WBD522 Audio Transcription

Bitcoin Behind the Veil with Craig Warmke

Release date: Monday 4th July

Note: the following is a transcription of my interview with Craig Warmke. 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.

Craig Warmke is a philosopher and fellow at the Bitcoin Policy Institute. In this interview, we discuss the biases and pressures that distort opinions about Bitcoin, and a framework for enabling objective evaluation of Bitcoin’s value and risk to individuals and society.

“You can’t just sit in a hut and think that the technology that you built is inevitably going to take over the world. You actually have to do the hard work of convincing people and getting in front of the public. So you can have an effect on the public imagination. And so building is not enough… I think you have to build and teach”

— Craig Warmke

Interview Transcription

Peter McCormack: How are you doing, Craig?

Craig Warmke: Doing great, Peter.  Really happy to be here.

Peter McCormack: Well, we're really happy to have you on the show, appreciate you coming in for this.

Craig Warmke: Thanks.

Peter McCormack: It came as a big recommendation to us.

Craig Warmke: Well, I hope I don't disappoint!

Peter McCormack: I don't think you're going to and, as you know, about two hours ago, we changed what we want to talk to you about.

Craig Warmke: Okay.

Peter McCormack: We had all our research work done and then Danny just was reading something and found this article you'd written, Behind the Veil, about how you can have more of an objective evaluation of Bitcoin.  We both read it and were laughing, amazed and just blown away and said, "No, we've got to change this because this is what we've got to cover today". 

I think, before we start though, people might not know who you are, so it would be good if you can introduce yourself, explain who you are, your involvement in Bitcoin and what you've been doing with the Resistance Money.

Craig Warmke: Yeah, so I came into Bitcoin on my own, privately, in early 2018.  I was looking back at my Coinbase transactions to see when I bought, and I bought Bitcoin and a little Ethereum at the same time; am I allowed to say that?

Peter McCormack: You're allowed to say it.

Craig Warmke: I'm not having Ethereum anymore.

Peter McCormack: Early 2017?

Craig Warmke: Early 2018.

Peter McCormack: Oh, early 2018.

Craig Warmke: So, I bought it literally on the Ethereum top.

Peter McCormack: Was that about $230?

Craig Warmke: It was $1,300 or something.

Peter McCormack: Oh, that high.

Craig Warmke: Yeah, this was the first couple of weeks of 2018 as things were going down.

Peter McCormack: Oh yeah.

Craig Warmke: So, I was one of these casualties that you often hear about that they buy at the top and then hodl all the way down and then become like battle-hardened hodler.  But it was around the spring of 2018, after I just had a little bit of Bitcoin, I would like to investigate it a little bit more deeply and I read round the whitepaper and it blew me away.

So, I thought, "Well, this is something worth devoting my research time to", so I started writing and publishing papers, academic papers of Bitcoin, because I'm a philosophy professor at Northern Illinois University based out of DeKalb, Illinois, the birthplace of industrial barbed wire.  So, I've been writing ever since, and actually the time this episode comes out, I'll probably have tenure, so I can really let it fly today.

Peter McCormack: Okay, you can fucking let rip, man!

Craig Warmke: Yeah.  But not long after, I was presenting one of these papers of mine, this one's called What is Bitcoin?, in Pittsburgh, and Bradley Rettler was in the audience; he was there for the same conference.

Peter McCormack: Yeah, great guy.

Craig Warmke: He's awesome, and he was like, "I didn't know that you had an interest in Bitcoin", and I said, "Do you?", and so we talked about Bitcoin all weekend.  I'd already reconnected with Andrew Bailey; he was a philosopher at Yale in the US, and I knew that he had an interest in Bitcoin going way back.  So soon after, especially after COVID hit, we all agreed to start collaborating, and we have a website now called resistence.money where we deposit all of our podcast interviews, our blog posts, our academic articles.  I think we have a pretty good trail of proof of work now, and we're writing a book together.

Peter McCormack: Okay.  What's the book; can you say anything?

Craig Warmke: Yeah, the book is called Resistance Money, and we have a book contract with an academic press, Routledge; they've been supportive.  We're going to be writing it for the rest of the year and, hopefully, soon after, it won't be too long, we'll have a physical book that we can give people.

Peter McCormack: We'll have to get you on the show and talk about the book.

Craig Warmke: Yeah, I would love that, especially Andrew and Brad.

Peter McCormack: Well, neither of them have been on the show.  I think we've got Andrew booked, right?

Danny Knowles: Andrew's going to come on next time we're in the US I think, and I've spoken to Brad as well.

Peter McCormack: Yeah, we definitely want Brad; I don't know if I've met him in person but we've had interactions online.  I think Brad is great; I'd love to get him on the show.

Craig Warmke: They're so good and they are very clear communicators, they're honest about Bitcoin's trade-offs and they're just really smart.  I think what a lot of people don't know, and I'm talking about Andrew and Brad and Troy Cross, these are legitimate academics who are well-respected in their fields.  The odd thing is that we've all worked in the same little subfield of philosophy; it's kind of an interesting coincidence.  They're very good, and they've continued to do really good work for Bitcoin.

One interesting trivia about Troy Cross, so I teach at Northern Illinois, we have a terminal master's programme; it's kind of a springboard for people to go into top-ranked PhD programmes in philosophy.  I was a student in my very programme, so a lot of my current colleagues were my teachers at one point.  But when I was a student, I really looked up to Troy, because he also went to NIU and did the terminal master's programme and did really well.  So, I was like, "I want to do as well as Troy".  So, if you'd have told me then that I would, years later, be on a Bitcoin podcast talking about Troy's incredible contributions to Bitcoin, I would have just been so confused, you know, "What happened?"

Peter McCormack: Yeah, but dude, if you'd have said to me five years ago that, "In four years' time, you're going to be running a podcast and interviewing the president of a country", I'd have been like, "What the fuck are you on about; I'm a degenerate!"

Craig Warmke: Yeah, that's incredible.

Peter McCormack: Yeah.  So, we talked about this the other day and that the Bitcoin butterfly effect is quite strange; not only are we still early on price but we're still early in people establishing themselves, their role they play in the Bitcoin space.  The number of opportunities available for people brave enough to go out there and start talking about this while it's not mainstream popular yet is massive. 

Troy was great; when we had Troy in the show, well, it was in San Francisco a few months ago, he was new to me, and it was such a great conversation.  Since then, he's just flying, he's just off, and I think this new wave of philosophers coming in and talking about Bitcoin is super-useful, because there are big ideas that people are wrestling with.  One of the things that stood out most from your paper that we read today, which we will share in the show notes, was where you talked about not only do the detractors have a bias but the promoters also have a bias, and that's a super-important area we're going to get into.

I really like this because I don't want to just be a promoter of Bitcoin, sometimes I wrestle with this, owning Bitcoin, having a platform which promotes Bitcoin, but also this feeling I need to have detractors on and challenge, because we need to be fair.  I also have these mild worries about the unknown second- and third-order effects of Bitcoin, especially if it continues to rapidly remonetise the world.  There are various theories on what that means for the nation state, etc, and some ideas are good, well some ideas are positive, but there are also some ideas that might have a negative, and we don't know; I feel like a sense of responsibility for that.  So, when we were reading through your paper, I was like, "Ah, okay, this is a conversation we have to fucking have".  So, yeah, we'll get into it.

Craig Warmke: Yeah, let's have it.

Peter McCormack: We obviously, in this new interest in Bitcoin, one of the fascinating things is watching the attacks that are coming up, whether it's from the mainstream media or politicians or detractors; there are a lot of people who seem to want to attack Bitcoin, and the lens of why they attack Bitcoin is super-interesting.

I've rethought about it, literally in the last couple of hours after reading your paper, and I don't want to explain my conclusion until later on, but it certainly made a lot more sense after you'd written what you'd written.  So, us as bitcoiners, we're used to these attacks, people coming in and attacking Bitcoin.  I don't know if we've always got the best form of defence; sometimes we do.

For example, I just read a paper today that was Allen Farrington, Nic Carter along with Ross Stevens from NYDIG, and I was like, "That's a good piece of work", and there are lots of good pieces of work coming out like that.  When we see detractors on Twitter and people dogpiling, I sometimes feel like, which I'm part of, "Is that the right thing?"  What I think you've come out with is this framework, so do you want to give the background to why you built this framework?

Craig Warmke: Sure, that might be a long story!

Peter McCormack: Tell it, we've got time.

Craig Warmke: I created this meme a while back, it's a ladder, and on one end it's high prestige, but low information; on the other side of the ladder, the better side, it's low prestige, high Bitcoin information, and I think there are causal relationships between the two things on each end.  So on the high prestige side, people with high prestige, I think they have trouble putting themselves in the shoes of people who are less well-off, and also they continue to associate Bitcoin with the political views and behaviour of certain kinds of bitcoiners, and so it puts them off, so Bitcoin has a bit of a stink on it honestly.

Peter McCormack: Is that the libertarian side?

Craig Warmke: Yeah, the anarchists, libertarian, FU sort of Bitcoin side.  I think of it as the more like Ted Kaczynski side of Bitcoin.  Then, on the other end of the ladder, there's the low prestige.  There are two kinds of low prestige people that are interested in Bitcoin; one kind are the people who just have never had an opportunity to get the prestige, and that's not a bad thing, prestige is a neutral, amoral thing, but they get Bitcoin a lot more quickly, they learn a lot more than the high prestige people do.  Then, in addition, you have people who maybe once had prestige and they just don't care about it anymore, and that's one of the reasons why they're out to get Bitcoin, and they're willing to give the prestige up for Bitcoin, and I'm closer to that camp. 

When I started writing about Bitcoin in 2018, I really didn't care so much whether that would burn some bridges.  The reputational risk was worth it to me because I think Bitcoin's good.  So, I wanted to write a piece where we could help the people on the high prestige side, low information side, help put them in the shoes of the people that are lesser off. 

Secondly, I'd been increasingly inspired by the cypherpunks in the 1990s and what they went through, and I just draw inspiration not only from what they did but how they did it.  So, this is the long story!

Peter McCormack: That's fine.

Craig Warmke: Okay. 

Peter McCormack: It's a long-form podcast, so you make my job easier.

Craig Warmke: Okay, so let's start back in the 1950s then, so Truman created the NSA, and it was this --

Peter McCormack: Who did?

Craig Warmke: Harry Truman, the President.

Peter McCormack: Is that why the Truman Show was called the Truman Show?  Is that like an Easter egg?

Craig Warmke: That's a good question, I'm not sure.  It was this secret organisation; people didn't really know it existed for 20 years, people called it the No Such Agency, but they finally came out of the woodwork when academic cryptographers started to publish research, especially on public key cryptography, like Diffie-Hellman stuff.

So initially, the way that the government would try to clamp down on cryptography, they would look for academics and they'd say, "Look, you don't want to publish that, and in fact don't.  Come work for us; we'll use your academic research to actually make the country better and safer".  So, a lot of people did that, and public key cryptography had already been invented by a British guy, James Ellis, years before, but Diffie and Hellman, they kind of released this animal out into the wild and it changed the world.

Peter McCormack: You know Diffie's been on the show?

Craig Warmke: I've listened to it, yeah; it was great.

Peter McCormack: He's one of the most fascinating people I've interviewed.

Craig Warmke: What a legend!

Peter McCormack: I know, unbelievable.  Sometimes you do an interview and you feel like, "God, I am so lucky to be sat with you right now".

Craig Warmke: Yeah.  What's really interesting, there's this book called Crypto by Steven Levy; I don't know if you've read it.

Peter McCormack: No.

Craig Warmke: It's interesting because it was published in 2001 and the author didn't have the benefit of Bitcoin, and so the way he writes about the cryptographers and the cypherpunks, it's this pre-Bitcoin perspective that's so invaluable.  So, you get this perspective on these academics and activists that isn't tainted by the later price appreciation of Bitcoin and its success.  But then, as the government was unable to just use this kind of soft coercion to prevent cryptography from being released out in the wild, they increasingly relied on more draconian measures. 

By 1991, there's this Senate Bill called 266 and overnight, the Head of the Senate Judiciary Committee changed the text in the bill, and it sounds familiar, it's all the same stuff that we're doing through -- changed the text in the bill so that people who are producing communications protocols or equipment for communication protocols, they'd have to be able to offer the government the unencrypted plain text on request.  What that means is that isn't private at all because the companies themselves would have to have a trapdoor, a backdoor.  Guess who that was, the Head of the Senate Judiciary Committee?

Peter McCormack: Tell me.

Craig Warmke: The gentleman from Delaware, President Joseph R Biden.

Peter McCormack: I was about to say Biden!  I was like, "Who's old enough?"  There was Trump but he wasn't in politics; there's only Biden left!

Craig Warmke: Yeah, so it was Biden.  Probably good intentions, but enemy of the people at the same time, and he did it at the request of the FBI.  So, this is often how it happens; I think that politicians, they have good intentions but they really don't know what they're doing. 

So soon after that, there was the Clipper chip, which gave the government the backdoor, which is even worse.  So, how did the cypherpunks respond?  Well, they responded by making memes honestly, they made stickers that said, "Big brother inside" like, "We'll find Intel" motto, Intel Insight,  Phil Zimmermann rushed out PGP, Pretty Good Privacy private message protocol, and eventually John Gilmore made the Electronic Frontier Foundation.  So, they made their own institutions, they memed and they built; I think, really, we could boil down the response to two things, they built and they taught.

Peter McCormack: Cypherpunks write code.

Craig Warmke: Yeah, they write code and then they educate, and they did that in response to this unrelenting government pressure to dampen the strength of cryptography.  The government also tried to dampen the spread; so you can dampen the strength and also dampen the spread.  So, you can either weaken cryptography or you can try to confine it.

So, the way that the government tried to confine cryptography is via the International Arms and Trade Regulation code, where the government sought to control the import and export of cryptographic or privacy devices.  So what this meant is that cryptography, like public-key cryptography counted as a kind of war instrument!  So, the cypherpunks, they did two things in response to this kind of attempt, which I really respect and I find kind of hilarious; one is that cypherpunk, Phil Karn, made the laws look silly. 

So, there's this book called Applied Cryptography, it was published in 1994 by a guy named Bruce Schneier -- actually he signed this anti-crypto letter which is like, "Why is your name on there?"  Anyway, this letter that was recently signed also by people like Stephen Diehl and Nicholas Weaver, prominent nocoiners --

Peter McCormack: The 26.

Craig Warmke: Yeah, or 25 now.

Peter McCormack: Who pulled out?

Craig Warmke: I think Kelsey Hightower might have pulled out, so I'm told, in response to some persuasive argumentation by Alex Gladstein.

Peter McCormack: Okay, yeah.

Craig Warmke: Persuasive and diplomatic.

Peter McCormack: I think we can say it, because it's going to happen soon.  You can't tell anyone, but there is a -- or you might even know, you know. 

Craig Warmke: Yeah.

Peter McCormack: So hopefully, by the time this comes out otherwise it'll have to be edited out, we're having the counter letter. 

Craig Warmke: Yeah, there's going to be a very effective counter letter, yeah.

Peter McCormack: A reaction.

Craig Warmke: Yeah.  So, what Phil Karn did is that he showed that the law forbade exporting the book in digital form because it had a bunch of cryptographic algorithms.  So, law forbade exporting the book to other countries in digital form, but he was allowed to ship it overseas in the physical form, so like, "What gives?"  So, with efforts like this, the cypherpunks really I think captured the public imagination in order to show that some of these laws and some of the ways that government tries to impinge on our civil liberties, it's just silly. 

One of the other things that happened around this time is that the government, instead of just banning the export of cryptography, and they did this to companies like Microsoft and Netscape, they said, "Okay, you can allow people overseas to use cryptography, but it has to be super-weak".  So, they allowed people to use keys that consist of like 40 bits or something, which now is trivial to break; then it was less so, but still pretty trivial.

Peter McCormack: So, what's the fucking point?!

Craig Warmke: Yeah, what's the point?!  The cypherpunks really did this neat thing, so Tim May emailed people on the mailing list and said, "Let's crack it, okay; let's crack it and show people how silly this is".  Then Adam Back replied and said, "I've already started!"

So, what they did is that they took the trillion or so possibilities and apportioned it out so that people could search.  It's like the digital version of, in the physical world, looking for a child; you apportion up the space and say, "Okay, you search that way, I'll go this way", so that's what they did.  It didn't work for Microsoft because of this technical formality, but not too long after, they shifted their attention to Netscape and then they cracked it; the message they cracked was written by one Hal Finney.

So, you see a lot of the same people were would have been involved with Bitcoin were involved in this thing.  This is kind of an aside, but think about they just did there, it was kind of group cryptoanalysis.  They, together, in a kind of decentralised network, by trial and error, tried to find a solution to a mathematical puzzle that is relatively hard to find, but easy to verify.  What does that sound like to you?

Peter McCormack: Repeat that last bit. 

Craig Warmke: It's a puzzle.

Peter McCormack: It's mining.

Craig Warmke: It's mining, yeah.  So, you can't tell me that this kind of successful effort to embarrass the export law didn't have some sort of inspiration for Bitcoin mining.  One of the only differences is that they were trying to crack the private key; whereas, in Bitcoin mining, you're trying to solve for a hash, and a little bit different; hash is a one-way mathematical humpty-dumpty --

Peter McCormack: Yeah.  No, where my head is at, I'm getting lost thinking, so in this process, did they inadvertently discover some of the clues for creating Bitcoin?

Craig Warmke: I think so.  But in all of this, they were doing two things; they were building, then they were teaching.  So, the way that I draw inspiration from the way that they dealt with these kinds of unrelenting attempts from the government to impinge on civil liberties is, "Well, I don't really have the skills to build, but I can teach".  So what I would like to do then is write papers that can help people think through what Bitcoin is, what it's not, what the trade-offs are, at least why I overall think it's good.  This also motivates my involvement in the Bitcoin Policy Institute; so, this is the newly-founded organisation that's it's not an advocacy group --

Peter McCormack: It's education.

Craig Warmke: -- it's an education group, and it's needed because there's so much misinformation.  And there's so much misinformation I think because either there are people who want Bitcoin to fail --

Peter McCormack: Well, that would be disinformation.

Craig Warmke: Disinformation, sure, yeah.  Or there are people who just don't know enough yet.

Peter McCormack: Sometimes uninformed, sometimes malignant.

Craig Warmke: Yeah, I think that's right.  So, this Bitcoin Behind the Veil paper is an effort to try to reach the people who are not malicious. 

Peter McCormack: Because the malicious people will stay malicious.

Craig Warmke: The malicious people will stay malicious; I think that they're probably a lost cause.  I'm the sort of the people who holds out hope even for Judas, like maybe Judas will someday repent.

Peter McCormack: But you're referring to Elizabeth Warren here?!

Craig Warmke: No, I'm actually referring to the real, historical, 1st century Palestinian Jew.

Peter McCormack: I thought you meant Elizabeth Warren!

Craig Warmke: If I'm holding out hope for Judas, I hold out hope for Elizabeth Warren; how strongly?  Well, not very strongly, but I think there's hope for everyone, but I'm not going to count on it.  So, I'm going to focus my efforts, I think the efforts are best placed on the not yet totally informed people.

Peter McCormack: Who could be misled.

Craig Warmke: Who could be misled easily.

Peter McCormack: You see that.

Craig Warmke: Especially in the high prestige.

Peter McCormack: Yeah.  So, I saw that recently on Twitter, I see it a lot.  There was a thing yesterday, I put a tweet out and somebody agreed with me, someone disagreed and someone said, "Oh, he's got Bitcoin in his profile, ignore him", it's just one of those things already.  Or, you see the people repeating the same stuff that you see in the mainstream media and you're like, "You just don't know yet.  You've got no reason to be against this".  But it goes back to what happened in your paper, it's those who trust or want to be liked by those who misinform or repeat what they say.

Craig Warmke: Yeah, and this is really important, there's a lot of social pressure to be against Bitcoin.  So, my brother's also an academic philosopher.  He's written this great paper, not a paper, a book, there's also a paper, but really what people should read is the book, it's called Moral Grandstanding; so much of it applies to both people outside of the Bitcoin community and people inside it. 

So, moral grandstanding is the way that we try to appear morally respectable to other people.  So, if you're around other people who are bashing conservatives, they're like cavemen, they have backwards values, and then you're sitting there and you could be like in the in-group and get points, like social points, for joining in the condemnation.  So, that's moral grandstanding, it's the way that we try to appear morally respectable to the people that we respect.  So there are pressures, especially among the elites, so academics, people in the media, regulators, lawmakers.

Peter McCormack: All the people who spread shit.

Craig Warmke: All the people who spread this disinformation, there are social incentives to be anti-Bitcoin.  But to be fair, there are also social incentives within Bitcoin to say, in my opinion, a bunch of less compelling things.  So, bitcoiners try to win approval from other bitcoiners, and so we'll pile on people on Twitter, like what has happened with some people that we know, who they faced the Bitcoin mob.

Peter McCormack: Yeah, the ever-watching eye of the Bitcoin mob as well.

Craig Warmke: Yeah, so there are pressures for purity.

Peter McCormack: Yeah.

Craig Warmke: "I've only ever held Bitcoin" or, "I only hold Bitcoin". 

Peter McCormack: Which, by the way, I think it is bad for Bitcoin.

Craig Warmke: Yes.

Peter McCormack: Two reasons; the first one reason is I think we should be able to test our ideas.  I'm pretty sure every bitcoiner believes in free speech, so let's use speech to test our ideas; and secondly, I just think it's a bad look from the outside.

Craig Warmke: It is a bad look.  This goes back to what I said about Ted Kaczynski earlier.  What is a more compelling version of a bitcoiner, what would make you want to be not anti-Bitcoin?  If Dale Carnegie, How to Win Friends and Influence People guy, was going around talking about Bitcoin, or if Ted Kaczynski -- this is often what happens, people send these tweet bombs; I'm guilty too, I've done a bunch of tweet bombs, some of them kind of funny, but yeah, this happens. 

So, there are both social pressures for anti-bitcoiners or non-bitcoiners to be anti-Bitcoin, and there are also social pressures within Bitcoin to be virulently pro-Bitcoin.  So, we should be mindful of those things, just as we should be mindful of the cognitive biases we have.

Peter McCormack: But it's not just social pressures, it's economic incentives as well.

Craig Warmke: That's right, that's where cognitive biases come in, because everyone wants to pump their own bags, or at least this is a --

Peter McCormack: Or protect their bags.

Craig Warmke: Or protect.  So, this is a tendency, we should say.  It doesn't need to be activated but it's there and it's something that everyone has to be watchful of.  So here's the thing, I'm writing this paper with Will Luther; it's kind of the like the part two of the paper that we'll talk about. 

Peter McCormack: Okay, who's Will?

Craig Warmke: Will Luther; he's an economist.  He's an economist for the Bitcoin Policy Institute; you should have him on.

Peter McCormack: Is he on our radar?

Danny Knowles: He's not really, no.

Peter McCormack: Where's he based?

Craig Warmke: Florida.

Danny Knowles: Oh, I'm following him.

Peter McCormack: We're going to be there soon.  There you go, there's another one.

Craig Warmke: Yeah, he's great.

Peter McCormack: We're going to have everyone from the BPI.

Craig Warmke: I hope so.

Peter McCormack: Where's your brother based?

Craig Warmke: Bowling Green, Ohio.

Peter McCormack: Okay.

Craig Warmke: He has a bunch of very good podcasts I think you'd enjoy.  If you ask him, "How does this apply to Bitcoin?" boom, two hours.

Peter McCormack: Is he into Bitcoin?

Craig Warmke: He's supportive of me, so he knows stuff about Bitcoin, but he's not really active on Bitcoin Twitter and things.

Peter McCormack: Yeah, because we're always looking for new and interesting people to talk to who haven't been on the Bitcoin podcast, because there are like 7,000 Bitcoin podcasts now all recycling the same guests and topics, so to get new and interesting people, we'll put him on the list.

Craig Warmke: Yeah, I think you'd have fun with him.  He's a much better speaker and I think probably a better philosopher than I am and a really good --

Danny Knowles: Why didn't we get him this time?!

Craig Warmke: You got the wrong Warmke! 

Peter McCormack: I think you're just being humble.

Craig Warmke: So this is relevant, so we all agree that people who hold an asset should disclose that they hold it when they write an article about it in the media. 

Peter McCormack: Yeah.

Craig Warmke: Why?  Well, because we think that holding an asset might lead you to be unduly positive about it, and so readers deserve to know that you hold an asset when you write about it.  Now that I'm affiliated with the Bitcoin Policy Institute and I also write for Atomic Finance, I've signed conflict disclosure forms with my university; I have to disclose those things, and that's good, that's the right thing to do, to disclose these things, because there are signs that I might be cognitively biased.

Now, what about people who were knowledgeable about computer science and economics who heard about Bitcoin, wrote an anti-Bitcoin essay in 2010 or 2011, and they've been anti-Bitcoin since?  They're not holding an asset per se, but they're holding opportunity costs, sometimes orders of magnitude more than what any of us would hold in Bitcoin.  So, why is it that it's good for us to disclose and they get off the hook? 

Take Paul Krugman, first anti-Bitcoin blog post in 2011 or something.  If he had put $500 in Bitcoin at the time he wrote the article, multiple millions, okay.  So, shouldn't readers know that the opportunity cost for him has been many millions of dollars?  I think readers should know.

Peter McCormack: Same for Schiff, same for Nathaniel Popper, same for all these people.

Craig Warmke: Same for all these people.

Peter McCormack: You notice, over time, their articles or their attacks seem to become more cynical and more salty.

Craig Warmke: Yes.  There's a kind of snark that I find off-putting, even though I do some of this myself.

Peter McCormack: Of course, we'll all hypocrites.

Craig Warmke: Yeah, we're all hypocrites.  So, yeah, I think readers should be mindful of this kind of cognitive bias and are people who have these huge opportunity costs going to be convinced by anything I write?  Well, probably not.

Peter McCormack: No.  So we forget them, we discard them.

Craig Warmke: Yeah.  So we forget them and then we can give Bitcoin Behind the Veil to someone else.

Peter McCormack: Right, so we discard those with the cognitive bias and we discard those with the potential massive downside from Bitcoin adoption; they're the two groups we discard.

Craig Warmke: Yeah.

Peter McCormack: I am kind of moving forward to the conclusion, but it's fine.  I think what came out of this for me is that -- by the way, this highlighted every decision in society for me -- we should consider the net impact for all when making these decisions, but what ends up happening is the majority of the decision, power and influence comes from a very small group of people.

Craig Warmke: Absolutely.

Peter McCormack: They have a ripple effect to others. 

Craig Warmke: Yeah, that's right.

Peter McCormack: So, democracy is very skewed.

Craig Warmke: Yeah, the people who don't have power don't have the opportunity to enact their vision of what reality should be, very much so.

Peter McCormack: Or they have limited scope.

Craig Warmke: Yeah, absolutely.

Peter McCormack: Okay.  So, if we want to evaluate Bitcoin as objectively as possible, how do we overcome our bias?

Craig Warmke: So, let's get to it.

Peter McCormack: Yeah, let's get in on that.

Craig Warmke: So, we all agree that everyone on any side is liable or subject to cognitive bias, and the cognitive bias often comes from self-interest.  So, the shtick is to try to divorce yourself from your self-interest, and the idea is that you can imagine a situation, so this is a thought experiment, where you've taken a pill that has erased temporarily all your personal memories so you don't know who you are.  You don't know whether you're male or female, you don't whether you're rich or poor, where you live, there are just no personal facts that you remember.  But you do have your wits about you and you have at your disposal all this information and statistics about payment networks and how money works, banking, inflation and all this.

Then someone wakes you up in the dark, so you can't see your own skin, and says, "Hello, you've taken this pill and we have a choice for you, and the choice is whether or not you'd like one of these two worlds to be actual".  You don't know which one is actual, you don't know which one's the real world.  It's now your responsibility to make one or the other one actual, so one of these two worlds.  One world is our world, it's the actual world, you just don't know it behind this veil, and then the other world is one a lot like ours, but where Bitcoin will never be created for whatever reason.  The task is to decide which world you'd prefer to live in; that's it.

Peter McCormack: Simple.

Craig Warmke: Simple.  Which world would you prefer to live in in that kind of situation?  So, you don't have to import any moral theories, you don't have to import any of your own political views, definitely not mine.  I'm just saying, "Here's the framework, here's the choice, and maybe here's some data".  So here's first, the way that I think you should make the choice; and then second, we'll supplement that decision-making framework with some data. 

So, how do we make the choice?  So, if you're choosing which world to actualise and you don't know who you are, then the choice involves risk.

Peter McCormack: You don't know if you're Pete from Bedford, Senator Warren or some guy in Bangladesh.

Craig Warmke: Yeah, you could be a prince or you could be a pauper.  So, when we make decisions like this with risk under uncertainty, most people think that we should consult orthodox decision theory; it's a mathematical framework for how to make decisions like this.  And according to this framework, you are supposed to choose the option which maximises expected utility.  So, the idea would be that, in any choice, there's a probability of an outcome and there's a value for that outcome, like how good it would be.  Then, the expected value results mathematically from multiplying the probability by the value. 

So for example, I could play the lottery.  If I win, I could get $5 million, but that's a very unlikely outcome; or I could not play the lottery and save my money.  I think it turns out that the decision in this case, which maximises expected utility, for the most part, is to not play the lottery, because in the vast majority of possibilities, you're just wasting money on the lottery ticket.

So, this is how orthodox decision theory works, and we can tweak it a little bit so that people can import their own kind of risk function, which is something like a preference for risk.  So you can be risk-seeking, so you can ride a motorcycle, you think the enjoyment of riding a motorcycle is worth this extra small chance of dying in a horrible accident.

Peter McCormack: You don't ride a motorcycle.

Craig Warmke: No, I think it's unwise.  I think you should not have a risk function that's risk-seeking, or at least that risk-seeking.  Or you can be risk-averse, and I'm more risk-averse, so I would never ride a motorcycle, I don't vacation in Afghanistan, I don't --

Peter McCormack: Jump out of a plane.

Craig Warmke: Yeah, exactly.  So, everyone can bring their own risk function to the table, their own risk preference, and this is very much like a hand-wavy, heuristic.  Of course, we can't know or put a number on the utility or the happiness on every single person in the world, but this is the idea; this is a hand-wavy, heuristic way of thinking about it. 

So, every person has associated with them a kind of utility, a value; philosophers often call them utils.  So like, my life is pretty good, so maybe my overall life utility is 15 utils; maybe Adam Back's life is really, really good, so he has 30 utils; and maybe someone's who really not well-off, maybe they're homeless and they're really unhappy and desperate, maybe they have 5 utils or something.

Peter McCormack: Like Jeremy over there!

Craig Warmke: So one way to make the decision then is, "Okay, if I'm going to actualise one of these two worlds, I don't know which person I would be in either one of them, then what I should do is I should average out the utilities in each world and see which one would give me the most expected utility", and I think that's basically right, as long as we take account of the person's risk function; so that's the framework.

So now you're behind the veil, you don't know who you are, but you know roughly how to make the decision.  You have all this empirical data about what the world would be like if you lived in this world rather than that world, and how likely it would be you'd have a good or bad life.  So, now let's input some data.

Suppose what we know actually that in our world, and probably then the very similar world without Bitcoin, that there would be a substantial portion of the population that don't have access to a banking account.  This is probably around, according to I think 2017 data from the world banks, it's like one-tenth to one-twelfth of the population who don't have access to a banking account for bad reasons, like they distrust banks or they live too far from banks, and so on.  It's not just that they don't have enough money; Bitcoin will help those people.

So here's the question then: in either of these worlds, you'd have maybe like a 1 in 12 chance of not having a bank account, would you rather be in the world without a bank account, having no recourse to anything else, or you would rather live in a world without a bank account and have recourse to Bitcoin?  So, this is kind of like financial or economic or Russian roulette.

Peter McCormack: There's no downside in one world, but in this one, the world without, I either go into one world where there's a 1 in 12 chance I don't have access to a bank account but no upside to that, whereas the other one I have the chance.

Craig Warmke: You have a chance.

Peter McCormack: There's no downside.

Craig Warmke: Yeah.  So, you might that there are costs just associated with having something like Bitcoin.  So for example, in the world where there's Bitcoin, there's going to be stuff like ransomware.  Another cost, which is a real cost, is that certain kinds of financial intermediaries aren't going to make as much money.  But I think the idea is that, at least if we just zoom in on this one issue about banking, I think most relatively risk-averse people would choose to live in the world with something like Bitcoin.

Then you can just keep going down the line, so consider inflation.  So something like, I don't know, one-tenth of the world lives under runaway inflation, and this is terrible; we've kind of gotten a taste of this recently even among us.  

Peter McCormack: Well, I think right now, it's going to be way higher than one-tenth.

Craig Warmke: Yeah.

Peter McCormack: I thought the statistic in your paper was higher.

Danny Knowles: In the paper it was, one in eight live under double-digit inflation, but again it might have gone up.

Peter McCormack: But I also thought the number without banking was higher; I thought it was 30%.

Danny Knowles: No, that was 1 in 12.

Peter McCormack: That was 1 in 12, yeah.  I would have said now, CPI figures maybe, but if we say double-digit inflation is the runaway number, but I would say those numbers are fake and I would say nearly all of the world is now living under double-digit inflation.

Craig Warmke: Yeah, that seems right to me too, and some people have it worse.  There's a spectrum.

Peter McCormack: They have triple-digit!

Craig Warmke: Yeah, exactly.  So, would you rather live in a world with inflation, or would you rather live in a world with inflation but you have the chance to own an asset with a limited supply, a finite supply, a cap, and one that's desired partially for this reason?  Well, I think I know what I would choose; I would choose the one where I'd have recourse, where I'd have an escape hatch, so that I could put in store and save some of my money for the long term in a way that won't just melt away.  I think that most relatively risk-averse people would choose the same.

So, the idea in this paper is to go through these issues and ask, "Would you like the Bitcoin world or would you like to live in the non-Bitcoin world?"  People can bring their own moral theories, they can bring their own political theories and values, and they can bring their own risk function to the table, but I do think, if most people are suitably informed and honest with themselves, I think that they would want to have the extra help that Bitcoin offers. 

So, I was listening to a podcast not too long ago with Alyse Killeen, and she called Bitcoin, "Fintech for poor people"; that's brilliant.

Peter McCormack: That is brilliant.

Craig Warmke: I think that's exactly right and why I could make an argument like this, especially if you're relatively well off, in global terms.  Going through this kind of thought experiment can help you imagine yourself in someone else's shoes, because you look at the statistics.  What the framework is helpful for is that it doesn't actually tell you what to decide, it just says, if you input certain data, it will spit out a certain value about what you should choose.

There's so much compelling data about how the global poor could be helped by something like Bitcoin that I do think the truth is that Bitcoin is overall good, because partially most people would want to live in a world with it, because it would help them.

Peter McCormack: So, that's fine because they're those binary options, but I actually liked the bit in there where there's the risk analysis between who I could be and who I most likely would be. 

Craig Warmke: Yeah, good.  So this is where the expected value stuff comes in.  So there are just many, many more people who aren't wealthy than people that there are, and so I really do see the choice as a kind of economic Russian roulette; I think that most people would realise that they would more likely be someone who's not privileged, and so they'd like to have recourse in those kinds of situations.  So, I really do think that if you're a disinterested, honest, genuine outsider, that if you're familiar with this kind of framework, then yeah, you'd say, "Okay, yeah, I guess I don't really have much of a problem with Bitcoin, and I can even see why it's a good thing to have around".

Peter McCormack: It's a bit like those who are near the spigot right now don't tend to care -- well actually, probably anti-Bitcoin because it's a threat to them.  But if you put them in that scenario there's a 1 in 10 chance that you're going to be poor and not have access to banking, there's only a 1 in much higher number, like 1,000, whatever that number is to being close to the spigot, which one are you going to take?  Now, in the reality of the world they're in, they have no need to care; they're self-interested in staying near the spigot and fuck everyone else.

Craig Warmke: Sure.  So, I see the kind of decision framework or thought experiment as I've set it up as a way to build out Alex Gladstein's Check Your Privilege slogan.  So, what the thought experiment encourages you to do is to leave your privilege at the door and then you go in behind the veil, and then you conduct the equation more or less.

Peter McCormack: Well, it was really helpful to see that point where you said, "If you're a wealthy person, not all the time, but you're generally more likely to want to vote for less tax, and actually if you're a poor person, you're most likely to want to vote for more welfare, but if you are a poor person who wins the lottery, you suddenly might flip to want to vote for less tax".

Craig Warmke: Yeah, lotteries provide a nice insight into our self-interest, and the self-interest is strong.  It's not just that poor people favour policies that favour the poor and wealthy people favour policies that favour the wealthy, it's that even wealthy people, if they had been poor, would have favoured policies that favour the poor; and poor people, if they had been rich, in that situation would have favoured policies that favoured the rich.  So wherever your status goes your interest follows, and you want to protect that status.  

Lotteries are neat, because we sometimes see these overnight changes of status, and there have been some studies conducted on how this affects people's preferences about tax policies and things; and it's not surprising that, if you were previously poor and you win the lottery and now you're not poor anymore but extremely wealthy, that all of a sudden you would want to protect that wealth and not to have to fritter it away in taxes.

Peter McCormack: Also, there's another way to looking at these things though.  Joe Rogan's been very good at explaining how he grew up poor.  He's obviously now quite wealthy with his Spotify deal and success in his life, but he always says, "Look, I remember being poor and we relied on food stamps; it made a big difference to us", and I think that's why he still has those empathetic ideas around welfare and protecting poor people, and not everyone will do that.

Craig Warmke: That's coming a lot from the Joe Rogan of Bitcoin!

Peter McCormack: I thought we were the BBC of Bitcoin.

Craig Warmke: You can both at once!

Peter McCormack: Well, I'll take the BBC of Bitcoin.

Craig Warmke: Okay.

Peter McCormack: Okay, so when you have this framework, how do we actually use this?  What comes of this is is this moral imperative, and there's not only a moral imperative as an individual who is enacting or working on policy that affects millions, tens, if not hundreds of millions people domestically within your country, but there's this higher moral imperative within the USA whereby, if the US bans Bitcoin, it's going to be a lot easier for other countries to ban Bitcoin.  

If the US highly regulated it or was against it, anything to harm Bitcoin, I think that has a trickle-down effect to other countries, not all, we know El Salvador is doing the same thing, but generally speaking it does.  So, there is that trickle-down beyond the United States to the real Third World, developing countries, people who don't have access to technologies, and that moral imperative I think is quite important.

Craig Warmke: Yeah, I think so.  So, I do think Bitcoin's an overall good.  Now, if that's true and I'm right about that, then yeah, it would be quite bad.  Now, there are different kinds of bans.  So earlier, we talked about what the cypherpunks went through with cryptography, where the government was trying to limit two things: both the strength of the thing; and then the spread of the thing.  So I'm giving away the playbook, but the government could do the same thing with Bitcoin.

Peter McCormack: Yeah, the things I've heard is they're never going to outright ban it, what they're going to do is make it difficult to use.

Craig Warmke: Yes, and so how would they limit the strength of Bitcoin?  I think one way to do that would be to make it really hard or illegal to custody it in a self-sovereign way.

Peter McCormack: Which they've talked about in Europe.

Craig Warmke: Yeah, so it wouldn't surprise me, in places with weaker protections, that this would happen, and the way to limit the spread of Bitcoin, well I think the government will have learned its lesson in trying to prevent its spread.  I think they know now that it's out of the bag, the internet just makes this impossible to prevent the spread.  So they would have to limit the spread in another way, a less coercive way, and so I think this is where CBDCs come in.  So, they would try to offer something that people would want that's maybe even more convenient.

Peter McCormack: Like Britcoin, which Rishi Sunak in the UK has pushed, and they've often tricked people into thinking this is very similar to Bitcoin, but the government runs it. 

Craig Warmke: Yeah, so it's centralised --

Peter McCormack: Bullshit.

Craig Warmke: Yeah, and not private.

Peter McCormack: No.

Craig Warmke: And you're not self-sovereign, yeah.

Peter McCormack: So how do we use this framework, because obviously you've created it for a reason?  Me and Danny, in this reading this, has really shifted our own thinking and understanding personal bias, skin in the game and decision-making.  How do we, as a group of bitcoiners, use this to help spread Bitcoin?

Craig Warmke: Yeah, well I think one way to think about it is that this provides intellectual infrastructure to arguments that people already make, like Alex Gladstein, and that's one way of fulfilling the teaching version of the building and teaching dual cypherpunk strategy.  I think, if people see that there's a kind of intellectual infrastructure in this way with serious philosophical ideas behind it, then they'd be more likely, in some cases, to listen to Alex Gladstein, and that is one of my goals.

So, I'm not referring to myself when I say that there's serious philosophical background here to the argument.  So, the argument is it basically cribs from this political philosopher named John Hosseini.  He offered a kind of behind the veil argument about which policies we should adopt, and this is his framework, mathematical framework. 

So, it's different than the John Rawls framework; there's all kinds of baggage to the Rawls framework, where you want to not just maximise expected utility but you want to choose the option which makes the worst swell off the best, it's called the minimax rule.  So the Hosseini version has no such baggage, it's just extremely personal, what's your attitude about risk, input the data that we all have access to, and then which world would you like to live in? 

So, I think if people are curious about the Gladstein-style argument or they find it unconvincing, I think if they find a mathematical version of it or a mathematical model of it, they might say, "Oh, actually, this is kind of serious".  I think that this is really important more generally for Bitcoin as it matures.  We don't need just things like the Bitcoin Policy Institute, we also need bigger or better-funded institutions.  So, I've been reading a lot lately about how to build or redeem institutions --

Peter McCormack: Do you let them collapse and rebuild?

Craig Warmke: Yeah, exactly.

Peter McCormack: Yeah, which is what we're heading towards anyway.

Craig Warmke: It seems so, which is part of Bitcoin's appeal, but I think when it comes to universities, well it's a mixed bag.  So, do universities still do a lot of good?  Yeah, of course, especially physics departments, computer science departments.  Could the humanities be a net drag on society; shall we defund them?  Maybe.

Peter McCormack: Right, so it's the battle of the objective versus the subjective parts of science.

Craig Warmke: Yeah.  So I think that, whether we build new institutions or try to redeem the old ones, we do have to admit that a lot of the people that we're trying to convince, the currency that they speak in is prestige, and credentials from institutions that they trust.  So, one way to build intellectual infrastructure around Bitcoin is to do things like build centres devoted to research on Bitcoin.  But if that were to happen, then we could build a lot more intellectual infrastructure and I think, as Bitcoin matures, this is probably inevitable.

Peter McCormack: Well, it's happening anyway. 

Craig Warmke: Yeah.

Peter McCormack: I think one of the earliest examples was the Nakamoto Institute.

Craig Warmke: Yeah, it's an amazing resource.

Peter McCormack: Really amazing resource.

Craig Warmke: I use it all the time.

Peter McCormack: Yeah, and I worry it passes a lot of people by who are new to Bitcoin, because Pierre Rochard and Michael Goldstein are less visible these days.  I think the path to Bitcoin and the tentacles and rabbit holes you can follow maybe don't take you to that, whereas when the community was smaller, most people would go to that, or a lot of people would go to that.  But we do have more resources now; the Bitcoin Policy Institute is one of those, Alex Gladstein and his relentless writing, which I don't know how he does, and we also have a wider pool of thinkers, diverse group of thinkers as well.

Craig Warmke: Yeah, more than the virulent anti-Bitcoin people would expect.

Peter McCormack: Also it makes it challenging from within Bitcoin, because the diversity of thinking is producing ideas that conflict with each other with regard to what Bitcoin is and who it serves and what it's for. 

Craig Warmke: Yes, very much.

Peter McCormack: I think the original more kind of anarchist thinking is being challenged by people who aren't anarchists. 

Craig Warmke: Yeah, I agree.

Peter McCormack: But conversely, those people who come to Bitcoin who aren't anarchists are seeing ideas with regard to anarchism and they're learning new things as well, so there's this mesh of ideas.

Craig Warmke: Yes, and that's good.  It's good because it's always good to push on people's beliefs to see what gives, and it's good to have viewpoint diversity so that there are discussions about what's reasonable to believe and which values we should hold.  I think that this very much ties into an early Hal Finney post.

Peter McCormack: A lot of those keep coming out recently.

Craig Warmke: Yeah.

Peter McCormack: The two that I've seen recently are where, one, he talked very early on about dollar cost averaging,; it came out the other day; and there was another one very early on, he said, "I wonder what Bitcoin mining can do for the environment", or something along the lines.

Craig Warmke: Yeah, and he also has one on NFTs and just the foresight on this guy, he's just so incredible.  He has this essay, I think it's called Politics and Technology; I'm not sure if that's right, but he says, "No shortcuts".  What's he mean by no shortcuts?  He means you actually have to go out and convince people, you can't just sit in a hut and think that the technology that you've built is inevitably going to take over the world.  You actually have to do the hard work of convincing people and getting in front of the public so that you can have an effect on the public imagination.  So, building is not enough, I don't think it's enough, I think you have to build and teach.

Peter McCormack: Which is coming full circle back.

Craig Warmke: Yeah.

Peter McCormack: If you can't build, then certainly teach.

Craig Warmke: Yeah, or do something.

Peter McCormack: Or present people who can teach to the world.

Craig Warmke: Yeah.  In all this, you just hope that you're not doing more damage than good, but they haven't.

Peter McCormack: But there are unknowns on that.  One of the questions I wanted to put to you is, how were you able to eliminate your own Bitcoin bias in creating your framework and model?

Craig Warmke: Oh, that's so funny; I definitely didn't. 

Peter McCormack: Can I tell you when I questioned it?

Craig Warmke: Yeah.

Peter McCormack: It was the end where you got to your criticisms and you didn't flesh them out.  You said, "There isn't data", and I was like, "Ah, I think I could have fleshed them out".

Craig Warmke: So, I could have fleshed them out more, and I also could have come up with more that I hadn't thought of at the time, and that's another way that our own bias eludes us.

Peter McCormack: But that wasn't so important because, when you worked the framework, you only covered banking and inflation, and you said, "There are these other ones".  You didn't need to do them all, but I almost wanted to see the reverse.

Craig Warmke: For sure, yeah.  The reverse ones that I just had in mind, so for example, a few minutes ago I mentioned ransomware; that's not in the essay and that's because it just wasn't in front of my mind.  I, myself, dismiss it as a relatively unserious concern, and so it didn't even come before my mind as something that needed to be addressed.  But of course, if you're anti-Bitcoin or on the fence, this is one of the things that you'd consider.

So, I don't think that I'm immune to bias, and in fact one of my main regrets about the essay is that, the end, I use some pretty strong language about people who just don't get it.  So, I say that people are like --

Peter McCormack: "Are dumb, they're detached and they're dishonest".

Craig Warmke: Yes, I wish wouldn't have reached for the "dumb", because even after this essay came out, that triggered some people and I thought that's unnecessarily triggering, unnecessarily inflammatory, yeah.

Peter McCormack: I thought this is going to be your Clint Eastwood movie!

Craig Warmke: It's funny.

Peter McCormack: So, when you're working the framework, you can pick something like banking or inflation, say, "Do you want to live in World A or World B?" really do you need everything?

Craig Warmke: You need everything to successfully do it, and that's why it's impossible.  So you'd need data about not just banking and inflation and all the other things that I mentioned that I think tend to push the needle towards being pro-Bitcoin, but all kinds of things that push the needle the other way.  So these are what I think of as the Four Horsemen of the Cryptocalypse: drug dealers, kidnappers, child pornographers and terrorists.  All of these groups of people, and the people who do ransomware -- I think eventually, honestly, evading sanctions, once Bitcoin is big enough, I think in the future, Bitcoin could be used to evade sanctions. 

Peter McCormack: But some people would see that as a positive, because sanctions punish the wrong people.

Craig Warmke: Yeah, so it could be good, it could be bad, but is evading sanctions a possibility in the far future?  Of course, it's not impossible; what makes evading sanctions impossible now is that Bitcoin isn't big enough.  So when a Russian oligarch tries to evade sanctions, he's trying to put a whale in the bathtub, it's like, "Oh, well there it is!"  But what happens when Bitcoin is like the ocean?  Well, there are lots of whales in the ocean. 

There are always going to be trade-offs and I think we just have to be honest about them.  I think the arguments point in favour of Bitcoin, but ultimately, especially as a philosopher, I think of myself as a truth maximalist.  That doesn't mean that I feel like I have a monopoly on the truth, but that's my goal, to just get to the truth. 

It just so happens that my goal of getting to the truth, in this case, overlaps with what I think Bitcoin is and what it could be and why it's good, so that's why I do as much as I can to try to sift out this kind of disinformation.  But if we're doing this and we're being honest, we can gain creditability with disinterested parties about mentioning some of the possibly negative consequences that Bitcoin might have in the future.  You mentioned earlier these unknown second- and third- order effects, and I worry about that too.

Peter McCormack: I want to talk about that, but I just wanted to finish on one point, it's what I took from the model.  I didn't take from it that everyone should go behind the veil and run through the model and make their decision; what I took from it is that it helped me understand how different people make decisions and the influence on them.

Craig Warmke: I see.

Peter McCormack: So, it's not just that there's the social layer and there's the economic layer for why people make decisions.  Look, I know Elizabeth Warren is a fucking moron, and I know she probably doesn't understand what she's talking about, people are telling her what to say, she's politically motivated and I know a lot of politicians are probably power motivated.  I also know a lot of people, rich people and bankers who are probably, economically -- I know all that exists, but to be able to give a reason why that exists in terms of their decision-making is helpful. 

Also, it was really helpful for me to then look at myself and it made me want to spend more time on these negatives and actually say, "We need to talk about this a bit more".  I've always felt like we're in this place right now where I still think the world is relatively a safe place compared to history, or we're in economic unstable times though, which is dangerous. 

We see this future world, some number of decades, whatever, down the line where it could be a Bitcoin world, and we believe that will be a better world.  But the journey from one to the other could be fucking horrendous; it could be bloody, dangerous, everything.  There's a complete shift in how money works, how things are priced that could have all these unknown effects, and they make me nervous.

Craig Warmke: Yeah, and I think it's really valuable to work on Bitcoin's trade-offs with the focus on its potential negative consequences, because if you do, you can address them.  This is one reason why I respect Bitcoin developers so much is that they have this adversarial mindset like, "How could this be attacked?  Where are the weaknesses?" 

So, a goal somewhat is to find a bug, and what is that?  That's looking for something negative in something, and I think we should do the same with the potential social and economic consequences of Bitcoin.  We can only benefit from just uncovering the truth.  I don't think there's much value is just being Bitcoin partisans and just trying to win for winning's sake and to pump our bags.

Peter McCormack: Well yeah, look, I am convinced Bitcoin is better for the world, but it depends on everyone's measurement, but I don't know if it ends up taking us to a net better or net worse place.  I think it takes us to a net better place, that's why I support it, but if it doesn't, I've played this little, small role in taking us to this worse place.  So, it's really important for me, as we go on this journey, to at least understand the potential and what that means.

Some people are more anarchists and they believe the government is bad at redistributing money and they think tax is theft and think all governments are evil.  I'm more of a supporter of democracy, would like much smaller government, but I don't mind paying tax, and I'm happy that there are programmes in place to help people who are worse off. 

Having travelled to the world from the relative safety of the UK to places which are dysfunctional and seeing people crack through the system in two different places, I'm glad I live in a place where we have protections in place, and I respect other people's opinions.  In a Bitcoin world, that might break down; I don't know if that takes us to a place where, because we're paying less tax and we've eroded the state, we are more generous and help others, or it takes us to a place where we're more selfish, we don't give a fuck and there are people who have fallen between the system, there's no protection and that leads to higher crime, I don't know.

Craig Warmke: Yeah, there are these path-dependant contingencies and it's impossible to know beforehand, and we can only do the best we can with the limited information we have and the limited brainpower we have.  So first, let me try to make you feel better.

Peter McCormack: Okay, thank you.  I don't feel too bad.

Craig Warmke: Okay, good.  So this, what I'm talking about is, is a hyperbitcoinised world; I still lean towards thinking that this is unlikely.

Peter McCormack: So unlikely to happen?

Craig Warmke: I think it's unlikely to happen in our lifetimes.  Am I saying determinately no, can you dunk on me and timestamp my saying this and then show me I'm wrong in ten years, "Look at me, fine"?  It's just a probabilistic judgement.  So, I think that hyperbitcoinisation is unlikely.

Peter McCormack: By the way, just as you go in there, do you find the timestamps of opinions on Twitter are virtue signal and are slightly coercive?

Craig Warmke: Yeah, sometimes.

Peter McCormack: In that, fuck, if I'm trying to express a controversial opinion, I'm going to get timestamped and that person -- the timestamp in itself is them saying, "You're a fucking idiot; why did you write that?"

Craig Warmke: "I'm going to embarrass you in two years".

Peter McCormack: Yeah, "Fuck you, you idiot", and then you're like, "Shit, I might not do that again".

Craig Warmke: Yeah, I've never done the tweetstamp thing I think, partly just because I'm afraid that, once I do it, I will have picked the one that doesn't work, like a defunct one or something.

Peter McCormack: I got tweetstamped by Gigi this week for saying, "I don't think Monero's a scam", so I tweetstamped his tweetstamp, and then I retweeted his tweetstamp because I was like, "Fuck this".

Craig Warmke: A great amplify, the winning move.

Peter McCormack: Yeah.  It's okay to be wrong.

Craig Warmke: Well first, it's okay to wrong and also we're going to have different probability assessments about the future, and it's okay to disagree about that.  So I think that, well first, I agree with you; Monero's not a scam.  I think that there are lots of scams, but not everything is a scam, and I think we lose credibility when we call everything a scam; it's like the boy crying wolf kind of situation.  In addition, I think that it's more likely than not that we're going to have fiat currencies for a very long time. 

When I talk to even Bitcoin-friendly economists, they think that hyperbitcoinisation is so unlikely because of the dollar's network effects; I think they have a major point.  We tout network effects all the time in order to argue for Bitcoin against these other cryptocurrencies and crypto assets, and I think that's a compelling argument.  Network effects matter, so why wouldn't it matter for the dollar too?  People want the dollar.

Peter McCormack: I think its network effects and network threats are two things it has.

Craig Warmke: Sure, that's true.

Peter McCormack: Interesting conversation we had with Preston Pysh the other day, he said the two currencies that are going to matter are Bitcoin and the dollar.

Craig Warmke: Yes.

Peter McCormack: So the two will have this probably symbiotic network effect.

Craig Warmke: I agree, symbiotic; you have spending and saving, so it'll be like the future version of chequing and savings I think, very much so.  People want stablecoins, I don't think we should tell poor people to put everything into Bitcoin.

Peter McCormack: I literally tweeted about this the other day. 

Craig Warmke: Did you?

Peter McCormack: I said it's completely irresponsible.

Craig Warmke: It's irresponsible.

Peter McCormack: Yeah, Bitcoin does not solve -- and it's this thing where it goes back to Gladstein, where I felt challenged by calling platforms shitcoins and being against them, and Alex explaining the importance of stablecoins in certain jurisdictions.  It's like, how do we square that circle?  I think the platform's junk, especially something like TRON; at the same time, that's a very important platform with people in certain parts of Africa who want Tethers, and there were people, bitcoiners from Venezuela and Argentina saying, "Yes, this is important", there are certain bitcoiners going, "No, we should just teach this".

Craig Warmke: Yeah, and that's an instance where they themselves aren't listening to the global poor.  I hate to check your privilege thing when it's applied in more woke circumstances, like in academia; I'm fine with it when Alex says it, but the very same thing applies to bitcoiners who are strongly anti-stablecoin.  Clearly there's a use for it, clearly people want it, clearly it's good because of Bitcoin's volatility; maybe someday Bitcoin will be less volatile. 

I think Bitcoin will always be somewhat volatile, so there will also be a use case for a less volatile monetary asset, and which asset has the best network effects?  That's the US dollar, and if that's right then you're going to have this exactly symbiotic relationship between the dollar and Bitcoin.  It'll make so much sense to me.

Peter McCormack: We have an internal meme for those people who haven't been able to put themselves in the shoes of other people; we refer to the Swedish libertarian.

Craig Warmke: That's great.

Peter McCormack: I think there's going to be a clash between the zealots and the philosophers. 

Craig Warmke: Yeah.

Peter McCormack: They're going to burn you at the stake for challenging the…

Craig Warmke: Well, they've already come at Troy pretty strongly for his ideas about Bitcoin's energy consumption, and it won't surprise me if they come after me and call me a statist or a fan of Cuckbucks or scammer or something, but that's okay.

Peter McCormack: They come after me all the fucking time.

Craig Warmke: Yeah, and also it's just a little bit ironic that they would do that against the best interests of Bitcoin.  So, it's not even productive for them to do this; it's counterproductive.

Peter McCormack: From our previous interview, I have a challenge to the anarchists with regards to energy in that, if you don't want a state, you can't have an energy grid, because an energy grid has to be a monopoly.

Craig Warmke: Yeah, that's pretty good. 

Peter McCormack: I think there are lots of examples of that.

Craig Warmke: There are lots of examples.  This is why I could never be a libertarian or an anarchist.  As soon as you get rid of the state, you're going to need all the kinds of things that you just got rid of, and you're going to have to crowdfund for them and you've got to have people in charge of them, roads ‑-

Peter McCormack: Don't start with the roads!

Craig Warmke: Okay, sorry!  Okay, well let's take donations for vehicular pathways, now we have taxes and roads.

Peter McCormack: I actually think, God, I'm probably boring myself just saying this, I agree with the libertarians on so much, I just think there needs to be more of a political wing for libertarians.  Imagine there was a third party in the US which was the Libertarian Party, that was the kind of escape valve for people who felt trapped, and then they have some political clout, some of their ideas about a smaller state, separation of money, financial governance, that would be useful.

Craig Warmke: Yeah, so useful.

Peter McCormack: We just have left to right in an organism that just grows and rent-seeks and takes more from everyone else.  But if we had something that pulled down on that, I'd vote for that.

Craig Warmke: Yeah, that's true.  So, one of my favourite philosophers is a 17th century philosopher, named Gottfried Leibniz; he created or discovered calculus and was just amazing, like a once in a millennium sort of mind, and he had some strange views.  So, he thought that everything is ultimately mental, so basically that we kind of live in the matrix, but if you unplug, it's just like souls; there's no further physical relatively that's creating the matrix, it's just like this is all mental. 

What's this can?  Well, it's this particular shape and size and colours, and these are all mental experiences, and you peel them all away, there's nothing there.  But these are the kind of views that he was interested in sharing with everyone, but he did want to convince people.  So, what he would do is he would say, "Okay, where is this person on the philosophical spectrum?  How do I get them to take one step towards me?  They don't even have to know fully what I believe, I just want them to take one more step". 

This applies in two ways, both to our contemporary politics and towards the more maxi.  You can make something more appealing and you can push people to the truth as you see it in small ways, and that's more effective, and I think that this kind of movement towards moderation would be a very good thing.  So, for a political party, you could note where the left and right are, and you could just inch a little bit closer towards the middle for each issue, you don't have to go full-hog libertarian, and I think that would draw a lot of people.  I also think that if bitcoiners discussed Bitcoin in this way, asking questions, "Oh, really?" and then just kind of nudged the counter just a little bit each time, I think that would be more effective.

Peter McCormack: Well, I think one of the problems of politics is there is a picking of a side, especially here in the US, and there's the belief that, "Oh, I need this party to win because they share my same beliefs on XYZ", and it's like, "No, I need these to win because they share my beliefs on XYZ".  What I think a lot of the voters haven't realised is the collective destruction that happens; it doesn't matter which party's in.  So, for example, runaway inflation is caused by both parties.

I think if people understood the real issues, then maybe they would realise some of -- they're not seeing the issues that nobody's talking about because they benefit both parties, but if you had a libertarian party -- so you have a left to right pull from conservatism to progressive ideas, and that's been good; you don't want to go too progressive, you don't want to go too conservative.  We don't have the big/small drag, we just have the big, big, bigger, and big, big, bigger in government is ultimately destructive for productivity and individuals, and I think that would be good.

Craig Warmke: I agree that would be good, yeah, very much so.

Peter McCormack: Is there anything I've not asked you about that you would have wanted to cover as part of this?

Craig Warmke: Not so much.  I'm doing the best I can, so if anyone has objections, feel free to fill up my DMs.

Peter McCormack: People will be in touch.

Craig Warmke: Yeah, but I'm doing the best I can, and it's a good faith effort, so if I've made mistakes or you think I'm wrong, just let me know and maybe you'll change my mind.  But I really hope that we can build up Bitcoin's intellectual infrastructure, either by continuing the work at BPI, Bitcoin Policy Institute, or building something like a research centre; I think that would be really cool.  The philosophy professors, most of our work is at resistance.money and I would be interested in what people think about it.

Peter McCormack: Yeah, well listen, keep doing this.  I think the rise of this new wave of Bitcoin philosophers -- I don't want to say Bitcoin philosophers on its own because some people will say, "Well, we've had this before", but this new wave, yourself, Troy and various other people that are coming in, thinking about Bitcoin in difficult ways, I think is super-useful.

Bitcoin, everyone is aware of it, it's becoming part of both culture and the economy and people's daily lives.  It's being adopted by people from the left, from the right, from moderates and libertarians; it's everywhere, and the consequences of that we don't know, but I think it's useful to have a broader and more open debate regarding Bitcoin and what it means. 

So, I absolutely welcome you, I think you're fucking amazing.  Keep doing it.  You have a welcome permanent invite on the show if you have a new paper and you're like, "Oh, Pete, I want to discuss this", just give me a shout and we will cover that in the future.  But keep doing your thing, and I really appreciate having your time today.

Craig Warmke: You're very kind, Peter.  Thank you so much for having me on.  I've been listening to you for years as I wash dishes, so it's a bit unreal to be here, but yeah, I hope to see you again before not too long.

Peter McCormack: Thank you.

Craig Warmke: Yeah, thanks, Peter.