WBD473 Audio Transcription

The Growth of Decentralisation with Travis Kling

Interview date: Thursday 10th March

Note: the following is a transcription of my interview with Travis Kling. 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.

Travis Kling is the Chief Investment Officer and Ikigai. In this interview, we discuss the need for decentralization, Bitcoin as pristine collateral and whether we’re living in a simulation.

“I think the digital world is going to continue to eat the analogue world and how dystopian or not that ends up being will be entirely a function of the individuals that are working towards one eventual outcome or the other, which is what makes doing this type of work to me so worth doing.”

— Travis Kling

Interview Transcription

Peter McCormack: Travis, how are you doing, man?

Travis Kling: Boom, baby, here we are!

Peter McCormack: In Texas.

Travis Kling: Yeah.  Nice to have you here.

Peter McCormack: I phoned Parker Lewis when I got here and he first said, "You're free again, you're free!"

Travis Kling: Yeah, good to have you here.  Land of the Bitcoin miners now.

Peter McCormack: I know, man, it's wild here, right?

Travis Kling: Yeah.

Peter McCormack: How long have you been here now?

Travis Kling: Permanently, about four months.  My girlfriend and I started spending time here, doing Airbnbs back and forth between here and LA last spring, and found a place and -- I grew up two hours north of here, my family's still up there, so it's nice to be back in Texas.

Peter McCormack: And are you mixing with the bitcoiners here?

Travis Kling: Yeah, some.  Honestly, I've been in a hole, working non-stop.  It's been, as you know, a lot going on lately, so been trying to get out and do some stuff.  The Unchained Capital guys have got a good thing going.

Peter McCormack: Yeah, you know Parker?

Travis Kling: Yeah.

Peter McCormack: Yeah, because they're doing a whole bunch of stuff for South By as well, I think, because South By won't touch Bitcoin, fuckers!

Travis Kling: Right!

Peter McCormack: Well, I love it here, man.

Travis Kling: Yeah, Texans will touch Bitcoin for sure!

Peter McCormack: Yeah, I love it.  It's interesting meeting some of the oil and gas people down at the Houston Meetup, and they're in.

Travis Kling: Yeah, that was my whole career before crypto.

Peter McCormack: Was it?  Oh, yeah, you were trading.  Was it oil futures?

Travis Kling: No, equities.  Yeah, long/short energy equities and non-control private equity and debt in the energy space.

Peter McCormack: What's that like for them at the moment?

Travis Kling: I haven't kept up with the guys nearly as much.  I mean, it was brutal for years, and then now it's obviously been going the other way.  I haven't kept up with them too much.

Peter McCormack: All right, man, well listen, I always like getting you on the show, you know that.  A couple of years ago, there were two people we would get on who would tell us similar things, it was you and Caitlin Long.  You would both be talking about what's happening in the markets, it can't carry on forever, there's too much debt, this quantitative easing can't go on forever; and we were getting to the point where we were like, "We need to talk about this", because some of the people were saying that COVID was the pin that was going to break the bubble, but it didn't really.  But what's happening now, this last week, two weeks, this might actually be the pin that breaks the bubble.

Travis Kling: Maybe.  That type of stuff is always hard to call, hard to predict.  And then even, I think when you're in the moment, it's hard to know.  I think certainly some of the occurrences that have happened over the last month have woken people up to the need for censorship-resistant money for sure, and just decentralisation in general.  I just feel like there's been a lot of billboards over the last month about why decentralisation matters, and a lot of that ties back to Bitcoin.

I think some of the de-platforming stuff is less relevant to Bitcoin, but still firmly in the category of why decentralisation matters, and how slippery of a slope that can be, and what does free speech mean in a social media world.  I think you've been seeing a lot of that stuff with the Rogan stuff.  And even going back to, Donald Trump is not on Twitter, the President of Russia has a Twitter account, and that's just an interesting thing that we've got going on right now.

Peter McCormack: Yeah.  And that points to another interesting thing, because the work we've been doing over the last couple of months has been super-interesting.  Towards the end of COVID, it all got a little bit samey, a little bit boring.  But what's been going on now, some of the conversations we've been having, are really super-interesting.  It doesn't matter who you speak to, you can speak to an ANCAP, you can speak to somebody who's a bitcoiner, but maybe they're not a libertarian, maybe they're a Republican; we've even had some people on the show who are lefties as well.  And what we've found is, it doesn't matter where you are on this political spectrum, political, apolitical, there are certain truths that everyone is seeing at the same time; there are certain things where everyone's pointing in the same direction, and actually even outside of that.

So, we did this interview with Mark Moss talking about cycles, talking about all the various cycles, economic cycles, political cycles.  And then, I was listening to the new Ray Dalio book, and again he was talking about these similar things; there's these truths that keep coming forward that a lot of people are attaching to.  And I think it all points back to what you're saying here, this absolute need now for decentralisation.

Travis Kling: Yeah, and in a world where humans' reliance on technology is unequivocally going to increase, and that trends look inexorable.  In that world, you've got to start looking more closely at the entities that wield the power via technology, and it's just, whether you're on the left, whether you're on the right, whether you're a Bitcoin fan, whether you're not, you can, I think, pretty objectively look at the state of Big Tech currently and say, "Is the centralisation of technology causing societal problems, yes or no?  If humanity is going to rely more on technology in the future than they are today, what is the likelihood that those problems could potentially be exacerbated from the levels that they are currently?"  That's a setup that I think people will all sorts of leanings, or whatever, can just look at and go, "Yeah, that looks like a potential issue".

Peter McCormack: And do you think that centralisation of power within technology companies is an issue just in isolation, or is an issue alongside this kind of creeping authoritarianism within western liberal democracies?  A great example, you mentioned it in your email, which I read this week -- anyone listening, by the way, sign up to the Ikigai email, we'll let you pitch that at the end, because it's a great email; but a great example being what happened in Canada. 

A lot of people made donations via GoFundMe.  A lot of people did those in good faith, believing that money would get to those truckers.  GoFundMe were fine with it until the government came into them and said, "Hey, we're not having this", and they prevented it.  And then, we went to a point where people were making Bitcoin donations, and then even the guy collecting the Bitcoin donations, he got a visit from the police --

Travis Kling: That's right.

Peter McCormack: -- the private keys were owned for part of that Bitcoin as well.  So, is it in isolation, is it together, is it both?

Travis Kling: Yeah.  I'm not sure how I think about it.  I think when you look at trends like AI, robotics, some of the other biggish trends that are coming in in technology, and how much power Google has right now, whoever is in the lead for robotics and AI, that's more power than Google has right now, and maybe that ends up being Google.  That's, I think, on the Big Tech side.  And, on the government side, looking at just how things that felt like they would never happen seem to be happening with a higher frequency, a higher occurrence.

Peter McCormack: Can you give me examples?

Travis Kling: The GoFundMe.  I mean, that's a great example, and the Canadian Government, which you think of that as a developed nation -- like, if that was happening in, I don't know, Turkey or Venezuela or something like that, I think people would pay less attention to it.  But you think of Canada as being kind of like the United States.

There was a point that I saw brought up that really drove it home for me which was, what they did with the GoFundMe, well if I tried to raise a GoFundMe to fight the government about what they had just done to shut down the Ontario Truckers' GoFundMe, would that GoFundMe also shut down, so you don't have the ability to fund -- the people can't fund pushing back against the government?  That just gets such a slippery slope so fast. 

We need things like this to bubble up to the top of the collective consciousness like they have, you know, it's front-page news everywhere, it's all you've seen on social media for a few days, and it requires that bubbling up to get people to lift their head up out of whatever it is they were doing.  People are busy, people have got all kinds of stuff going on.  It's really just crypto people that have this natural tendency to think so much about the way the government is infringing on rights, or the centralisation of Big Tech is infringing on people's rights.  Crypto people just have a tendency to be like that; most people are just living their life, doing their thing. 

But when something like this pops up, then it acts as a forcing function for more of society to say, "We need an alternative.  What are the alternatives?" and then they start looking elsewhere.  I think just as importantly as that, some of the solutions -- Bitcoin's an amazing solution for the money side of things.  For some of the Big Tech side of things, in my opinion, I don't think Bitcoin can solve some of that. 

Maybe nothing that exists right now, in its current incantation in the crypto ecosystem, Layer 1 smart contract platforms, or whatever, dapps, maybe those can't solve that, that centralised authority of Big Tech problem, which means you're going to need developers, the people that are actually going to build the shit; you need their attention to be caught as well too, and you need it to be egregious enough that they're willing to stop doing whatever their giga-brains are doing, whatever smart thing they're building in regular life, to be like, "I actually think building something in this path is a worthwhile thing".

Peter McCormack: We'll come back to that, because I do want to talk about that, because whilst it's a Bitcoin show, I have got an evolving opinion on this, and that thing in your email you said, "Some of this stuff can't be built on Bitcoin", me and Danny, it made us sit back and question it and think about it.  But I do want to touch on that truckers' thing that I think is kind of interesting, in that we covered it on our show, we had Greg Foss and NobodyCaribou, we had them on to talk about it, and I was fully supportive, I made a donation, I thought this was bullshit; but I also realised sometimes we get stuck in our own echo chamber, whether it's on social media or making the show.

We got a bunch of emails from bitcoiners afterwards on that show who were like, "Listen, there is an alternative view on this".  I support the truckers, 100%, I support their right to protest, but there were specific examples, one guy whose mother or father had their operation cancelled because they couldn't get to the hospital, people couldn't get their kids to school.  I flipped it the other side and said, "Civil disobedience has to create some difficulty for people", but I don't think the trucker issue, I don't think a lot of people saw that as an issue outside of our cohort, actually.  I think some people do and there were some louder voices, Jordan Peterson's and such, who did, but I don't think enough did.

What that made me realise is that, okay, some people did, we got a few more people.  Russian billionaires having their assets stolen, again we can discuss and debate whether that's right or wrong; that's another group of people.  There's a group of elites now that realise they're at risk.  There are people who are just in Russia being de-platformed.  There is a whole list of people who are now being given these use cases for censorship resistance and decentralisation. 

What it feels like to me is we're getting a flood of things in at once.  A few years ago it was, "I can buy weed on the internet.  Cool, that's a use case.  Wikileaks can't get payment rails, that's a use case".  But you'd get one every year or two.  We're getting all of them in one go right now.

Travis Kling: Yeah.  I had not thought deeply about, I guess, the negative aspects of civil disobedience.  What you just said makes sense.  I think universally, getting support to affected Ukrainians, that's universally positive; and you had the crypto ecosystem that raised $50 million in a week and got it into people's hands.

Peter McCormack: Unreal.

Travis Kling: That definitely made it to the global stage as well too.  And, like I said, you need those things to act as a forcing function for -- power tends to corrupt, and absolute power corrupts absolutely, and people aren't going to pay attention to that, unless it's right there in their face, I think.  I thought the same thing about the GameStop, Robinhood, WallStreetBets changed the rules kind of thing to keep Robinhood, WallStreetBets people from, like everything that happened with Citadel Securities, that whole thing back in, whatever, January/February of last year. 

That was one of these things that bubbled up to the top of the collective consciousness, because the little guy was winning at the big guy's game; and then the big guy changed the rules, right when the big guy was getting beat the worst, in order to not have the little guy win anymore.

Peter McCormack: Remind people listening what happened, just because there'll be some new people who won't know the full story.

Travis Kling: Yeah.  There was a huge short squeeze on GameStop stock, and Robinhood changed -- stock was skyrocketing higher day after day after day.  And Robinhood changed the collateral requirements, the margin requirements, and basically shut down the ability to buy any more GameStop, and said that it was under this guise of margin requirement, type of stuff.  But it so obviously looked like big Wall Street hedge funds that were getting run over by the little guy in WallStreetBets collectively, and then changed the rules so they'd stop getting run over.

Peter McCormack: Protecting the big guy against the little guy.

Travis Kling: Yeah.

Peter McCormack: This is why the Russian thing's interesting, with what's happening with the oligarchs essentially being subject to asset freezes right now.  I saw about that $600 million or $800 million, fuck knows how much it was, but the superyacht that the German authorities have just taken.  And, people can debate whether that's right or wrong, because he's an oligarch and the relationship with Putin, whether that's like a Mafia boss, whether it's a necessary asset freeze in this war game at the moment.  But outside of that, historically all we've seen is the little guy getting squeezed in all these situations, the little guy getting fucked, whether it's the truckers or the GameStop people, it's always the little guy.

But now we're seeing some big guys get fucked, and I think that's raising this idea that anybody, you literally said it in your email, "Your ethnic group --", I can't remember your exact words, but, "Someone may come after you.  Everyone's at threat, and I think everyone needs to realise, everyone's at threat".

Travis Kling: Yeah, your social class or your ethnic group.  And that's what I mean, it's just a slippery slope like that.  And I don't know, I guess I try and use a compass of something like an inalienable right, just a God, if you believe in a God, a God-given right, or just a natural law, however you want to frame it; but is free speech an inalienable right, and what does that mean in the context of social media platforms that are owned by corporations?  Is uncensorable money an inalienable right? 

The invention of Bitcoin was a total step change in the technology of money.  Money, in some ways, is just a technology, and within the backdrop of these current events that have been going on, that type of question and implications for that, people are starting to see that a little bit more clearly.  Because, yeah, maybe everybody thinks that Russian oligarchs should have their stuff sanctioned, and I think I'd generally probably agree with that.  But then, the next thing you know, what about truckers that are protesting against the vaccine mandate?  Well, that feels a little bit more shaky.

Then, you can look at the history books, and it's easy to see that as you start eroding these things, the next thing you know, it's your ethnic group, it's your social class, it's the people you care about.  And the things that seemed impossible, all of a sudden seem a lot more likely.

Peter McCormack: It makes me think of something else as well.  I've brought it up previously whereby, I think you're a few years younger than me, but a similar age, in that we've lived through this really steady, kind of stable period of three or four decades, whereby it feels like the big events of history, the big wars, the big changes in society, we've missed it all, it's all in the history books.  But we're going through this period of time now whereby history's being rewritten, and I don't know what the fuck's going to happen, Travis, over this next year, decade.  We could come out at the end of it in a very different world.

Travis Kling: Yeah, I don't know if I'd agree with, "Everything happened before our time".

Peter McCormack: I'm on about the big events of world wars.

Travis Kling: Yeah, but the erosion of trust of centralised authorities, that didn't look the same in the 1990s as it looks right now.  And you can look at polls over long periods of time, and you can see that.  And, I've thought about how that started, what started society beginning to feel that centralised authorities were failing the people at an increasing rate, and I think about -- and part of it is in the information age, you can catch people that are full of shit, that are lying; you can just catch them better.  It used to be, you know, catching Nixon back in Watergate, that took all kinds of 1970s stuff to have that happen.

Peter McCormack: And a stroke of luck.

Travis Kling: Yeah.  But in the information age, it just gets easier to put some of the pieces together about how full of shit, or how not in your best interest centralised authorities have been acting.  And, I think a lot of it started in America with the reaction to 9/11, and then us going over to Iraq and talking about Weapons of Mass Destruction, and spending however many tens of thousands of lives on both sides, $10 trillion over that period of time, under this guise of Weapons of Mass Destruction, that never ended up actually being the case.

Peter McCormack: Well, we knew we were being lied to; everybody knew they were being lied to.

Travis Kling: Not at the time.

Peter McCormack: I felt like we did.

Travis Kling: Okay, well then, even if that's true, so the government's sitting there lying to you.  And then, I think the Financial Crisis was another big step in this, where subprime metastasised, almost blew up the global financial market, and nobody went to jail, and all the rich people stayed rich basically.  And people just looked at that, normal people just looked at that and were like, "Why wasn't anybody held accountable for that?

Then, if you really start to dig deeper into it, the reaction to the Financial Crisis in 2008, from a monetary policy perspective, has then set us off on this path now that we cannot get off of.  And, when the next crisis came around, in COVID, the monetary policy response was so massive in this direction of loose monetary policy, that you're just going further and further, driving this train straight off the cliff, and we're just going to see what happens, basically.

I think, and maybe it's just me being neck deep in crypto stuff all day for years now, and that just makes me biased, but I think more and more people are waking up to just that general tendency for centralised power to be failing people at multiple levels, whether it's at the government, whether it's Wall Street, whether it's Big Tech, and decentralisation, distributed-ledger technology, is the technological platform to go drive societal change for the good, and I think it's a multidecade trend.

In some ways, I don't know if "happy" is the right word, but I know that we need these things to happen more and more to wake people up more and more to the need for an alternative.  You have to have these forcing functions, otherwise people are just too placated by their day-to-day.

Peter McCormack: I see it more here.  I don't know what it's like for Danny, because he lives in Australia, but I see it more here than I see it in the UK.  I see it in the UK, but it's like a 10X here in the US.  Every problem that we have in the UK is 10X worse, and I don't know if it's the problem is 10X worse, or the left/right divide is making it look 10X worse, but it always feels 10X worse here.

Travis Kling: How bad is the divisiveness in the UK relative to the US?

Peter McCormack: It's different.  There aren't battlelines drawn on specific issues.  So, I can give you two examples.  So, our equivalent of Republicans and Democrats is Conservative and Labour Party voters.  I wouldn't say there is a massive divided on vaccines, whether you're Labour or Conservative.  My friends, whether they're one or the other, their decision to be vaccinated, or to oppose vaccines or vaccine mandates, wasn't along that political line, it just wasn't there.

There may be a slight bias towards Conservatives being more like Republicans, but it's not as big an issue.  Similar here, I'm now finding a little bit, with what's going on with Ukraine and Russia, in that there's almost universal condemnation for it.  Whereas, I'm finding my more conservative/libertarian friends in the US are a little bit more suspicious about what's happening and why it's happening and why do we care and do we only care because the media's telling us, and why don't we care about what's happening in Palestine and Yemen?  I think they're wrong in that, I think people do care, but we don't have that divided -- what's it like in Australia?

Danny Knowles: It's probably more similar to the UK, I think.  And I think actually, the people who oppose the vaccine and the mandates, in maybe the UK and I think Australia, I think actually it's more the left wing, and not the woke left wing; but the people that are making a big stand in Australia are the tradies.

Peter McCormack: The working class?

Danny Knowles: It's the working-class people, yeah.

Peter McCormack: Yeah, so it's very different.  So, this is where I think I get in trouble, or I get into arguments with people, is that they have this expectation, being a bitcoiner, that I have very similar views to them; but I'm not just a bitcoiner, I'm British, and so I'm very influenced culturally by how we are in the UK.  I think the problems are exactly the same, but like I say, it just feels worse here.  It almost feels like you're leading the race for the fracturing of everything that's happening.

We have a crap Prime Minister.  Well, from the spectrum of political leaders, actually he's not the worst.  He opened up the UK from COVID before everyone else.  Again, we don't need to get into the debate of what's right or wrong, he did champion that.  Yes, he shouldn't have been having the cheese and wine parties, but everybody I know was having their own private cheese and wine parties anyway.  But he's of a reasonable age to be a leader of a country, he's not 80 years old.  We don't have people like Nancy Pelosi, we don't have all these things where we keep hearing about politicians benefitting from their investments in the stock market and being able to be privy to certain information.

I feel like the US is just fracturing ahead of us.  We're on a similar trajectory, we're just behind, and one of the reasons, I think, is that we don't have two-party politics, we have four or five parties, of which we have two main parties.  But we have that release valve; if you can't pick one side, there are one or two other parties you can vote for.  So, I think that's one of the other differences.

Travis Kling: I mean, the two-party system in America, I don't know, it just feels like it's never been more fragile than it is right now.

Peter McCormack: I just don't think it works.

Travis Kling: And, in a digital age, in an information age, where you can pick whatever group you want to be a part of that's a global group, and I can have a much closer relationship with some guy I've never met in person before that's in Asia somewhere, relative to my next-door neighbour, physically next-door neighbour, and the tendency for the information age, I think, to make people define themselves, who they are, by this much broader thing, makes it even harder to shoehorn into this two-party system.

Young people, I think, just feel that a lot more acutely than older people, and it seems like so many more young people just recognise that both sides are full of shit.  Both sides are equally full of shit, in different ways.  Eventually, boomers are going to -- golly, they're holding onto this power and money, just our politicians are so old in America and they're just holding onto that power and that money, and you're going to have to pry it from their cold, dead hands. 

A lot of the change I'm hopeful can be pushed through in coming decades, is going to be partially predicated on just enough time passing that enough of the younger generation is in positions of influence and financial positions that some of these changes can actually happen.  I think the really optimistic view of that would be that there's an inevitability to that.

Peter McCormack: Yeah.  And are there fundamental changes to the political structure, or is it just a change to the people who represent the constituents?  The ongoing debate I have with libertarians, I was having it online today, is that I think the ideology is great, I just don't think it works.  I think on paper, it's perfect, I agree with everything you're saying; I just don't know how you get there from where we are now, it's too big a leap, which is why I always say, I wish more libertarians were involved in politics to maybe have that release valve, to pull on the size of the state, rather than pulling left to right, pulling big versus small.

It's quite interesting this guy, Josh Mandel, he's a guy who's potentially one of those people who can make a difference, because he's a bitcoiner, he believes in small government.  That kind of person, if you had enough of those types of people, they could make things more interesting, because I still don't know how you decentralise politics.  I mean, yes I do, I know you can focus on a more local level, but I don't know if you can achieve a real decentralised form of government, where there's no real power structures.  I think you'll always have them.

Travis Kling: You're already seeing a little bit of this with the crypto ecosystem as a whole.  But if the crypto ecosystem continues to grow in prominence and frankly, market cap value, like I think we all think it's going to, then very quickly, crypto is going to be on the ballots of the speak in a meaningful way; maybe not literally, but you're going to have politicians that are going to have to have stances on this. 

You're already starting to see that, and there are some amount of crypto people that are willing to be single-issue voters, and you could get into a situation where it's some tight-contested race, congressional race, senatorial race, whatever, and neither party or neither candidate has come out with any sort of view on crypto, and you might be able to pick up some single-digit percent vote swing by just coming out and being supportive of crypto, because crypto people are that fired up about this.

Peter McCormack: Well, it's a growing hack as well.  When you declare yourself as a bitcoiner, or even a crypto person, you suddenly gain this whole bunch of followers, or people who are interested in supporting you.  Nobody gave a fuck about El Salvador, maybe certainly two years ago, maybe even a year ago, probably couldn't even point to it on a map, they didn't know who Bukele is.  Now, everyone knows who he is, and everyone in Bitcoin or crypto loves him.  He speaks the right language, he's clearly being influenced by them as well, and I think a lot of politicians are starting to see that.  Danny, how many people, how many Senate people --

Danny Knowles: Politicians?  At least five have reached out probably.

Peter McCormack: In the last, what three weeks?

Danny Knowles: Yeah.

Travis Kling: Wow!

Peter McCormack: People who are running in a race for like a seat in the Senate.  We've already had a couple on.  We're just rejecting them now, because every interview's the same.  But I get why they want it, because they want access to that audience.

Travis Kling: That's an incentive structure that you just love.  That's just a shift; that matters.  You run that incentive setup out a few years, and you can get shit changed based on that.  It's going to take a little while, it's not going to happen overnight, but you get into the back part of this decade, and that just starts to look a lot more promising.

Peter McCormack: Flip it the other way.  Here in Texas, imagine one of the people running, excuse my use of language, because I don't know the exact terminology, but running for the Senate or running for Congress here and being anti-Bitcoin?

Travis Kling: Yeah, it's probably not going to go very well.

Peter McCormack: It's not going to work, there's too many jobs here now, too many people here.  I think this state has flipped.  I think this is certainly a Bitcoin state, so it's flipped.  But I think others are realising the hack, and the game theory points in one direction only.

Travis Kling: That's right, yeah, which is nice.

Peter McCormack: Because, what is it, 30% of the US population owns some form of crypto; is that correct?

Travis Kling: I think that's right.  That new study just came out a few weeks ago.

Peter McCormack: Yeah.  So, let's talk about this crypto stuff, because it's kind of interesting.  Me and Danny were talking about it earlier, and I've been debating it a bit recently, because this show's a Bitcoin show, right, that's what I focus on, arguably a Bitcoin maxi, but not entirely; I just see them as different things.  And that's why your email was interesting, because I see Bitcoin as separating money and state, right, it's decentralised money. 

I see crypto slightly differently, and this kind of position I'm evolving to is that, aside from the platform stability, questions which can be a separate debate, or the future of these platforms, like you rightly said, "The technology might not have even been invented yet", but this idea of companies that more operate like decentralised platforms, that have a more decentralised power structure, more decentralised ownership, that is something actually I can totally get behind.  I don't know if it's workable, I don't know how it's built, I don't know what platforms; but that idea that perhaps you can build a Twitter where the power's decentralised so you can't censor people, I like that idea.

Travis Kling: Yeah.

Peter McCormack: And the ownership again is decentralised, or the benefits of that are decentralised, that's something I can get behind.  It's where these people argue, "Oh, we've got a better Bitcoin, because it's faster transactions", that's the shit I can't be bothered with.  But the idea of these new forms of decentralised company, it's not even whether or not I can get behind it, it's happening.

Is it possible for these technologies and companies to get the network effect?  That's what I'm not sure about.  I'm not sure if a decentralised Twitter can get the network effect of a centralised Twitter.  How does it have the money, or how does it have the -- I've run companies.  The idea of running a company decentralised doesn't -- like the football club, for example.  People have said to me, "You should decentralise decision-making".  No, I'm running this like an authoritarian.  I don't need everybody to vote on every decision.  Can we build these companies in a more decentralised way; is it possible?  I mean, you can hope for it, you can see the benefits of it happening, but can it be done?

Travis Kling: These are two questions I've been asking for years: what do you need decentralisation for; and how decentralised is decentralised enough?  And we still don't have firm answers to that for these various different use cases.  But I think, going back to the earlier part of this conversation, when you imagine the immense power that is going to be wielded by technology companies, as we move through this decade, into the next decade, and we've got autonomous driving cars, and machines are taking more and more people's jobs, we're spending more and more time in metaverses, AI is just running more and more of our life, you've got to write an email and you've got some Siri that you talk to and you're like, "Hey, I need to write an email about this", and the AI just takes a crack at the email for you and sees how it shakes out, that kind of thing, all of that's coming.

If corporations end up being in control of that publicly-traded, profit-driven, kind of thing, you look at the problems we're having right now with Big Tech companies, and you go, "How big are those problems going to get in that type of situation?"  And I'm not going to pretend I know exactly how it's going to play out, I just really believe that a decentralised approach has a higher likelihood of not exacerbating the problems that we're seeing already with technology.  That just seems to make sense to me. 

That doesn't mean there aren't other problems, and the problems that we're seeing with wealth concentration and wealth inequality, I don't necessarily know if crypto's going to solve those.  But I think it's got a way better chance than the way the system works right now, and the sort of crony capitalism and rotten democracy that we find ourselves in today in America, kind of the exact things the Founding Fathers were warning about a couple of hundred years ago.

Peter McCormack: Have you seen the Boeing documentary?

Travis Kling: No.

Peter McCormack: It's on Netflix.

Travis Kling: Boeing, the planes?

Peter McCormack: Yeah.  You know the issue there with the 737 MAX, and the MCAS system?

Travis Kling: Only vaguely, but yeah.

Peter McCormack: Okay, interestingly, I decided to watch this documentary while on a flight!  It might not be the best idea, I wouldn't advise everyone to do it!  But what happened is, Boeing, they were the gold standard for safety with aircraft, amazing track record, and they released this new plane, the 737 MAX, and back in, I think it was 29 October 2019, Danny will check, a Lion Air, which is I think an Indonesian airline, 737 MAX crashed.  It's like, "Oh, shit, this happened".  It was in the news and kind of died away from the public consciousness.  Then, a year later, or even six months later, an Ethiopian Airways 737 MAX crashed. 

So, the stuff came out in the news, there was a problem with this system, called the MCAS, which is basically a stabiliser.  This documentary went into why this happened.  It's fucking unbelievable, but it comes back to you point about what happens when there are profit-driven incentives.  

So, they dug into what happened was, Boeing merged, or they bought McDonnell Douglas, and then McDonnell Douglas people started changing the way that Boeing was run, and then they started to become slaves to Wall Street, "How do we become more efficient?  How do we make more money?" which meant less people working on quality control, to this point where there was this one point where this lady said, "We used to have 14 people in warehouse on the production line.  We had one", and they found a ladder still inside the plane that was completed on construction, things like that.

So, what happens with the 737 MAX, they were getting their arse kicked by Airbus.  Airbus released, I think it was the A350, and so the quickest way to have a new plane is to reuse a current plane, so they just cut all these corners.  They used a current plane, bigger engines, more efficient, but because they couldn't redesign the mainframe, they had to lift them higher because of the way they designed it, the plane might stall, because it would go too steep.  So, they had this automated new MCAS system which would level it. 

But what they didn't want to do was train any pilots, because if you had to train pilots, there was a big cost, so they didn't.  So, these pilots were flying with new technology they didn't know they had, and this led to these two crashes.  That was the unintended consequences of it.  Profit-driven incentives and Wall Street leads to cutting corners leads to bad outcomes.

Travis Kling: Yeah.  Where can decentralisation, as a technology, alleviate incentive structures that are no in the best interest of the people, just as a fundamental question?  I think you can sit there and think about Bitcoin and you can go, "Open-source software code, it's better to have that in charge of money than a bunch of old, white people sitting in a back room somewhere, that have all kinds of allegiances, and are former bankers".  That's just a better way to work around potential conflicts of interest. 

You can also think about it from the perspective of, if aliens came down to Earth, and they're an advanced civilisation and they have the benefit of hindsight, and they know the role of technology and they look at it and you can just go, objectively, does it make sense?  Humans have this tendency to do these things and are fundamentally self-motivating types of people.  And when you put them inside of an incentive structure, like corporate profits, just over time, it's not that they're bad people; it's just that you get into this incentive structure, and people just end up doing what they're incentivised to do.

Peter McCormack: It can be lots of little bad decisions.

Travis Kling: Yeah, that's right, just how everything works.  And I think about the echo chambers that social media create through how the algorithms work.  Facebook was just trying to get people to be on Facebook more so they could have more advertising dollars, and then next thing you know, the algorithm is built in a way that is causing divisiveness that has this country as torn apart as it's been, in a lot of cases, and in decades.

I think about the Black Lives Matter protests and the riots in Los Angeles when I was there, and I was just sitting there and helicopters flying all over the place and people getting shot, not far from where I lived, and there was just a lot of divisiveness.  And social media echo chambers were a meaningful driver of that, in the context of corporate, profit-driven motivations.  And it's one of the reasons why I think DAOs, which we're just scratching the surface on what that's going to do, but just something as simple as just trying to buy a copy of the Constitution, or whatever, and the innovation that's happening on the DAO side, you run that out over the course of this decade and into the next, and you really can imagine a situation where a lot of the natural incentive-structure-driven problems that you can have can be alleviated in this decentralisation, that is made possible by technology, that we have not had for very long.

Peter McCormack: The thing I then think about, which by the way, the guy in the Boeing documentary said, "When there's a plane crash, it's not usually because of one thing, it's a whole series of little things that lead up to that one bad event", for whatever reason.  But this is where I have a real difficulty discussing these ideas with people who've got more libertarian ideas, because the human greed, or the human problem, isn't always considered enough for me.  I'm going to keep talking about this Boeing one, just because it feels relevant.  But the FAA are there as a centralised body to protect you and I from the manufacturers of the planes, and the pilots, from making these decisions that screw with us.  They have their process of recording and analysing every crash, they have their processes, or regulations, for construction of planes, etc.

In a fully decentralised world, without any centralised governance, I think you lose things like this, because how do you build in that structure?  So, I see this future whereby we start to understand what things should be decentralised and what things should be centralised.  There's also this really great book I read recently, called The Fifth Risk, which is all about the transition from Obama to Trump, and all the things that the Trump Administration weren't ready for.  And it just talks about all the things that government does, that probably won't get done if you don't have a centralised authority.

So, that's the area I'm most interested in.  When people talk about liberty, let's talk about what we lose and the risks of those sides of things.  I think about this a lot.

Travis Kling: I'm not an anti-regulation guy.  I think you just have to be clear-eyed about how tainted that process can get, and how the people that are in charge of the regulating, those are humans with networks of people and allegiances, and jobs they had before that, and maybe jobs they want after that; and you've got to be clear-eyed about that.

Peter McCormack: Big questions, man.  Okay, listen, going back, just because you spend a lot of your day looking at the charts and in the charts, going back to where we are at the moment and thinking specifically about a country's been cancelled; and by the way, a lot of it I disagree with.  I saw yesterday some film festival that's pulled the Russian films from it, which I think is wrong.  And I think there's a dog show that's banned Russian dogs now!  So, I think the cultural banning's gone a bit too far.  I'm on the fence on the sanctions to oligarchs.  I know if I say I support it, there are people listening going to say, "Well, you're supporting people coming after your money".  I think these people are essentially a Mafia, so I think it's slightly different.  But there are people who are really going to suffer at the hands of this cancelling, especially in Russia. 

We see Jerome Powell come out, was it yesterday or two days ago and said, "There may be more than one reserve currency"; we have the US dollar as a reserve currency, it's certainly losing its position, it's not lost yet; we have Bitcoin growing as a position.  I don't know what Russia and China are going to trade in, but it's not going to be dollars, because they can't.  We had Iran today saying they're going to be taking their oil debts in the euro.  We've got this radically changing world; how much are you thinking about this?

Travis Kling: Certainly paying attention to it.  That stuff definitely takes time.  I wouldn't think that it's the sort of thing that you just snap your fingers and things change meaningfully overnight, but I've always thought, not always, sorry; for the last 18 months-ish, the investment case for Bitcoin as pristine collateral is generally how I've been framing it and thinking about it, and the dollar's the world reserve currency.

Now, when people use that term, they mean that a lot of commerce and contracts are based in dollars.  If Brazil is selling bananas to France, they price the contract in dollars.  But the global financial system is a debt-based financial system, certainly, and treasuries are the collateral foundation of the global financial system, and their current market cap, the aggregate value of all the treasuries in the world right now, is probably $25 trillion right now, or something like that, and the number's definitely heading higher.  And the interest rates on treasuries set the interest rate for every other thing on the planet.

When you look at the sort of outlook for treasuries as a financial instrument over this decade and the next, that looks challenged.  And so, people do start to look for, what else could there be out there?  That list is surprisingly short.  The world does not want to use renminbi, or Chinese sovereign debt, as the collateral foundation for the global financial system; the euro, that's a joke; the yen, that's a joke.  Gold, I mean, I don't know.  It's hard to find things that can make any credible sort of case.

Peter McCormack: Why is the euro a joke, why is the renminbi a joke?  I don't understand, because I just see them as smaller currencies than the dollar.

Travis Kling: So, the euro's in a worse shape from an unsustainability perspective than the dollar is, and you don't have to look any further than how many trillions of negative yielding sovereign debt there are in the European Union, and how wide of a dispersion there is in the European Union of different countries that contribute different things, and having one currency trying to govern all that.  And then, to have the debt of that central bank be a collateral foundation, it just doesn't make any sense to me.  The renminbi, I just think a command economy like China, a communist country like that, the world's just going to have zero interest in having the debt of that be the collateral foundation.

So, when you look at Bitcoin, it honestly looks like the next best option.  The thing that I'm looking for over this decade, from an investment case perspective for Bitcoin is just, is it making slow progress towards being pristine collateral?  Is it more widely available to be used like that?  Is it getting integrated into the pipes of the global financial system more and more?  Is there a very liquid, well-established borrow/lending market for fiat currencies based on Bitcoin?

Peter McCormack: Tick, tick, tick.

Travis Kling: Yeah.  And that's why when I see NYDIG raise, what was it, $700 million or something like that --

Peter McCormack: I didn't see this?

Travis Kling: This was not long, a few months ago, their last funding was like $700 million.  I'm pretty sure they're going to spend $700 million trying to get the pieces in place for Bitcoin to go be pristine collateral.  That's not something, again, that's going to play out this year or the next, that's just a broad direction over the course of this decade, that you may get to the end of the 2020s, and Bitcoin has started chipping away market share at treasuries.  That how you get $5 trillion market cap, $10 trillion market cap, and beyond.

Peter McCormack: What's stopping it at the moment?  Is there anything specifically that's holding it back?  As a reserve asset, does it need to be more stable, or is that not too important?

Travis Kling: I think the stability will come as it inevitably grows in size.  I just think it's too new and too whacky, and the decision-makers are too old.  Too many of the decision-makers are too old and too unwilling to seriously consider it, but I think all of that is solvable and will get solved over the course of this decade.

Peter McCormack: Do you think the hand will be forced on it anyway?  I've talked about this before in that, I don't know about you, but I'm essentially -- Bitcoin's my reserve asset now, certainly for funding the podcast, I keep the majority of the money in Bitcoin; personally, the majority of my money in Bitcoin; that now influences my decisions quite a bit, not small, day-to-day ticket items, but buying a house.  I've just bought a new house.  Absolutely how I purchased that house was influenced by my ideas around Bitcoin, the loan I would take, the length of the loan, how much the loan was, etc.  So, I'm essentially there and nobody can stop me, no one even makes me or takes decision away from me.

It's the same for Michael Saylor and MicroStrategy, it may be the same for you, it may be the same for Danny, it's certainly the same for Bukele in El Salvador.  This growing list of people who can do it without somebody centrally having to make that decision, in design being decentralised, it's becoming this global reserve asset by the decentralised decision-making of people who choose to make that decision.  Is that how it happens; eventually, you're forced to because everybody else is?

Travis Kling: I don't know, to be honest with you.  I mean, I think it is an idea that is captivating enough to catch people's attention, and Bitcoin has put itself into a position where it is increasingly, I think, beating society over the head with its value proposition.  Back to the first part of this conversation, it's why you need actions like what we've seen recently, to act as that forcing function.  And then the next thing you know, some normie's asking me about, "Hey, what's this whole Bitcoin thing?" and the idea just spreads like that.

Peter McCormack: So, four and a half years ago, or five years ago, when you were trading long/shorts, we've had this conversation a few times, you saw this Bitcoin thing as this once-in-a-generation opportunity, you must feel pretty vindicated for that decision?

Travis Kling: Yeah.  You know, I was worried about -- I thought, and I'm not even sure where this came from; I had distrust of institutions at a very early age, so that by the time I was 18 years old, I thought both political parties were full of shit and I was just generally distrustful of institutions.  I was not somebody over the first ten years of my career, I did not spend a lot of time thinking deeply about the future broadly, like I'd think about, "I'm going to get married and have kids", where I'd want to live, what I'd want my career to be, that sort of thing.  But say, for example, the role of technological evolution, as it relates to society, that was just not something that I'd spend a lot of time thinking about.

Now I've been deep in crypto for years, you do spend a lot of time thinking about that, because if you own Bitcoin, yeah, it's a good one-year bet, three-year bet, five-year bet.  In some ways, it's also a 20-year bet, right, it's a 50-year bet in a lot of ways.  So, if you own a lot of something that's a 20-year bet or a 50-year bet, you start thinking a lot about 20 years from now, 50 years from now, these sorts of things, and it has just been a ton of that kind of thought that has me looking at the current state of the role of technology and how it interrelates with society, and how ripe it is for change.

It gives me a lot of hope that it really feels like younger people feel that more strongly than older people, so that zoomers are going to feel that more acutely than millennials, and whatever past zoomers are going to feel that even more.  And I just think that when you look across the whole landscape of potential solutions, that decentralisation, as a meaningful part of it, not everything's going to be decentralised.  Your point about running your football club, that's not what I'm trying to say, but just having it as an integral part of the way that technology is going to be interrelated with humanity in the decades to come, I just think that that looks like a really great way to approach it.

Peter McCormack: All right, man, well listen, I've got one thing left to talk to you about, it's the metaverse!  We've talked about it a little bit.

Travis Kling: It ducktails into a lot of this, actually.

Peter McCormack: Yeah.  It's something that I think is super-exciting and freaks me the fuck out.  It could be the best and worst of everything we have going on right now, depending on who controls it, who owns it, who manipulates it, what it ends up being.  You can totally game it out.  Sci-fi films always tend to predict the future pretty well!  I'm not sure how far away we are from Skynet.

Travis Kling: It's a Ready Player One.  It looks shockingly accurate.

Peter McCormack: Yeah, Ready Player One looks pretty accurate, but does Ready Player One become the Matrix, that's what I don't know!  You explain it to some people who'll think you're a psycho, but you can game it out how it can happen.  I also worry about some of the behavioural changes that might happen, a bit like when Facebook first arrived.  It was just fucking fun, throwing sheep at each other and poking people, and now it's just --

Travis Kling: Pokes, wow, I forgot about pokes; shoutout to pokes!

Peter McCormack: The poke's still there.

Travis Kling: Really?

Peter McCormack: Yeah, it's hidden.  You have to go into their profile and then you click on the dropdown and then you can still poke.  I poke the occasional friend!  The occasional poke!

Travis Kling: Peter, don't poke me, please!

Peter McCormack: I'm not going to poke you!  But I think it was fun, right, it was this new thing, and now it's not fun, it's like, "Fucking hell!"  Could the very early metaverse be fun?  I did this interview with American HODL and Junseth and we were talking about it, and they were basically saying, "There is no metaverse, it's really just VR".  But I see it as connecting parts of VR together.  But looking at what the early metaverse could be, for example I've got my Oculus Rift here, have you got an Oculus?

Travis Kling: No, I've used them before.

Peter McCormack: Have you been on the Walk The Plank thing?

Travis Kling: Yeah.

Peter McCormack: Fuck!

Travis Kling: I know.

Peter McCormack: Can you jump off the end?

Travis Kling: Sure.

Peter McCormack: I can't.  But my favourite thing in there is the boxing game, and that's built by one dude, that boxing game.  But it's pretty real, you're moving around, you're throwing your punches.  Afterwards, I'm fucking wrecked.  And to start to think you can immerse yourself in worlds like that, okay, that's cool.  Can I pick up a guitar and play for Metallica at Wembley Stadium?  Yeah, you probably can, those unreal experiences.  But I start to think about, this is all the fun bit, but when does it go beyond fun?  In these virtual worlds, people complain about sexual harassment; do kids become addicted to it?  Does it become like a drug, because normal life is so fucking horrible that people want to be in the metaverse all the time?  These are all the things on my mind.

Travis Kling: Well, I think the gaming side of it is one thing to think about, and just existing, or commerce of various sorts, is another way to think about it, or another aspect of it.  And so, the journey for me personally was when Axie Infinity really took off, and we weren't involved early there, but when it really blew up in May of this year, we started digging into it to understand what was going on, and understand play-to-earn, the scholarship concept, and --

Peter McCormack: I've got no idea what you're talking about.

Travis Kling: So, there's this crypto project called Axie Infinity, and it's a real basic game.  Think of it comparable to one of those old Facebook games, Farmville, or whatever; and the end-game mechanics are such that you can have an asset, an NFT or whatever, an end-game asset, and you can breed these Axies and you can make money, you can generate tokens by doing that.

What ended up happening was, Axie owners, people that owned a lot of Axies, would loan the Axies out to people in Southeast Asia.  Southeast Asian people would do the activities to breed the Axies, and just think of it like grinding in a video game; you've heard that term, "I've got to grind to get to the next level up", etc.

Peter McCormack: Oh, and they use those time incentives to make you pay to jump the clock?

Travis Kling: No, it wasn't that, they would just loan out these Axies to people in Southeast Asia.  They would do the grinding work of breeding the Axies, and they would get a portion of the profits that were generated by that, and that's the concept of play-to-earn.  And they call that lending of assets, they call that "scholarships", basically. 

What you were seeing was, Axie breeders, scholarship recipients, that were earning a living wage in Southeast Asia, because the speculators, like me, the wealth gap between the speculators and people in Southeast Asia and developing countries was so wide that you could peel off what amounted to a living wage for somebody.  It ended up being a bubble, and price has come down a lot.  It remains to be seen how that story's going to shake out.

But when I'd finally done enough research to understand what was going on there, we're at the early stages in what is going to be an enormous trend for that.  And part of what gives me such high conviction that it's going to be such a big deal is my conviction that over the coming decades, machines are going to take more and more humans' jobs in the real world.  We're going to have autonomous driving cars soon; how much longer are we going to need accountants?  At what point are computers doing all accounting?  You just think about all kinds of different jobs that, over a couple of decade period of time, machines are going to take more and more people's jobs.  It's part of the reason why I think Universal Basic Income is an inevitability.

It's not bad, because it's technological-innovation-driven abundance.  But what you end up doing is, what is humanity going to do all day?  They're going to have Universal Basic Income that's going to give them a roof over their head, food, and okay lifestyle, you're going to have a phone, you're going to have Wi-Fi, but then literally what do you do all day?  What's going to happen, I think, is that all of these new worlds are going to be created digitally, and you're just going to totally reimagine the concept of work.

In these new worlds, the physics can be different than the real world, the economic incentives are different than the real world, the governance is different than the real world.  You're just creating entirely new realms, and then people are going to be trying to coordinate and incentivise groups of people in this world to do different things.  Does that sound familiar?  It's kind of like the real world, right.  And as I've been going further down this rabbit hole, and I consider myself a practising Christian, but the more I feel like I'm convinced that we're in a simulation.  The more research I do on this, the more I'm convinced that this is a simulation.

Peter McCormack: We're in a simulation right now?

Travis Kling: Yeah.  Obviously, I don't know for sure, but the more I do --

Peter McCormack: Well, I know the theory.

Travis Kling: Because, the way to think about it is, okay, it's 2022.  Let's run this out a couple of hundred years, which in the history of this Earth, is the blink of an eye, a couple of hundred years.  You're telling me that in a couple of hundred years, you cannot have a non-playable character inside of a game that you have coded in some sense of self to that non-playable character inside of that game, such that that character realises that it's in this world, which is like a soul, the way that I think about it.

Peter McCormack: So, I'm a character somebody's playing?  I would like better skins, I would like to be fucking as tall as you.  Picked me out as a short, fat, British guy!

Travis Kling: Don't get me wrong, I mean this conversation gets really weird, really quick.

Peter McCormack: Go weird, man, let's do this.

Travis Kling: No, but it is something that I really have been thinking a lot about, and it seems like we're just at the earliest stages.  This is the top of the first inning of this.

Peter McCormack: What percentage chance do you put on us being in a simulation right now?

Travis Kling: I don't know.

Peter McCormack: I mean, more than 50%?

Travis Kling: I feel like it's been creeping up to closer to 50%, yeah.

Peter McCormack: I understand the theory.  We've gone from, when I was like 14, the first real people had mobile phones, like maybe one of your friends did; to now.  Everyone's got it and it's a supercomputer.  You used to play SimCity on your old computers, but now there are these worlds that my kids play games in that are unbelievable, that spawn out of nowhere.  So, like you say, you go forward 200 years, there's a version of Fortnite that you spawn this infinite world that's already created.  I get all that.

Travis Kling: Yeah.  The other thing too is, I like to do a quantum physics podcast.  I listen to Lex Fridman, and then I've found some other podcasts through Lex.  I like listening to these guys talk.  They've got these world-class experts on that are talking about where are we and what do we know about the Universe.  And the more I hear these guys talk, the more it sounds like a player in a video game trying to describe the video game around them.  And our understanding of physics is like the player inside the video game talking about the way bits work inside of the video game, seriously.

Peter McCormack: It's a lot to think about there!

Travis Kling: Next podcast!

Peter McCormack: How weird does it go; what's the weirdest?

Travis Kling: I think it's just going to be fascinating.  I mean, in our lifetimes, it's just going to be fascinating, and I think the digital world is going to continue to eat the analogue world, and how dystopian or not that ends up being will be entirely a function of the individuals that are working towards one eventual outcome or the other, which is what makes doing this type of work, to me, so worth doing.

Peter McCormack: I think we're very lucky as well to be -- well, sometimes I think we've lived through the best of times, but also sometimes I think, "Maybe it's not the best of times.  Maybe the 1970s would have been a lot better".

Travis Kling: Music was a lot better.

Peter McCormack: I'll give you that, definitely a lot better.  Music's been shit since I think about the 1990s, was the end of good music.

Travis Kling: Not too far.

Peter McCormack: We can get into the weird metaverse afterwards.  You're going to have to send me some podcasts I need to listen to, tell me ones to check out.  I talked about your email a few times in this, Travis; it's brilliant.  Tell people where to go and subscribe to it.

Travis Kling: Yeah, it's ikigai.fund.  You can sign up for it, it goes out the first of every month.  And you can read all of the historical ones, I've been writing this thing for three and a half years now.

Peter McCormack: 42 of them?

Travis Kling: It is something like that, yeah.

Peter McCormack: Well listen, man, always like talking to you.  Thanks for coming on, and we should try and get a beer in this next couple of weeks.

Travis Kling: Yeah, man, we'll do it soon.  Thanks for having me.

Peter McCormack: Cheers, bye.