WBD485 Audio Transcription

Beyond Bitcoin Maximalism with Pete Rizzo

Interview date: Wednesday 6th April

Note: the following is a transcription of my interview with Pete Rizzo. 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.

Pete Rizzo is the editor of Bitcoin Magazine, and one of the industries leading journalists. In this interview, we discuss the evolving narratives used by Bitcoin maximalists, fundamental questions of who Bitcoin is for and what it will be, and what lies beyond maximalism.

“We’ve swung very heavily towards putting bitcoin’s asset on this pedestal, that Bitcoin is this asset that does not compete with anything, but it has these Invincible qualities. And I think that what we might find is that we’ve over-optimised for that.”

— Pete Rizzo

Interview Transcription

Pete Rizzo: You've got a notepad, I feel it's reasonable.  It's got to be equal quality here.

Peter McCormack: This is to keep notes as I ask you things and maybe I'll ask you further things.

Pete Rizzo: That's true.  Well, it does seem to be a question and answer format.

Peter McCormack: Okay.  You know we've started?

Pete Rizzo: Goddam it!

Peter McCormack: How are you, man?

Pete Rizzo: Have we?

Peter McCormack: Yes, we have, we're not going to do that again.  How are you, Rizzo?

Pete Rizzo: I am good, host of podcast.

Peter McCormack: Guest of podcast, it's great to have you again.  How many Rizzos have we done?

Danny Knowles: It's the 3rd or 4th.

Peter McCormack: 4th?  We did one remote, didn't we?

Pete Rizzo: This is the 4th that we've done.

Peter McCormack: We're all really liking it every time you write a new article, because they're fucking awesome.

Pete Rizzo: Thank you, I appreciate that.

Peter McCormack: I think you are approaching subjects that other people aren't and going into a level of depth which is super-interesting, it makes people think.

Pete Rizzo: It makes people unhappy, that's for sure, that's the thing.

Peter McCormack: But like they say, if you are pissing people off, you are doing something right.  We have that continual problem.  We've had probably eight emails this week complaining about the Scott Horton show, ranging from, "Why didn't you factcheck him live.  He's a lunatic, Russian apologist".  The reply to every person is the same, is that if I'd brought somebody whose views were counter to Scott's, I would have had eight emails saying, "Why have you got that person on?  Why are you a West apologist?"  So, we always say, we will talk to anyone, we have no bias, well not anyone.

Pete Rizzo: Clearly not anyone.

Peter McCormack: Well, we had Laura Loomer.  But I think what it is, it's up to the listener to listen to what you say, do their own factchecking, interpret it themselves.

Pete Rizzo: It's really offloading the liability here onto the --

Peter McCormack: Well, no, I don't think so.  I think we have a responsibility with it.  But I think it's important for the listener to check their own bias and understand there's a difference between facts, opinions and interpretations.  So, someone like Scott Horton, if you think he's spouting shit, it's most likely that you have a different interpretation, or you have a different opinion.  But you should go and factcheck what he said and see if there's any truth to it.  Usually, the needles thread through the middle somewhere.

Pete Rizzo: Researching things is good, people should do that more often, I agree.

Peter McCormack: So, who are you pissing off right now? 

Pete Rizzo: That's a good question, yeah.

Peter McCormack: Well, this one isn't out yet.

Pete Rizzo: No, this piece is not out yet, but it's been heavily workshopped with a lot of people.

Peter McCormack: Okay.  Well, listen, you sent us two articles -

Pete Rizzo: I did, yes.

Peter McCormack: -- but straightaway when you talked to me about this one, I was like, "I definitely want to make this show, because I think it's super-interesting".  We are going to discuss the world of Bitcoin maximalists.

Pete Rizzo: Right.

Peter McCormack: What was the inspiration to do this?

Pete Rizzo: That's a good question.  I think that it's become pretty clear that  people see a future where Bitcoin is very successful, by and large; that seems to be a unanimous opinion in Bitcoin.  But when you actually drill people on specifics of what that future entails, you get a varying amount of answers.  So, I'd say most of our current messaging, as bitcoiners, is about how the current financial system is unsustainable and failing.  But what's interesting is, we haven't really directed those questions inwards.  So, do we have the same confidence about Bitcoin's success into the future?  The more that I asked that question, the more that I found that there were divergent opinions. 

So, my argument was really to try to figure out, "Okay, how confident are we that Bitcoin will continue to work in the future?"  Obviously, there are questions about its design, the people who are the most expert about this subject seem to have the most questions, so this article's really trying to envision, "Look, there's going to be a post-2140 word, where Bitcoin is no longer producing and issuing new Bitcoin", and there are seemingly many opinions about how Bitcoin gets and overcomes that obstacle, or even that it is an obstacle.  So, I think that was just something that… 

I made the joke earlier that I'm a bit of an anti-confidence merchant; when I see confidence, it makes me uneasy.  I think that current bitcoiners today have this idea that Bitcoin is inevitable and that it will surely succeed without any real effort on their part, and that is very much a sentiment that runs in contrast to my experience with the developers and the people who've been working longest on Bitcoin.  So, this piece was a bit of an exploration of why that appears to be the current status quo.

Peter McCormack: Do you think people are confusing what they want to happen with the potential that it will happen?

Pete Rizzo: I think that people respond to confidence and they easily fall for certain types of stories.  So, a phrase that I've been workshopping recently is the "fiat rapture".  There's a lot of people within Bitcoin right now who are promising this cataclysmic end to the financial system that currently exists, and they're saying that Bitcoin is some sort of solution to that.

I think what's interesting is, I always try to ask an opposite question if I'm given some piece of information.  That story really maps pretty heavily to a lot of religions.  So, a lot of religions will promise some future afterlife and cataclysm, this is the rapture, right.  So, if you're familiar with Christianity, I'm a Catholic, in my world view, it should be that the world will end imminently and that there'll be some great reset to which I will benefit; sorry for using that term, that's politically charged.  But, I think the fact remains that bitcoiners are, by and large, falling into the pattern of propagating this fable that there needs to be some sort of end to the current system, and then we will somehow prosper from that.

I think that there's a couple of problem with that.  One, it distracts us from actually asking meaningful questions about Bitcoin and actually moving that system forward; and it creates an environment where people are very complacent about improving that system in a way that it actually can be competitive with the current system.  So, I find it to be an odd thing that we've become so accepting of that story, because it requires us to believe very negative things will occur imminently, and that somehow we will benefit it.  And then other scenarios, we just don't accept that story. 

So, an example, I mentioned that I'm a Catholic, I'm Catholic by birth, but I'm not religious, I don't currently think that there will be a rapture and I don't think we need there to be a fiat rapture, I don't think that needs to occur.  And I think that those stories can be problematic, because ultimately Bitcoin is another driving piece, Bitcoin is ultimately a consensus system; people have to run nodes and they have to accept software and they have to make changes to Bitcoin, they have to preserve the system.  So ultimately, our thoughts and opinions about Bitcoin do matter eventually, I think.

Peter McCormack: We're going to need those Bitcoin, Danny!

Pete Rizzo: Yeah, so I don't know.

Peter McCormack: You know what I'm thinking though, aren't you, Danny?

Danny Knowles: What are you thinking?

Peter McCormack: Well with regards to the --

Danny Knowles: The last interview?

Peter McCormack: Yeah, because CK thinks in the next decade, we hyperbitcoinise, everything else is over.

Pete Rizzo: Yeah.

Peter McCormack: My question for that really is that, there's definitely a change in the kind of reserve currencies of the world.  There is a fracturing dollar, there is a rising yuan, there is a rising Bitcoin.  There are risks with the dollar, but there is every chance it just -- the powers that be that make these decisions, they get together, they rethink the financial world, they remonetise the world; I don't know what they do, but the dollar crashes and then the dollar just exists again and you carry on.

Pete Rizzo: Right, yeah, exactly.  It's the sort of thing with, the maths has to add up.  My counterquestion to that has been, "Well, there is no equation that sums up the universe, or why it mathematically exists; and in fact, the universe is infinitely expanding.  So, in fact, the universe actually bears more resemblance to the fiat economy".

Peter McCormack: Maybe, I don't know, I'm not buying that one.  The universe may be infinite already, not just infinitely expanding.

Pete Rizzo: Right, yeah.  I'm just saying, we accept these sorts of things.  So, going back to that article that I put out for Forbes, it's basically about a divergence in the vision for the future of Bitcoin, and I think that what I wanted to put out and I wanted to express is that our opinions about Bitcoin have changed pretty radically over time.  They've been shaped by certain assumptions, and those assumptions, some of them have not turned out to be true.

If we accept the framing that Bitcoin is the only most important cryptocurrency, whichever flavour you  want of that, there have been differing views on that, they have changed pretty radically, and I don't think that there's been a good assessment of how that change has occurred.  So, that is what I tried to put together.  Bitcoin is a phenomenon, we're all coming to this technology without much that helps us with it; this is a new thing that's never existed before in all of humanity, and I think that if you look at the early days of Bitcoin, there was a lot of assumptions about it that turned out to be incorrect.  So,  think it helps to keep that in perspective, because I think we're likely finding ourselves in a period where we're likely making other assumptions that, well if not incorrect, they don't need to be correct, those things don't need to be correct.

Peter McCormack: So, what are these two different divergent forms of Bitcoin maximalism?

Pete Rizzo: Okay, so just to go back to reset the observations, so developers are coming to Bitcoin, they're coming to Bitcoin fresh and they're just looking at the code.  One of the things that pretty immediately obvious is the subsidy of Bitcoin declines to zero.  Because we want 21 million Bitcoins, eventually Bitcoin will stop being produced by the protocol.  So, that's assumption one.

Assumption two becomes that, as Bitcoin continues to evolve, other people start producing other cryptocurrencies.  So, developers need to have some sort of stance on what is happening here and to explain this phenomenon.  So I think initially, as they see this emergence of altcoins, they begin to assume a couple of things: (1) that there are useful features on these other chains; and then (2) that these other chains are competing for transaction demand with Bitcoin, there's some sort of competitive relationship here.  So again, not that we currently believe that, but this was the initial assumption.

So really, Bitcoin maximalism 1.0, you have this original idea that takes these two ideas and it makes a new idea with them.  So, in the original Bitcoin maximalism, you have this idea that Bitcoin will be a platform for all kinds of blockchains, all kinds of cryptocurrencies.  You have this idea that on top of Bitcoin, there'll be many sidechains, many types of assets, and you'll be able to use Bitcoin in all these different ways.  So, again, you have to trace that back to the assumptions.  So, they're making assumptions about the state of the technology and then they're designing a solution.  So, that solution tells us something about the assumptions.

So, why would you envision a state in which there are many blockchains running on top of Bitcoin, unless you are doing that to solve some sort of problem?  So, you take these two things and you look at them, and you can say that the outcome is equal to this input.  The input is, they're assuming there's problems; and the output is this idea that you would build Bitcoin as a platform, that not only does Bitcoin have a fixed monetary supply and a finite asset supply, but it's also a platform; and this is an intrinsically valuable component of Bitcoin that we need to unlock to reach this future state.

So, in vision one, you have this idea that Bitcoin will compete with and assimilate these other markets.  So, as these other markets and other features become valuable, Bitcoin will compete against these platforms and subsume them.  So Bitcoin, in this case, becomes a platform, as something that you build on top of.  What you should notice in describing this is also that this describes a lot of other cryptocurrencies, and I think where this article was hard for me, because I wrote it in a bunch of different ways, because I think you can explain a subject in a lot of different ways; and, one of the other interesting things, in addition to looking at it as, there's current Bitcoin maximalism and old Bitcoin maximalism, there's also the cryptocurrency world that sort of inherits a lot of the original assumptions about Bitcoin.

So, the way that I track it is, you go back to the original state.  There's Satoshi, he makes this new thing.  Out of this new thing come assumptions, out of these assumptions come solutions, and then over time, we have this divergence of people who still carry on these assumptions, or people who have assumed new things.  So, I think the argument here is that, just to distil it, the original version of Bitcoin maximalism was very much based on the idea that Bitcoin was, or needed to be, competitive with these other markets, it needed to assimilate these other markets.  Ultimately, that is not the current version of Bitcoin maximalism that we have today, obviously, because I'm certain nobody on your show recently has come and said anything remotely similar to that. 

Today, we have this idea that monetary maximalism, I will call it, which is that Bitcoin is intrinsically valuable, it doesn't compete with any other asset in the world, it's intrinsically valuable; and not only that, because Bitcoin is intrinsically valuable, block space, the network is intrinsically valuable.  So, you're making this assumption now that, in its original state, Bitcoin competed against all these other things and it was destined to outcompete them; and that has changed to, Bitcoin does not compete with these other things at all, it will never compete with these other things, because it has this inherent demand, it has this special quality.

Peter McCormack: But it does compete, because you make a choice between using Bitcoin or gold or fiat, so it does compete.

Pete Rizzo: This is where it becomes interesting, and the piece is divided on -- look, something that's unique about Bitcoin is it is an asset and a network, and the asset is the network.  So, this was a bit of an exercise into describing, there seems to be a large change in the movement towards talking about describing and evangelising about "the asset" of Bitcoin.  But then, there is the network, and these two things are synergistic.

You cannot have a world in which Bitcoin, the asset, is successful where the network is not successful, which means the network does not operate in an economically viable way, it does not have a means by which it continues to operate.  So, you have this question of, "Okay, if we are on this spectrum where these two things need to exist, have we gone too far into talking only about the asset, and are we underdiscussing the network and how that network will evolve?" and that's the assertion, I think.

Peter McCormack: What would you define as success for the asset; and what would you define as success for the network, separately?

Pete Rizzo: Well, this is what's interesting.  I think you have this meta idea, and this is kind of maybe going back into how the different cryptocurrencies look at it, that we're criticising the current fiat system because it's unsustainable; that's the claim that literally everybody who's coming on here is making, is the current financial system is unsustainable.  But then, what is it that makes Bitcoin sustainable?

Then, you have this idea that Bitcoin needs to be economically viable.  This is the only way I've found to describe it; it's very confusing to me how to phrase this.  But this idea that, after we stop producing, the protocol stops producing Bitcoin, Bitcoin needs to continue and somehow needs to continue operating, which means the incentives need to hold up under that model.  There needs to be people who still mine Bitcoin, there needs to be people who pay to send transactions; and ultimately, the system needs to continue into the future.

So again, this was sort of an exploration of that uncertainty, and I think what you're starting to find is that, people who are really excited about the asset are starting to say things that people who used to be very excited about the network are kind of saying, "Well, hey, that's weird you're saying that now, because we've never thought that before".  Again, I'm not trying to say that one of these sides is correct, or one of these sides is wrong; I'm just saying that they're starting to diverge.

So, a good example would be, some of the people in the monetary maximalist camp no longer think that there need to be very high fees on Bitcoin.  That contradicts and starts to unravel a lot of the assumptions the developers have historically made, because the developers are assuming that fees need to be high, because they're assuming that mining equals security.  And they're assuming that, if it costs a low amount to censor transactions, that people will try to do so; because again, the network maximalists, developer-type people, they assume that Bitcoin is always under threat, they assume that it is constantly a network that is capable of being subverted.

The asset people seem to think the opposite.  They seem to think Bitcoin is this indominable force that can never be stopped, so you have a very drastic difference in sentiment.  One group believes that Bitcoin is inevitable and invincible on this level that no other asset has been; and this other group says, "Bitcoin is essentially always under threat.  Any minute, we need to be constantly on guard for some attack".  So, those two groups are going to have different assumptions, they're going to have different attitudes, because they believe fundamentally very different things about the network itself.

Peter McCormack: I think there are people who are in both camps though.  I think there are people who think of Bitcoin as inevitable but it isn't invincible.  But just to add to that, I do some of the people that think it's inevitable are hyperbolic and don't spend enough time considering the threats, or what will happen.  So, the one thing I just discussed with CK is -- sorry, Danny, you're going to have to put these sequentially out -- is that, he talks about Bitcoin's inevitability and it being binary.  It either becomes the global standard for money, or it fails and dies.

In my world, no, I don't see it binary.  It may never become the global standard for money, but it may be a tool that is useful for people, it may have a role similar to gold, it may be a network whereby you use it to transfer money, but it isn't the global standard for money.  I don't know, but I don't think it's binary.

Pete Rizzo: Well, this is the thing, is that I think that the temptation of us as humans is to apply narratives to Bitcoin.

Peter McCormack: Of course.

Pete Rizzo: Look, I've been a journalist in here since 2013, and one of the things that I've been thinking about a lot recently is --

Peter McCormack: Well, basically our only journalist!  You maybe, you and Aaron van Wirdum.

Pete Rizzo: Yes, Aaron is very talented, and looking forward to his future work.  But the way that these cycles develop, what happens is -- the only thing we can say about Bitcoin is that it's going up in value over time.  But when you get into these cycles, we start serving these narratives and building these narratives around Bitcoin.  Then we start thinking, as humans, that these narratives are important for Bitcoin.  Are they?  Because it seems to me that these past cycles, people have built entire narratives around Bitcoin that no longer exist, or are no longer useful and that people no longer believe.  So then, is that also true of the current narratives we're spinning?

So again, just to go back to what you were saying about, "I think there are people in both camps", I think this article is really just an attempt to -- I think what's frustrating people that are reading it is, I think nobody really fits into one camp or the other; what I'm trying to describe here is a difference in biases, that essentially if Bitcoin is a union of these two things, you can see that if you tilt one way, you end up with this sort of assumption suite; and if you tile the other way, you end up with these other assumptions. 

I think what is helpful in that is that we can start to tease out some of these things.  So, your point about, "What is Bitcoin's ultimate destiny?" Bitcoin only has to be economically viable, it only has to continue.  It does not really need our narratives, it does not need us making any sort of thing about it; it needs to have enough demand and use to continue in the future for the people to continue operating it, because it is a decentralised system ultimately.

Peter McCormack: Do you think it would be fair to say that a fair position would be, actually we don't really know what it's going to be, we can only decide what it is right now, based on how people use it, and what it will be can totally change, because it's this organic beast that people adapt to, or it adapts to environments?  The reason I bring that up is, I do not believe whatever Satoshi's intentions were, that he could foresee what mining would become, and certainly would not foresee it become something where it's become being part of stabilising the grid.

Pete Rizzo: Yeah, Hal Finney's second tweet, looking at the externalities of proof of work and wondering how to reduce CO2 emissions, this is his less popular tweet to running Bitcoin!  Yeah, but I think mining is an excellent example of one of the things I've been thinking a lot lately, is Bitcoin is a network that grows over time, it has effects at today's scale that we just couldn't have envisioned in the past, and that has a dramatic effect on how we're thinking of the development of Bitcoin and the continuance of Bitcoin.

But again, I think what I've been trying to point out here is that, we've swung very heavily towards putting Bitcoin's asset on this pedestal, that Bitcoin is this asset that does not compete with anything, that it has these invincible qualities.  And I think that what we might find is that we've over-optimised for that, because ultimately we can't live in a world where -- look, every bitcoiner right now spends cash and they save in Bitcoin.  There's no future state of the Bitcoin Network where that's the behaviour of the people using it, because you need the network to continue and people will need to be incentivised to do that.

Then you say, "Okay, well we have the financial privilege in the West, we can rely on these financial systems, and then there's these international people who will have to use transactions".  Okay, well now these international people are living on your network where you're just this weird rent-seeker, so I don't know, some of these problems start to become confusing to me, and this is why I'm trying to present them, and doing a very bad job!

Peter McCormack: No, you're doing a brilliant job.  Honestly, you're one of my favourite people to interview.

Pete Rizzo: Can I joke about how bad I think about I'm doing in this interview?  That would help me a lot.

Peter McCormack: You can continue to do that, and I will continually say how well you're doing.

Pete Rizzo: I will welcome the backlash.

Peter McCormack: When Danny was like, "Shall we get Rizzo on?" I'm like, "Fuck, yeah", every time, because you bring completely new subjects and completely new questions, and you do what a journalist does, which is challenge people, which is literally the role of a journalist, and we don't have a plethora of journalists in Bitcoin.  We have a plethora of cheerleaders.

Pete Rizzo: Yeah, the confidence game.  I think we should still ask meaningful questions of Bitcoin, because if our main claim is that the current fiat system is unsustainable, then to me, if I was going to make that claim, I would want to be very sure that the Bitcoin Network is sustainable.  And look, I think there are people that have good theses on this, and I'm not trying to say that either group is -- as I said before, I'm trying to divide these people between the technologists who are focused on the network, and the economists who are focused on the asset.  I'm not saying that one of them is right or wrong, I'm saying that they're divergent right now.

I'll give another example.  Some people are very happy that Bitcoin right now, the fees are low, and they're saying there might be a future where Bitcoin fees are always low, and because they're saying that mining might not really be security.  Maybe we only need mining to distribute the coins and maybe in the future, people will think Bitcoin is so valuable and the bitcoiners will be so rich that they'll just altruistically mine in the future.  And look, maybe that is the future state of Bitcoin, maybe that is what happens.  But that is not the reality future of the network that the developers are currently assuming today.  So, if we do think that, if that is what we do think, then we should just say that that is the future we're assuming, and we should try to engineer or optimise for that environment.

There's a lot of people who are working on technology solutions that don't assume that.  They assume that fees will be high, they assume that we will need to allow and build other top-level networks in order to make Bitcoin more usable for people, and those are the kinds of things they're working on, and they will likely need changes to the base-layer network to accommodate then.  So, that requires an environment in which we are discussing how to improve Bitcoin as a network, and improving Bitcoin as a network.

I think that the only thing I would say to people in the asset camp is that I think that some of these things we've encouraged is, we've encouraged this bias towards inaction, through evangelising for the asset in the way that we have, and describing it in the way we have.

Peter McCormack: But isn't this all playing out as it should, and do we actually need to worry right now?

Pete Rizzo: No, for sure.

Peter McCormack: I'm thinking, has the emissions schedule been designed in a way that we can make these decisions later down the line, as and when is required, and react to how it is used?  What's the size of the dollar value of the block reward right now?

Pete Rizzo: $250,000.

Peter McCormack: $250,000.  What was it four years ago, when we were at --

Pete Rizzo: Yeah, much less.

Peter McCormack: And so, when we go to 3.75 --

Pete Rizzo: But there's some very interesting criticism of this theory, in that the asset will just keep going up in value, and that will increase the dollar value of the subsidy.  So, Paul Sztorc, somebody who's a bit of a contrarian in the industry, who's been pushed aside, one of the models that he's been putting out is that, if you extrapolate Bitcoin doubling every cycle, there's still a point in which there isn't enough economic activity in the world to account for Bitcoin continuing to double.  I'm not saying that his criticism --

Peter McCormack: Sorry, just let me finish, because I know where you're going with this.  What I'm saying is, there are two aspects to that.  There is the block subsidy, which is going up or doubling; then there is the amount that's coming in in fees, which maybe is going up, is maybe representing a higher portion.

Pete Rizzo: Well, the fees are definitely not as high as they used to be, the fee revenue.

Peter McCormack: The total fee revenue, or the amount in terms of sats?

Pete Rizzo: I'm not 100% sure on that.

Peter McCormack: But the point being is, every four years, we're going to get a marker.  It may be in four years' time, it's 3.75 Bitcoin and it's $400,000 a block and $40,000 of that is fees, or $20,000.  But we're going to have a curve, we're essentially going to have a curve.  We're going to have a curve on block reward and we're going to have curve on fees.  It may be a case that fees never catch up, but it may be a case during that period, Rizzo, it isn't just El Salvador, it is Uruguay, El Salvador, Guatemala.

What I'm saying is that I think we're perhaps in a bootstrap mode, and that eventually we start to get to a critical mass where people are starting to settle.  I did not see a country adopting Bitcoin as legal tender as early as we did, it came as a surprise.  But what if next year, Saudi Arabia sells some of its oil in Bitcoin and they start selling that in Bitcoin?  What I'm saying is, you could be completely right, but we get to monitor this in real time, we get to monitor the block reward as well as the fees.  And do you know what?  It might change, you might be right.  We might get to a point where it never has enough economic activity and we have to plan for 2140 in a different way; or, it might be like so many people have moved onto this network, they are settling, we do have the economic activity.  But we don't have to make the decision now for something that might be 20, 40 years on.

Pete Rizzo: Right, well I'm not saying that we do have to make a decision now, and I'm not saying that we'll even have to make a decision in the interim, or even in the immediate future.  We might never live to see the conclusion of this.

Peter McCormack: We probably won't!

Pete Rizzo: Right, I think that's a likely outcome.

Peter McCormack: Well then, fuck them, as long as we get rich!

Pete Rizzo: Right, but I think that --

Peter McCormack: I'm joking.

Pete Rizzo: Again, I still think it's worth asking the question, especially at this time that we're levelling the criticism.  And I think that what's very clear is that there is a divergence on some of these things.  So, I think that you're correct, there are plenty of people who think the fee market will continue to build.  Great, it might, and we might need to react to that when it happens.  Great, but those are equally important conversations to have.

The ultimate end of each of those assumptions is not this current thinking where, to me at least, it's not this current thinking of, "Bitcoin is inevitable, we don't have to do anything to ensure its continuance".  We do and we should, and so that's I think the perspective that I think we've moved away from, and I think that it would be good to get back to.

Peter McCormack: I mean, I think every conversation should be had.  I think we should be aware of the questions we're asking and the answers we come to and the conclusions and the potential hypothesis of how this is solved, and you can continue to adapt.  It's not an issue now.  It could be in, not 4 years, maybe 16, maybe 32, but we will be aware of it when it is an issue, and probably likely ahead of time.

Pete Rizzo: Well, it's not just fees, right, it's also the attitude of building things on top of Bitcoin.

Peter McCormack: That's a different point where I'm with you.

Pete Rizzo: Those are kind of two separate things.  So I think, if you're going to say that there's a few differences, one is in the general attitude towards just how well we're doing; and the second is well, if you think that Bitcoin is just going to succeed without your action, why take any action, right.  This is the argument for the ossification of Bitcoin, "Let's not make any more changes to it, it's fine, it's working, and let's just stop that building process".  But obviously, I think that again, this gets to the essential schism where, and this is something that I'm asking a lot about lately, is how compatible is the Austrian sound money theory with the digital cash outlook, because they're different?

The sound money thesis of the Austrians requires Bitcoin to just be what it is today, potentially, as long as the network continues to operate under the assumptions.  The digital cash model is very different.  It assumes that we have fungibility, it assumes that we have anonymity, it assumes that we have the tools to use Bitcoin in a way that is free from the capture of the state, right.  That was something that was very much a concern of the cypherpunks who Satoshi built on.

So again, I think one of the things that I'm trying to assert through this model again is that we've leaned very heavily to this Austrian model, it seems that earlier we leaned heavily to this digital cash model.  Again, you can say that as Bitcoin users, we have the optionality to pick from these theories as we want, but right now we're currently very much trending towards this Austrian model.  And if that Austrian model is not correct, then we're going to have to evolve it back to something else, there needs to be some other way forward.

Peter McCormack: What does not correct mean?  Are you talking about the implications of what an Austrian model is, because what you can do is you can very much say a large part of the world is defined by the economic policies of major nations: expanding money supply, the ability to print as needed?  Some would argue the Keynesian model allows for governments to create a more stable society, provide maybe more jobs, maybe help those more disadvantaged.

Pete Rizzo: Well, I'll give you an example: the Canadian truckers.  So, I don't think bitcoiners are very happy with the conclusion of what occurred there.  We attempted to support a protest that we thought was meaningful and that illustrated our discontent with the state, and we tried to use Bitcoin to express that.  That ultimately didn't work, and it didn't work because of the limitations of the network.  Ultimately, the people that were using people in that situation were unable to use it in an effective way to achieve what they were trying to do, which was to spend money without it being censored or stopped.

Peter McCormack: I think it's more complicated than that.  I think it failed for two reasons.  I think there was a centralised issue with the person who was raising the money to support the truckers, and they ultimately became compromised.  I'm still sure people could have got money in a more decentralised way.  He became a central point of risk.  I think another reason it failed, which is an uncomfortable conversation for bitcoiners to have, is that within Canada, which is a democracy, this protest was not popular.  People seem to think because --

Pete Rizzo: Because we thought it was popular, it was popular, yeah.

Peter McCormack: Because we thought it was popular.  I mean, it fundamentally wasn't.  There were a lot of people against this protest.  Whether they were peaceful or not is irrelevant.  I know, because we made a show; I know all the emails that came in and said, "I can't get my mother to a hospital for an operation".  "I can't get my kids to school".  "All day, every day, all I'm hearing are horns beeping".

Sometimes you require civil disobedience and I fully understand that.  But if this had had widespread 70%, 80% support within Canada, I don't think it would have failed, I think you would have had more people on the streets supporting them.  You could have had an overthrow of the Trudeau Government, but it was a minority, therefore they were able to do things like censor people and close down their bank accounts, and that's an uncomfortable conversation for bitcoiners to have; nobody wants to have it, nobody wants to say that.

Pete Rizzo: For sure.  Your argument is what, that it was just so unpopular, so it failed?

Peter McCormack: No, what I'm saying is, I don't think the movement failed just because Bitcoin wasn't able to support them in the way you said.  I think it failed for multiple reasons, as a protest and a movement.

Pete Rizzo: I see what you're saying.  Look, I think ultimately, I'm not trying to suggest that there's some different path forward that would have solved it, I'm just saying that clearly there's a community demand -- to me, that represented community demand for the ability to use Bitcoin in a certain way that it just didn't seem like the current network supports.

Peter McCormack: The reason I bring this up, because it brings a wider, more uncomfortable conversation, is does everybody want to live on an Austrian hard money standard when they understand the implications of that?  There's certainly groups within Bitcoin who want to point at any ideas which are seen as socialist as bad, any collectivism as bad, any centralisation as bad.  But some of the safest, best places to live are western liberal democracies, which have the ability for the government to tax and redistribute, and also have the ability to provide services for those who are the most vulnerable in society.

Now, a hard money standard changes that.  We don't know the net outlook for that.  We don't know if that means we have a different kind of wealth distribution of haves and have-nots, where the have-nots rely on volunteers and donations and support groups, which aren't managed by the state.  We don't know if people will want to do that job; I know some will.  We don't know if it makes a different society where you have to protect yourself a bit more, you have to have weapons a bit more.  We just don't know the outlook and we don't know if people will want it.  Some people are like, "Yeah, the state's shit, but I'm happy to pay some tax".

Pete Rizzo: Well, I think one of the interesting conversations happening lately, and credit to Alex Gladstein for bringing this up, because I experienced this when I was in Lebanon, is that people are currently using stablecoins as a humanitarian tool; that's an argument that he made.  Obviously, people are using alternative cryptocurrencies to run those stablecoins.  That does not exist on Bitcoin today.

What I found when I was there, there were a couple of things that I thought were interesting.  If you were a bitcoiner in Lebanon right now, you're effectively de-banked, which means you need to be purchasing Tether in order to buy Bitcoin; you're effectively a Tether consumer, because you're there.  And some of the people there just want to acquire Tether, because they don't want the volatility of Bitcoin.  I literally got into a car attempting to sell Bitcoin to someone who would not accept my Bitcoin, and would not give me dollars, but only gave me Tether.  And he had a very high knowledge of Tether.  He understood that it could operate on Ethereum or Tron and he asked me that question.

So clearly, there's some utility to what you're talking about, as this idea that maybe Bitcoin isn't going to encompass everything, maybe some of these things could be built on top of Bitcoin; right now they're not, but they're also seemingly integral to the Bitcoin economy, because you're asking people to onboard to the Bitcoin system through some other means.  And I think it's interesting that -- to me, it would be very hard to advance that conversation today.  It feels like a climate in which trying to have the conversation that you're having, in which we might envision a future of leveraging Bitcoin as a platform in order to build other types of currencies, maybe state currencies on top of it, maybe things that look like Tether, while that is advantageous for certain use cases, I think that would be a very difficult conversation to have publicly today.  I think a lot of people would be very against that conversation.

Peter McCormack: They don't want that conversation, but there is a bigger reality to this, is that it was digital cash to begin with, and it has been adopted by the Austrian Economists, who believe in this standard.  There is a definite alignment between the Austrians and the libertarians, but Bitcoin is now universal, everyone's heard of it.  Tesla has it on the balance sheet, we do have a country that's adopted it, it is in the public eye with every major story.  Do we believe, as Bitcoin expands, that everybody coming into Bitcoin is going to suddenly become a libertarian?  Or, is it the case that we're going to have lefties come in, righties come in, moderates and centrists come in, and they're going to use Bitcoin or store Bitcoin or have it, but still want to live in a liberal western democracy, or in a democracy, and it's just an asset that sits alongside it? 

Again, these are things we don't know, but libertarianism hasn't ever succeeded as a -- we don't have a libertarian country.  That's not saying it couldn't happen, but we don't have it, and it isn't a popular ideology for how to govern society.  It is still a fringe idea.  I'm not saying it's a bad idea, for anyone listening, I'm just saying none of the libertarian political groups has ever really gained a huge amount of ground.

Pete Rizzo: Well I mean, look, just to comment on that, I'm traditionally more left-leaning, but I would say that modern libertarianism is definitely asserting itself in the United States right now currently, and I think that we might be at the beginning stages of seeing a larger resurgence to that.  Even Bitcoin in politics, Bitcoin is becoming a lot bigger conversation in politics.

Peter McCormack: But there are divergent camps in the libertarian community.  There are those who do not believe in the state, and then there are those who believe that you have to have political parties.  There is a libertarian party; Jo Jorgensen?

Pete Rizzo: Yeah, she'll be at Bitcoin 2022.

Peter McCormack: Yeah, it was what Nic Carter said, he said, "One of the issues with most libertarians is that it can only work if it acquires political capital, but it's an ideology based on not acquiring political capital".  I've always said, I think libertarians who have a platform for smaller government should be involved in politics, and then rather than focusing on the endgame of no state, just focus on wins, which is smaller state, better use of money, lower taxation, more freedoms.  Why is that such a bad thing?  Why does it have to be no government, self-sovereign, citadels and guns?  Why can't it be just a better state?

Pete Rizzo: Yeah, it's interesting.  I certainly like the argument that I'm trying to advance that has very little to do with politics, it's really just again, the Bitcoin Network has to continue to sustain itself.  Whatever you want to use it for, Bitcoin needs to ensure that it continues to operate, and it does operate differently from these other cryptocurrency networks.  So again, just broadening it out to this perspective, we as humans are trying to achieve things, we're trying to use technology.  Bitcoin is a technology, it has certain features, and we do have a say in that.  That is currently how Bitcoin is constructed.  If you run a node, you are able to kind of make decisions and make changes on the network, so I think some of this will play out and it will be interesting to see what happens. 

Ultimately, I think that who's to say in the future what will happen and whether Bitcoin will respond to that, and that response might include undoing a lot of the ideology that we're laying down today.  I think that the only thing that I can really say, and looking back at Bitcoin narratives as I said earlier, and kind of as a joke is, we know that Bitcoin is going up over time.  Other than that, I'm not really sure what we've learned at this point.

Peter McCormack: It sounds to me like the bigger point here then is that we need less groupthink, more uncomfortable conversations.

Pete Rizzo: Well, I think the idea that the contrarians and Bitcoin have been marginalised to the extent that they have, I think, is a bit alarming.

Peter McCormack: It totally happened.  We've witnessed it, I've witnessed it on other people.  If you step out of what is the general consensus of ideas relating to Bitcoin, altcoins, governance, politics, major global issues --

Pete Rizzo: But there are contradictions here that just seem really large to me.  So, a good example would be, if you think Tether is a humanitarian tool, but it's built on a shitcoin network, in your mind, how do those two ideas actually coexist?  You're admitting that something has value, and you're totally discrediting the thing that enables it.  So, there's a lot of these examples where, if you actually drill down into the specifics, you start to just find holes that really don't make any sense, just inconsistencies.  And I think that we just don't press on those enough, and some of them, the shitcoin one being probably the biggest one.

I have my own definition of that and why that is the case, why we use the word "shitcoin", but again the modern Bitcoin maximalism is very much a binary construct.  It's, "Bitcoin is the only decentralised cryptocurrency, because it has a finite money supply and a fixed monetary policy".  That is the definition, I think, of what a lot of people think decentralisation is.  The problem with that is the developers totally reject that definition.  That is not a reasonable definition of decentralisation, because you cannot apply that definition to other networking technologies.  The internet is clearly decentralised, but it is not decentralised because it has a monetary policy; the internet has nothing to do with that.

So, I think this is a thing where ideas and narratives can actually shape assumptions, and those assumptions can seep down into how we're building and how we think about building, and this is the thing that I'm watching right now and I'm thinking, "Okay, well that's really interesting.  You have this creation of this idea that decentralisation means this, and clearly it can't mean that!"  Clearly, that can't be the actual definition, because it doesn't actually apply to anything else, but it's useful, because we want to discredit all these other systems, we want to discredit them, and so it fits that binary.

I think one of the things about early Bitcoin maximalism is that it was technically correct in how it described decentralisation, but it was very difficult for people to understand, so it didn't scale well socially.  Modern Bitcoin maximalism has scaled very well socially, because it takes a very binary construct, "If you're not Bitcoin, it's not decentralised and it's a shitcoin", it's very easy for people to understand.  In actuality, the developers who are working on Bitcoin, they do agree that decentralisation is a spectrum.  There are people working on alternative cryptocurrencies who do say that, there are Bitcoin developers who will admit that, because in order to build things on top of Bitcoin, you need to build things that will be less decentralised.

Peter McCormack: Well, within the developer community within Bitcoin, I am yet to meet a hardened Bitcoin maximalist, those people who are working on Bitcoin Core.  I'm sure they exist, but actually you get some of the broader, more challenging conversations with them, the more openminded conversations, the understanding and appreciation of other cryptocurrencies, "What are they doing?  What can we learn from it?"

I tweeted this thing recently, I can't remember what the exact words were but, "How did we get to this place now where --", because Bitcoin maximalism isn't just monetary maximalism or platform maximalism, it's also got political, dietary, all these other forms of maximalism, and it's become a place whereby if you step out of that, you can be attacked, and I know this happens, because so many people email me and say, "I just want to discuss it here, I'm not going to put it on Twitter", because they're fed up of being shouted at, memed, insulted, abused. 

Other people go, "That's just people being mean on Twitter", yeah fine, we can all toughen up; it's still not fun.  And, in a cohort which celebrates liberty, censorship resistance, freedoms, to have such a cohort of groupthink that will try and destroy opinions that step outside of that, that's a contradiction.  We should be celebrating open discussions.

Pete Rizzo: Well, I think American HODL's answer to that to me is essentially, if you consider Bitcoin's main invention to be scarcity, because it is open source, it immediately was un-invented, because you could essentially just copy Bitcoin!  So, Bitcoin both invented something and un-invented it.  And one of the only ways that we've found to actually enforce the scarcity of Bitcoin is through this social consensus.

Peter McCormack: Yeah, but that hasn't worked, it hasn't happened.

Pete Rizzo: I think it's been a lot more successful than you think.

Peter McCormack: Honestly, we have more shitcoins than ever, we have more altcoins than ever, we have a reducing dominance and nobody has ever changed their mind from being shouted at.  It's like having children.  You learn very quickly, shouting and yelling at your children does fuck all; it just doesn't work!  The best way to parent is to lead by example, to show them, to give them the skills and the ability to learn from their mistakes.  I've got two kids, I still do it sometimes, I lose my shit and I shout at them.  It never works.

I don't think anyone in the history, or a very small amount in the history of Bitcoin have been shouted at about altcoins and they've gone, "Do you know what, you shouted at me, you're right".

Pete Rizzo: Just a funny example though, just to talk about information disparities, there are some altcoin communities that are larger Bitcoin holders than Michael Saylor and are far less celebrated!  So, I don't know, I mean again, these are things that I think we should question a bit more. 

But trying to go back to this general thesis, I think that Bitcoin really only needs to strive to some amount of economic liability; that's the one thing that we absolutely need above anything else, and I think the question then is, do these ideas and narratives help us get towards that?  If they do, I think they're valuable.  And then, if they're moving us away from that, then I think they are less valuable.  I think that would be how I would try to make a weighted judgement between these views.

Peter McCormack: What about a different way of looking at it?  Is Bitcoin maximalism itself fundamentally dead, or should it actually be called off?  Is it even useful anymore?

Pete Rizzo: Well again, I think that you have to look at it through what the utility is.  So today, the main differentiator between Bitcoin and the other cryptocurrencies is the monetary policy and the finite supply, and the fact that you, as a minority user within Bitcoin, are protected to a higher degree.  So, I think those are the real three differences.  And I think that rather than making strong arguments around those things and advancing and explaining those things, that to me is useful.  That is why I still consider myself in the Bitcoin maximalist camp, because I think it's worthwhile advancing those arguments and for us to continue to advance them.

But I think too often, we fall back on again this idea where we need to be verbally dismissive, or be angry with people.  For a good example, one of the things that started me down this whole train of trying to write this article was the defection of Udi Wertheimer, who I think has levelled a lot of criticism -- he's articulated his criticism very poorly in public.

Peter McCormack: He didn't used to, I think there's been like a yield curve on it.  We talked about this, didn't we?

Danny Knowles: With Udi on the show?

Peter McCormack: No, you and I were discussing, and sometimes I wonder with these characters, what's the information we don't know in the background?  Have they also made a bunch of money in altcoins and that's flipped their --

Pete Rizzo: That's such a weird thing.  I mean, there's so many people in this space who, again, the purity test is --

Peter McCormack: It's not a purity test, you're missing my point here.  What I'm saying is, Udi was great commentary, really good at challenging ideas around maximalism and would make me rethink.  What I'm saying is, there became a point where I think he went too far, and it became -- I think there was less thought and less ideas put into it, and what I'm saying is, has he also maybe been trading or made some money on them, and that's twisted his thinking?

Udi critical of Bitcoin as a Bitcoin maximalist is, I think, super useful, it was so useful; but something changed at one point.  And I'm a big fan of his.

Danny Knowles: I think some of that changed because of the ridiculous pushback he got as well.  I think it's a bit of a fuck you to the --

Peter McCormack: Maybe.

Pete Rizzo: Well, how I interpret that is essentially, or how I come to understand it is, I think Udi was an original Bitcoin maximalist.  I think he believed in that Bitcoin maximalism, in order for Bitcoin to succeed and outcompete all these other currencies, you would optimise Bitcoin's platform capabilities and then by doing that, you would assimilate these other features and these other markets.  And I think what Udi saw was an environment where that conversation was no longer happening, and he saw in other alternative cryptocurrencies, those markets were forming.

So, I think what Udi saw was essentially, "Hey, I was here in 2016 when we were going to build all these sidechains, that we were going to take all these features and move it on Bitcoin and we were going to outcompete these other alternative cryptocurrencies by unlocking Bitcoin's technical features".  I think what he saw was an environment where no one was willing to discuss that.  But I think, to be fair, I think that what I was able to do is, I don't think that Udi's reaction to that was necessarily right, because I do think that the definitions have changed and I think they have somewhat improved, to some extent.

You can look at what Udi said and say, "Okay, he's correct.  What we're doing now no longer matches this whole definition".  But I can't say if that's good or bad, I can only say that it doesn't match that vision.  I think he began to think that that was bad, because I think he was relying on a lot of these older assumptions of saying, "Okay, we need to bring these fees onto Bitcoin, we need to have fees be a certain level, we need to scale the blockchain in the future, and you guys are crazy.  You're not even using this old model that I have in my head, so I'm not going to continue engaging with you".

But I think that there was a legitimate criticism there saying, "Hey, we used to believe these things.  Why are you guys no longer talking about it?"  He tried to raise that conversation I don't think in a way that was very clearly verbally expressed, and the response that he found was a market in which that old ideology was no longer appealing to people.  I think that rebuff was kind of what pushed him out, because to him, that earlier thinking was still valid.

One of the other things that I'll mention is this idea of platform maximalism, this idea that in order to become economically viable, blockchains need to behave in a certain way.  That is still what the other cryptocurrencies -- that is their economic model, they haven't inherited that.  So, what I find very interesting here is you have these two competing economic models.  Bitcoin again has charted a very clear course, where it's doing something very different than the other cryptocurrencies. 

So, I can't say whether one is good or bad, all I can say is that Bitcoin originally had this definition of how it was going to succeed, it no longer follows that, but all these other cryptocurrencies do.  They view themselves as competing for transactions, trying to boost their fee market, and trying to ensure a future where their chains are economically viable.  And ultimately, they assume an environment where all blockchains are competing for transactions.

Bitcoin now fundamentally rejects that.  We no longer believe that Bitcoin has to compete in that way in the market, and that has been a schism that I think we should ask ourselves why we made that decision; what are the underlying assumptions that led us down that course; or did we even consciously go down that path?  I don't know, those are questions that I can't really even start to unpack right now.

Peter McCormack: I mean, one of things that we're talking about, or thinking about, is I started to think, I mentioned to you, should we move beyond Bitcoin maximalism?  I'm already thinking beyond that and I'll give you the reason why.  It's growing audience, growing number of people coming in, growing awareness, Bitcoin now is essentially mainstream.  Do we need every person who comes into Bitcoin to be thinking about what maximalism is, block subsidies, the thesis of where Bitcoin's going? 

Or, as we have hundreds of thousands, millions, tens of millions of people come in, do they need to go, "Bitcoin is money.  If I hold it, it can't be debased and I can store it in a wallet and it protects me in certain instances, and I can send it around in a censorship-resistant way", super-simple understanding of what it is and not worry about all this?  Do we really want tens of millions of people arguing about this; or are we past that?

Pete Rizzo: But they have to exist in -- this is the sort of front-of-house, back-of-house argument.  You give somebody a menu and they have to order food, and then the kitchen has to deliver the food, right.  And so, in this case, you're correct that Bitcoin is at a level where we've manufactured an argument that is cohesive and that people are buying into.  But again, that argument needs to have some relationship to the actual technology.

So, when I was here before, I made a joke that I never elaborated on, but when I sat down I said, "People think that Bitcoin is an inflation hedge; that's ridiculous", and we never talked about it.  But again, that sort of narrative where it's like, "Is that true?  Well, it clearly hasn't worked out in the short term, but it's clear that in hyperinflation areas that Bitcoin is not even really being widely used for that use case".

Peter McCormack: It's only an inflation hedge if it beats inflation for you.

Pete Rizzo: Right.  So, there's now the marketing department of Bitcoin and the backroom of developers out of sync.  The technology is operating in a way that the marketers in the front are not happy with.  We've seen this play out in Bitcoin before, and the answer is the marketing team is always disposable!  Because again, the technology only has to continue.  Bitcoin's one bias is that it needs to continue, and ultimately it needs to be economically viable into the future, post-subsidy. 

Everything else that you want to graft on Bitcoin might be our own human failings, and I just think that that's a message that I like to continue to bring out, because to me, I see the amount of confidence that we have in these narratives, I see that that confidence brings speculation about the current fiat system, and it bring speculation about what's going on in the alternative cryptocurrency world, and there's a lot of things, I think, that come from that confidence that don't seem very accurate.

Peter McCormack: I'm not sure there is, I think it's a false confidence.  I think it's a false confidence, because people don't like it being questioned, they just fundamentally don't.  Or, when you try and approach things, it's usually, "We'll figure that out in the future", which I know I just did, but maybe it's a false confidence.

Pete Rizzo: Well, I think ultimately, that tendency, I would explain, is that people who react that way tend to see Bitcoin as a pure, free market, economic system and they will just reject anything that is not a free market economic system, and they can't really make the argument that that's why they're pro-Bitcoin and not anything else.  But that's my interpretation of that argument.

What essentially they're saying is that, the way Bitcoin exists now, you really can't have a currency that operates in an entirely free market, where anyone in the world can do any position in this technology, where the barriers to entry are essentially unguarded, and we can only really have that once.  That's what they're saying, I think, when they say that.  But that's not the argument that we're making publicly.  So, if that is the argument that we believe, then maybe we should make that publicly.

Peter McCormack: Are we making that argument?

Pete Rizzo: I don't know.  I hear a lot of people talking about inflation, I hear a lot of people talking about the instability of the US dollar, I hear a lot of people talking about global macro instability, which is like, great, but who knows?  As you noted earlier, to me, economics does not seem like an incredibly exact science.

Peter McCormack: But it isn't.

Pete Rizzo: It's not.

Peter McCormack: It's schools of thought, and we've seen what happens with a gold standard, we've seen now what's happened in an MMT Keynesian model, and we're seeing the potential of what a Bitcoin model is, and maybe they're A/B tests.

Pete Rizzo: I just don't know if we've really seen a lot about what a Bitcoin standard would look like, because again, we're living in a way where we're arbitraging both systems.

Peter McCormack: Of course, yeah.

Pete Rizzo: We are unique within the spectrum of history, and if you assume a future Bitcoin standard, we have the ability to make any transaction in a way that's advantageous for us.  So again, going back to this idea that you can hold Bitcoin and save in Bitcoin and spend in fiat, everybody in Bitcoin is doing this.  There is nobody I know in Bitcoin who is spending Bitcoin all the time.

Peter McCormack: There's maybe one or two people in the world who are those weird case studies.

Pete Rizzo: Right, so you are now accepting an environment where you're actually using both systems to your economic advantage.  So, this becomes a weird question, because ultimately we cannot keep doing that, because Bitcoin will require that the network that supports the asset sees a certain amount of activity in order to ensure the continued operation of said asset, so there needs to be some equilibrium there.

Peter McCormack: But isn't this a transition of power?  I think about when I got my first mobile phone, I still had a landline phone in my house, and I still used them.  But over time, I used my landline less and I used my mobile more, and then I got to a point where I never used the landline and had my mobile more.  I don't even have a landline anymore.  I get my internet service provider to plug in.  There's a number, but I don't plug a phone in, I'm all on mobile.  Are we in that transitionary period?

Pete Rizzo: Quite possibly, yeah.

Peter McCormack: Yeah, we don't want to spend our Bitcoin, because it can go up, but I do occasionally spend a bit.  And maybe over time, as more accept and more people use Bitcoin, I start to spend it a bit more, because maybe it's gone up so much in value, I've got a lot.  And then, that redistribution happens, and then maybe, at some point, we don't just have a country that has Bitcoin as legal tender, it's a country that only has Bitcoin.  And that might be decades away, but is it just a transition of power?

Pete Rizzo: I think the interesting thing about that though, is even bitcoiners acknowledge that they make economically advantageous decisions.  So, there could potentially be a future where again, if Bitcoin fees are super-high in the future, and you know that you're biased towards economically advantageous behaviour, you have to be in a situation in the future where it's economically advantageous for you to use Bitcoin.  There has to be some point at which that occurs.

Peter McCormack: Or, not just economically advantageous, just the friction's different.  When I'm in El Zonte in El Salvador, I don't spend my Bitcoin because it's economically advantageous; I can just get off the plane, get in my taxi, go there and I know everyone accepts it, and I've already got some on my wallet, so I don't have to go to an ATM, I don't have to carry it.

Pete Rizzo: I would argue in that situation that Bitcoin is economically advantageous, because the utility of the network is supporting your ability to do that.

Peter McCormack: But it's not really an economically advantageous position because ultimately, probably in the majority of those transactions, I've lost out economically.

Pete Rizzo: Oh, I see, right.

Peter McCormack: It's more of a friction thing.  But there's also other scenarios, your Bitcoin's gone up so much in value, and it's not an economic decision, it's a time decision.  It's like, "Okay, I don't know how long I'm going to live for, I might die tomorrow, I might die in 30 years, but I've got this Bitcoin and I can do some cool stuff with it.  Fuck it, I'll spend a bit", economically not advantageous, but it's life joy advantageous, experience advantageous, really badly articulated there!

Pete Rizzo: Life joy advantageous?!

Peter McCormack: No, what I'm saying is, it's what I said to CK: the two scarce assets in my life are, well three, money broadly, but time and Bitcoin.  What's the point of waiting two decades to spend your Bitcoin when you might die in that period and you miss out on everything?  But you could go and have this holiday of a lifetime.  I've done it with my kids, we've been on a couple of holidays paid by Bitcoin.  Those memories are amazing.  Maybe it's like, "Okay, my Bitcoin's worth X, but I could have this house and we can live in this house as a family and it's a beautiful house and have a nice time".  I don't think every decision is made on an economic basis.

Pete Rizzo: Yeah, I was at Unconfiscatable a couple of weeks ago, and this gentleman by the name of Ugly OldGoat got on stage.

Peter McCormack: Did he have his thing?

Pete Rizzo: He had his goat mask on, and he gave a ten-minute short speech on why it's okay for you to spend your Bitcoin, that I don't know was greeted with any real enthusiasm, but it was a fantastic speech, and I applauded him for giving it.

Peter McCormack: But do people really use the hodl idea as a way to teach people a lesson, or is it propaganda to stop people spending, because they want their Bitcoin to go up in value?  I think people should spend their Bitcoin, if they want to.

Pete Rizzo: Well again, there needs to be transactions on Bitcoin in order for it to continue.  So, I did approach the Ugly OldGoat guy thereafter and we had an interesting conversation where he assumed that you would issue paper notes on Bitcoin in the future.  I was like, "Why would you do that, because that's bad for the network, it's actually not adding any value?"  If I give you a cash bill that's redeemable for Bitcoin, there's no network activity on that.  And again, ultimately we need to reach a state where Bitcoin needs to function.

So, just to bring it full circle, we need to get to this point where Bitcoin is economically viable and will continue.  So, maybe before we're leveraging criticisms against the state and its system, we should focus on our own.

Peter McCormack: Maybe we're just so super-early.  Maybe we're, what is it, what did he say?  0.001% of the people in the world have Bitcoin, but maybe when we get to 10%, there is a massive load of economic activity.  Maybe if we have oil contracts priced in Bitcoin, we start to have that.

Pete Rizzo: Perhaps, yeah.

Peter McCormack: Maybe it's about adapting.

Pete Rizzo: But I think some people are arguing that it's a self-correcting problem.  So, I think that Adam Back has said this, Saifedean has said this, has essentially said that, "We don't need to worry, this will just fix itself".  Okay, that's an interesting perspective, I would hope that you're correct about that.  If you are going to make the assertion that this will all work itself out, you seem to be betting a lot on that.

Peter McCormack: Do you know what I take from this, Rizzo?  I take more from this, the idea that we should question more, discuss more, debate more, have uncomfortable conversations, rather than the specifics of the conversation we've had.

Pete Rizzo: Yeah, well I'd like you to take away a couple of things: one, that Bitcoin does have this thing that it needs to achieve, regardless of your opinions about it; and it does need to reach the state in which it is economically viable for the network to continue.  It seemingly has to reach that point, and the definition of that, I think, is unclear to me.  People have a broad, diverse range of opinions on what that future state looks like. 

But I think if you walk that back, there are also meaningful divergencies in some other important things about how the network will evolve.  And I think if there's anything that can be taken away from this conversation, again it's that our approach to maximalism has changed, it likely will change.  I gave an example of how we used to think about Bitcoin maximalism.  We clearly have established that that's not a rational viewpoint, nobody believes that currently anymore. 

We've moved to this new model and we may find that there are issues with this new model, just as we found there were issues with this old model, because we might be moving through a history where we are simply building models and iterating them over time.  It might be that our narratives that we're saying now no longer fit this future model, and that also should be okay, but we need to be able to divorce ourselves from those narratives and learn when they are no longer useful. 

So, I think the other thing that I would like to point out is that, again, the association between Bitcoin and narratives is not absolute.  Bitcoin does want or need narratives.  It only needs to ensure that its incentives are aligned to continue.

Peter McCormack: I feel like this is an interview where Jeremy is sitting there with a question to ask.

Jeremy: Yeah, it's going back a bit, but if there is the potential to build more on Bitcoin as a platform, is there the potential where there's more economic activity coming from basically the opcode section, where you're able to build in second-layer functionality, than from UTXOs being passed around?

Pete Rizzo: Yeah, I think this is interesting, as we don't really know.  So, Lightning has alleviated fee demand.  Fee demand was higher prior to Lightning.  And Lightning, one of the interesting things about it is, while we often describe it as a payment network, you can also describe it as a fee arbitrage system; you can just delay settlement.  The question is, if Lightning delays settlement, how long can you delay settlement?  Can you delay settlement indefinitely?

So this future state, post-2140 Bitcoin, let's just use that as a lens, if you live in a world where you can delay settlement indefinitely, you never settle on the Bitcoin blockchain ever, when then the Bitcoin blockchain still needs to be economically viable.  So now, we're just creating a system where you never interact with this thing that needs to have your interaction; somebody needs to settle there eventually.  I don't know, these are questions that as we build these systems, these questions are going to get more complicated, because we don't know.

We think that building things on top of Bitcoin will add fee demand, but that might be an assumption that turns out not to be true.  With Bitcoin, we can only continue to make assumptions, and then continue to gather data, and then move forward.  I think the problem with that is, that process leads itself to narrative-building, and narrative-building is only good at giving you direction, but sometimes you have to change direction. 

So, I don't know, we might be at one of these inflexion points with our attitude towards stablecoins, because I think the humanitarian case for them is very clear.  It's clear that they exist on these other networks, and have existed for some period of time.  But again, I would say that, if you accept those two things, I think you would also acknowledge that having a conversation in which we're talking about building that back on Bitcoin would be very painful and there would be a lot of people who would not want to have that conversation.

Those people who don't want to have that conversation, what's their alternative?  You want people using Tron in Africa to store their US dollars; that's the world that you want them to live in?  I don't know.  We have to make choices, we have to make directions and again, narratives are something that can force you away from that.  And I think with this idea that we're venerating the asset, Bitcoin the asset, all I'm trying to say is that Bitcoin is an asset and a network.  It has to be both those things, it is both those things. 

We've done a lot to evangelise for the asset, and that's been very good, we've learned a lot about the asset.  But maybe we need to move away from that, maybe we need to deprioritise thinking about the asset.  Maybe it isn't going to be just, "Hey, there's 21 million of these things, you should buy them", maybe we will have to create systems of utility around that asset such that more people will use it.

Peter McCormack: For those listening, Jeremy is our camera guy, he's always here, and sometimes he has a question he wants to ask and he asks it when the interview's over!  But I just knew with this one, you'd be sitting there with something in your mind, and I wanted you to ask it.  Is there anything I've not asked you that you wish I had?

Pete Rizzo: My name's Pete Rizzo, I am Editor of Bitcoin Magazine and Kraken.  Usually I think, when you start an interview, it's nice to have an introduction.  So, nice to meet you and the audience.  If I've offended you, I'm sorry.  If you would like a deeper explanation of the work, you can go to Forbes where the article will be.  It's entitled, A Subtle Divergence in the Vision for Bitcoin's Future, it's meant to give a framework for you to potentially ask some of these questions about how Bitcoin will evolve, that you may or may not find useful or valuable.

Peter McCormack: I don't think you need an intro these days, that's why I didn't do it.

Pete Rizzo: Okay, that's good.

Peter McCormack: What I will say is that these are my favourite types of conversations.  The more uncomfortable they are, the more difficult the questions are, the more I want to have them.  I love the work you do, you know that, I've told you that.  You have an open invite on this show to come on whenever you want and talk about these difficult subjects.  I want to have it and I don't give a fuck if YouTube blows up and people are losing their shit, these are the conversations we should be having and we should have more of them, we can't just cheerlead.  So, keep doing it, keep crushing it, man, love it.

Pete Rizzo: Thanks.

Peter McCormack: Peace out, let's go and watch some football.