establishment of the world's most powerful country, or second most powerful country, depending on how you want to look at it, actually started acknowledging its existence.  It took a decade, and then there's still probably most people in the US Government who couldn't speak for more than 30 seconds on what Bitcoin even is.

Balaji Srinivasan: Exactly, that's right.  So, what's happened is, all of the early adopter, trend-spotter, that kind of talent does not go into government anymore.  It's in venture, it's in angel, it's in founders, or it's in your line of work, the Substackers, and so on, the true decentralised journalists and writers; it's not in the US Government.

So, what that means is basically, since they have glasses that can only see things that are at the level of an electoral constituency, they just don't take it seriously if it's less than that.  And the thing is then, our age, the internet age, something can go from 0.001% to 20% really fast.  So then they're on the back foot, and here's the thing, here's why it's hard.  In order to actually then start looking and spotting things that are 0.001%, do you know how many are at 0.001%?  I see thousands of deals a year.  So, you have to develop almost an entire metal detector, or radiation detector, that's capable of detecting these small particles that could get really huge, and then properly filtering them.  And those are the skills of a founder, or a venture capitalist.

Now what's interesting is that, on the Chinese side, and again I just bring that up, because it actually is like a split screen where you can see the Chinese started from a very, very small base.  If you saw the photos of China in the 1980s, it was a pretty poor country.  The Americans started from number one, but there's a civilisational diabetes thing sometimes, where prosperity actually leads to its ruin, because people get so fat and happy and contented, and they've inherited everything, they think it's always there on a silver platter, they assume the US is number one.  Whereas, Andy Grove has this concept of, "Only the paranoid survive".

The Chinese definitely took that to heart.  They're all engineers.  They're engineers or soldiers, so electrical engineer, chemical engineer, etc, and so they do spot a lot of these things early.  For example, the great firewall, how many people in the US Government could even explain what a firewall is.  I'm not trying to put you guys on the spot, but very few.  Whereas, that's like a tool of policy in China.  So, this is just to say why I say the Chinese Government is dangerously competent and the American Governments' dangerously incompetent.

I don't think the American Government is, I mean, it will react in some really stupid, flailing kind of way, it's probably going to be extremely nasty, etc.  But it's like paying $100 billion, rather than $500,000 for 10% of Facebook.  It's just, at a certain point, when you react that late in life, the costs just go so high that they actually don't have the money to pay for it anymore, and that's the part I don't think people get.

Let me give you a different version then to kind of explain that.  Ten years ago, Thiel was talking about how the US had stopped innovating.  More recently, it's not just the US can't innovate, it's having difficulty maintaining.  For example, a $300 million bus lane in San Francisco; $300 million for this stuff.  You can see it, it's actually ludicrous.  It's not even right or left, it's just completely incompetent government.  They can't paint stripes on the road without a thousand regulations, or something.  Subways are like this in New York as well.  All kinds of infrastructure are like this; the cost overruns are just astronomical.

At a certain point, it becomes something you cannot afford, because if you're really, really bad at allocating capital, it doesn't matter how rich you are.  If you're spending $10,000 on an orange juice every day, it doesn't matter if you've got $10 million, you're soon going to run out of money.

Glenn Greenwald: There's this excellent Chinese propaganda messaging, whatever you want to call it, that really put its finger on the essence of the matter, when the US withdrew from Afghanistan and the Taliban just marched back in the next day as though nothing had ever happened, which is basically what in fact occurred, nothing.

Balaji Srinivasan: $2 trillion. 

Glenn Greenwald: Yeah, I mean it was like a transfer of wealth, it had its purpose, people benefitted from it.  It was nothing to do with the stated purpose, nothing to do with changing Afghanistan.  And so it was an incredible humiliation, I mean they just marched right back in like they weren't the slightest bit bothered, with all the accompanying humiliations on the way out.  The Chinese said, "You spent the last 20 years spending $2 trillion in Afghanistan for absolutely nothing, while we spent $800 billion on high-speed railways that connected the most remote peasant to Beijing and everything in between", and that really is a great metaphor for the path of each country.

You see it now too.  I mean, the US about to involve itself, potentially, in this insane proxy war with Russia and Ukraine and pouring gigantic sums of money into training these hapless, extremist Ukrainian insurgency units.  And again, it's just a transfer of wealth to a group of people that will change nothing besides that.  And then the incompetence there, I mean the incompetence again, comparing it to the stated goals, is a metaphor for how everything is taking place domestically, and I do think it's all falling apart, which I do think is a compelling argument for why they're going to have a great deal of -- because even brute force no longer really works; they can't even amass the force necessary any longer.

As you said, you can be the richest country in the world but if you don't have the competence to allocate the money, no matter how much you throw at it, it really makes no difference, it's like burning the money.

Balaji Srinivasan: Exactly, and that's the thing.  The future of hard money is BTC and the future of hard power is CCP, and many people are not modelling either of those two.  People are in denial about one or the other.  Most people are not modelling both, and if you're modelling both, what it means is that the soft power propaganda state of NYT, and I put them as kind of at the zenith of it -- just as a side remark, by the way, one of my theses, I'd love to hear your view on this, Glenn, is that the reason that, of the legacy power centres of the US, you have academia and you have Hollywood and you have DC and you have media; the reason that the media became the point of the spear against tech is it was the only thing in the establishment that had the 24/7 metabolism of tech. 

They say it takes a year to get a paper on academia, it takes multiple years to get a law out, it takes a year to get a film out.  But the news media had a 24-hour cycle, so they became the most prominent part of the establishment.  For example, you don't see that many anti-tech films.  You did see anti-tech books coming out of academia, but they were slow and they didn't really own the whole thing.  It was really the press versus tech.

Glenn Greenwald: Well also, I think it's because the media kind of commandeered the power of tech in order to empower themselves as a bulwark against it.  The reason The New York Times is powerful now isn't because they distribute about physical papers to doorsteps, it's because the brand means that hundreds of millions of people around the world listen to what they say over Facebook and Twitter and YouTube and other social media platforms.  So, in a lot of ways, they've been able to commandeer the power of tech and use it against tech as well.

Balaji Srinivasan: I want to talk about this for a second actually, because I think this is critically important.  The zeroth I was going to make, and then I'll jump into the other one, is they're totally leveraged on soft power.  And when soft power runs out, and what does it mean when soft power runs out; when the Chinese say, "F-you", when the Trumpers say, "F-you", when the Russians say, "F-you", when tech says, "F-you", when Bitcoin says, "F-you", when Web3 says, "F-you", when El Salvador says, "F-you", when Germany and even India on the sanctions say, "F-you", when everybody says F-you to USG, then the soft power, the convincing, the propaganda, the poking, the shaming, they're just talking to their own echo chamber now.

Then, they want to bring out the gun, but they don't have it anymore.  The hard power isn't there, and they don't actually have the hard money either, that's going to go away soon.  So, I actually think that they're much, much more vulnerable than they think, because they just assume that that thing is there, but then it's shooting blanks.  We'll see what happens on that.

On the other thing, on tech media, by the way, I do think this is really critical in terms of how I look at the world.  And sometimes, you know how after wars, or something, generals on opposing sides will compare notes, and they can kind of triangulate the history of the war from, "Oh, you were doing that?  I was doing this", or whatever.  So, the way I think about tech and media, 30 years ago, tech basically didn't even exist as a sector, or at least there was Silicon Valley doing chips and stuff, it wasn't really thought of as anything beyond plastics, or something like that, or just tech.  So, it was really just media.  And here's my progression.

In the year 2000-ish, obviously was the tech dotcom bubble and then crash, and what happened was actually, tech and media took their own separate ways for about ten years, and here's why.  First, on the tech side, this guy, Terry Semel ran Yahoo, and he was a media guy, Hollywood guy, and it was basically a relative failure versus Google and Dropbox and Facebook and YouTube and so on.  And everybody in tech basically took the lesson that, do user-generated content, not your own content.  Just build the pipes, allow people to bring their own content, because content has risk.  You could spend a lot of time on it, it could just fizzle out.  Instead, let everybody just bring their own content; we just do the technology and we're just basically a dumb pipe, a smart pipe, or just a pipe.

On the other hand, media thought that tech was not interesting, because they were focused on the Iraq War and all that stuff in the 2000s, and in fact even by 2008, tech was not really considered a power, because only Google was really making money on the internet.  Everybody else, like Facebook, it wasn't a public company, people didn't know how big it was.

Glenn Greenwald: It was a joke, a little bit of a joke.  It was very condescending when it was talked about.

Balaji Srinivasan: It was very condescending, that's right.  It was basically, people might have had a Mac as a gadget, but they only thought of it as a gadget, they didn't think it was a cultural thing, right.  So then what happened is from 2008 to 2012, the Financial Crisis, all of these companies wanted to suddenly change their ad budgets, a ton of that money went into Google and Facebook, there's this graph called The Print Media Disruption, and from $67 billion of ad spend in about 2008 in print media, it went down to $17 billion in about four years, this absolutely ridiculous crash, and Google and Facebook just going vertical, and the iPhone going vertical, and all of these tech start-ups found their legs.

This was a huge thing where a ton of the money that had been printed effectively found its way into tech via VC and angel investment and so on.  And so, even as late as December 2012, media, at least formally, thought of tech as being on the same side, or at least it was part of the Democrat coalition.  Remember these articles about how the nerds go marching in, Obama's tech team helping him get re-elected, remember all that stuff, late-2012?

Glenn Greenwald: Yeah.

Balaji Srinivasan: And then, right after the election in January 2013, that's when the knives came out, because media didn't need tech anymore to get Obama elected again.  There's now a gap to settle some scores, they were tired of these tech guys coming in and taking all of their money, and so the big techlash began, where media companies couldn't build search engines or social networks, but what they could do is write stories and shape narratives to paint all these tech guys as villains.

Now, at the time, as I mentioned generals on the opposite sides, we were watching the Snowden stuff and were like, "Why are you guys demonising Google and so on over this?  Google's a victim here", at the time, because they did not want to -- the NSA was doing this stuff without their knowledge, and they were getting hammered in the headlines.  And if you remember, at the time, a bunch of the tech CEOs went and basically collectively confronted Obama about this.  He tried to switch it to a healthcare.gov conversation.  They were all like, "Stop the spying", etc.

So at the time, the nobles, so to speak, were able to "resist the king".  Like the Magna Carta, there was a group of nobles versus the king, and they were trying to push it back.  Then, essentially what happened was over the next several years, even before Trump, what we now call wokeness, proto-wokeness was rising, The New York Times basically adopted the strategy, what they figured out was going to go viral online was dousing their articles in white privilege and heteronormativity, etc.  All these words went vertical, and there's graphs showing that it all happened in 2013.  Paul Graham has tweeted this.  If you google, "Paul Graham hypothesis paper of record", you'll see this tweet. 

So, all this stuff went vertical, then because they figured out they could get clicks by doing this, they figured out how to game the social media system.  And The New York Times then added a few more billion to its market cap, it recovered from the doldrums.  As somebody said, a colleague of mine, racism was not a new problem, but The New York Times' stock price being in the toilet was, and so they just mashed that button over and over again, because it generates traffic. 

Sometimes, they actually admit to this.  A year or so ago, there was a New York Magazine story, "Inside the New York Times' Heated Reckoning with Itself", where they admit, "Hate drives readership more than we care to admit", said somebody on the business side; so, they actually admit this.  They've got the internal analytics where they can look, the emotion in the story drives conversions.  Actually, Matt Taibbi, your colleague, has also written about this with Hate Inc.  There's a mash on those emotions. 

So for basically about six or seven years what happened was --

Glenn Greenwald: That's ironic, because that's the accusation they cast against tech, right, that it depends upon hatred and anger and rage in order to sustain viewership when in reality, that's clearly the business model.

Balaji Srinivasan: Yeah.  So, here's the tricky part about this.  Basically, I think a huge part of what The Times does specifically is just massive projection.  They are this nepotistic, back-scratching culture, this rapacious corporation, even just to the level of subscription.  You can't even cancel your subscription at The Times without calling somebody on the phone.  They implement every dark pattern.  They have the most ad-festooned, tracker-intensive website.  They literally look at the words that are going to drive somebody to rage to get them to click and subscribe.  They're ruthless capitalists to a caricatured extreme.  And even their succession was basically, look, I'm not the kind of person that thinks "white" is an insult, but three rich, white, male, nepotist cousins are contending for the throne from their father, who inherited it from his father, from his father.

This is the total opposite of technology where you have, it's really an Indian and a Persian starting a company together from scratch.  No one's inheriting anything, nobody's getting anything handed down, you're coding it from scratch.  So, they basically projected their entire world view, where there is always a thumb on the editorial scales, where there is always nepotism, where it's a ruthless corporation that's behind the scenes, and they projected that onto tech, thinking that's what tech is like.

Unfortunately, they somewhat succeeded; not somewhat, they largely succeeded in corrupting it, because they managed to get all these wokes to join tech and actually here, I do put a lot of the blame on tech founders.  The reason is, the full stack is not just computer software and computer hardware, it's also the biological software in the sense of the ideas in people's heads and the position of their bodies.  So, the moral stack we did not have.  We didn't have a set of moral arguments.

So you could come at us under there and it's like, you have some guy who's a graduate of MIT or Harvard or Stamford in computer science, and he code the daylights up, but he also has this malware installed in his head on the humanity side.  And even those that's latent, what MIT did is it mashed these buttons so it activated them like Manchurian candidates within the tech companies, "Everybody's racist here".  These are some of the most globally diverse firms in the world.  In fact, there's this website --

Glenn Greenwald: Much more so than the people making the accusations.

Balaji Srinivasan: Exactly, that's right!  Now again, I'm not the kind of person who believes white is an insult, but they are.

Glenn Greenwald: Yeah, but within that framework, they violate their own framework constantly.

Balaji Srinivasan: Exactly, that's right.  So essentially now, what I think has happened is that post-2020, an important series.  So, for about six years, this techlash was happening, and Travis Kalanick got Uber taken away from him, it was decapitated.  By the way, on that, the guy who did it made tons of money on a book advance.  The venture capitalist who backstabbed Travis, his name was actually elighted from all of the news reports.  So, this was something where the unethical VC and the unethical journo combined against the founder.  That's a story that actually hasn't been told, okay, which is a whole separate thing.

But essentially, there were all these tech folks who were just cancelled, attacked and so on, but the thing is, and this actually goes back to the original point, the American regime is just much less competent and much less ruthless than the Soviets or the Nazis or the CCP are, because when the Soviets or Nazis purge somebody, they killed them or jailed them.  Their life, liberty and/or property was taken away.

In this attempt to cancel and crush and so on, because of the soft power, people lost reputation points, they certainly lost deals.  They were financially harmed.  I'm not going to say that it was a small thing, it was a big thing for many people.  For many people, their careers were ruined, but many weren't.  And because they weren't killed or jailed, they could eventually mount a comeback and many of them have, and now they're completely outside the matrix, because when you go and blow up one person in Hollywood or one person in tech, they have 50 friends, and all of those friends have just seen this person getting denounced in the press in this completely unfair way by a group of media corporations that competed with these tech companies, and so they know it is at least partially economically motivated, rather than this moral high horse.

So, that led to, over time, enough people in tech realising that, "Okay, we're at war here".  So then, in 2020, and now we get to the third swing of the pendulum, so 2020, with the early COVID reporting, did you follow this at all?

Glenn Greenwald: Yeah, of course.

Balaji Srinivasan: So, early COVID reporting was something where all the tech journos in particular, that was an area of the woods that I was in, were essentially poopooing the whole thing and saying that people were racist for saying, "The Chinatown parade, you might not want to hold it, or maybe stop flights", or that you were a paranoid bubble-boy.  All these people either work at or used to work at or will work for Sulzberger, by the way, and so there was this cone of contempt towards anybody who could say, "Hey, maybe this thing might be a problem".

Glenn Greenwald: That was when Trump wanted to close the border with China, and Biden called him xenophobic, or whatever?

Balaji Srinivasan: Yes, exactly, and Pelosi was marching around, etc.  And basically, I remember this moment because a16z, which I don't work at anymore, but they're friends, they put a sign on their door saying, "No handshakes, please", the most minor thing you could possibly imagine.

Now, from today's perspective, it's ludicrous, and there was this hit piece that was commissioned on it about how paranoid Silicon Valley's elite were, etc.  This is 14 February, by the way.  Less than a month later, California was in lockdown.  So, this was something that was actually very impactful in technology, because this was an area a lot of us understood, like I actually have a PhD in genomics, other people are in biotech.  Biotech and tech kind of sit next to each other.  A lot of people understood that these tech journos had essentially just proven that they didn't know what they were talking about, they had basically risked everybody's lives.

We were very fortunate that it was not the Spanish Flu, because initially if you look, the graph of deaths was just going exponential like this.  And then, we don't know all the immunogenomics of it, etc.  I think the full molecular biology of COVID, TBD might be that some of the vulnerable were hit first, TBD on that.  Like when Li Wenliang, for example, was 30 years old and he died from it.  But the point being that, had it actually been this catastrophic thing in the sense of a Spanish Flu, it's only going to kill 5 million to 10 million worldwide, rather than 100 million, so it's still a catastrophe, just not as bad as it was; then, these folks would have covered up the whole thing and then gone down choking and gargling with everybody else.

So, that kind of signalled to a lot of people that this is just a fundamentally, illegitimate, incompetent set of people that we must absolutely replace, because the next go-around, for whatever it is, is going to be much more dangerous and they don't know, they don't know that they don't know, they have distribution.  It is a moral necessity for us to displace and replace them with something better.

Then that, if you combined that with all the other tech/media stuff, now I think where we've gone to in 2022 is the V4, which it is decentralised tech and media versus centralised tech and media, where I no longer think of Google and Facebook as good guys.  Facebook is actually the least bad of all of them, because it's still run by a founder.  Google and Amazon and so on, these are just gigantic surveillance machines, unfortunately.  And conversely, you and Barry and Jesse Singal and others coming over to decentralised media has kind of shuffled the deck quite a bit.

So, you have the centralised tech and media, the basically woke capital of the giant tech companies and the legacy media corporations, who have institutional distribution and money and so on.  But a lot of the creative and smart people have come over to the other side, and I actually think that we're going to win in the medium to long term.  That is my history and my current assessment, shoot at that, let me know if you agree with that.

Peter McCormack: I was going to make a suggestion, because I've hit a deadline for myself as well, and we haven't really got into the solutions bit.  We've done an amazing hour and a half.  Would you both be interested in doing a part two where we talk about the solution, because I think we'll need about an hour for that?

Glenn Greenwald: Yeah, I absolutely do.  So much of what Balaji just said, I have a lot to say; so much about what we've talked about already, I agree completely, we haven't gotten to a couple of the key points, including where does it go from here and how.  And rather than just trying to do it in seven minutes, because we all have commitments, and rushing it, I absolutely think it would be worth it to schedule a second part and do it in a more deliberate way.  I would love to do that.

Balaji Srinivasan: Sounds good.