140 - The Future is Fiat | Noah Smith (Noahpinion)

✨ DEBRIEF | Unpacking the Episode: https://shows.banklesshq.com/p/debrief-noah ----- Noah Smith is a writer economist, with fiercely independent takes that he articulates with precision and clarity. We see him as a knowledgable crypto outsider, which is a rare trait we've seen throughout the posts on his blog, Noahpinion. In today's episode, we cover geopolitics in broad strokes—Noah thinks we're already at war in the form of an economic showdown between the New Allies and New Axis. We also turn to crypto, where Noah gives his bull case while also addressing some misconceptions he sees in the crypto community. The sum of all of this is an episode title we thought we'd never see on Bankless—The Future is Fiat. ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 💠 TRUEFI | CRYPTO FINANCIAL HUB https://bankless.cc/TrueFi 🔐 SEQUENCE | ALL-IN-ONE PLATFORM https://bankless.cc/Sequence ⚡️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/Fuelpod ------ Topics Covered: 0:00 Intro 6:00 Noah Smith Respects Nerds 11:00 The War Economy 19:20 The New Axis 23:30 Battle of the Titans 30:50 Different Capabilities 35:02 Why Does This Matter? 39:00 Taiwan 45:20 Sanctioning China 50:35 The Path to War 57:15 High Level Crypto 1:02:20 Crypto In Conflict 1:09:45 Weakening Nation States 1:15:40 Crypto Misconceptions 1:26:10 A New Economy 1:32:10 Ponzis 1:40:48 The Fate of the Dollar 1:45:25 Bullish Rabbits ------ Resources: Noah Smith https://twitter.com/Noahpinion?s=20&t=kKYOtZ37UkLtwZ4WGmDT6Q https://twitter.com/Noahpinion?s=20&t=kKYOtZ37UkLtwZ4WGmDT6Q Noahpinion https://noahpinion.substack.com/ Freedom's Forge https://www.amazon.com/Freedoms-Forge-American-Business-Produced/dp/0812982045 NOAH'S WRITING: The War Economy https://noahpinion.substack.com/p/the-war-economy-sizing-up-the-new The Danger Zone https://noahpinion.substack.com/p/book-review-danger-zone Could We Sanction China? https://noahpinion.substack.com/p/could-we-sanction-china-if-we-had Blockchains, Dollarization, and Capital https://noahpinion.substack.com/p/blockchains-dollarization-and-capital Room for One More Bubble https://noahpinion.substack.com/p/i-think-bitcoin-has-room-for-one Economic Misconceptions of the Crypto World https://noahpinion.substack.com/p/economic-misconceptions-of-the-crypto Amway Culture https://noahpinion.substack.com/p/is-web3-culture-similar-to-amway Central Bank Digital Currencies https://noahpinion.substack.com/p/central-bank-digital-currencies-are NFTs Will Probably Be Back https://noahpinion.substack.com/p/nfts-will-probably-be-back Beating Inflation https://noahpinion.substack.com/p/how-much-will-beating-inflation-hurt No, America is Not Collapsing https://noahpinion.substack.com/p/no-america-is-not-collapsing Techno-Optimism https://noahpinion.substack.com/p/techno-optimism-for-2022 Lovecraftian Intelligence https://noahpinion.substack.com/p/lovecraftian-intelligence?sd=pf Sci-Fi Futures We Didn't Get https://noahpinion.substack.com/p/the-sci-fi-futures-we-didnt-get New Industrialism https://noahpinion.substack.com/p/a-new-industrialist-roundup Liberalism is Resilient https://noahpinion.substack.com/p/liberalism-is-resilient ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman and we're here to help you become more bankless. Guys, an episode title you probably wouldn't think to see on Bankless, "The Future Is Fiat!" Wait, what are we talking about today? Record scratch. Today, David and I talk to writer economist Noah Smith. He's a contrarian. He is what I would call a knowledgeable outsider, which is fairly rare in crypto conversations. He's bullish on some crypto claims, but he's also willing to call BS on many other claims. That's why this was such an interesting conversation. We have two sections in this episode. The first

• 0:47Ryan Sean Adams?

  is all about geopolitics. Noah thinks we're already at war. We go into that question of who we're at war with and why. Why Noah thinks the world is dividing between the new allies, which is the US and EU, and the new axis, which is Russia and China. And in the economic showdown, we talk about who would win. Is it China? Or is it the US? Are they equally matched? Is one power greater than the other at this point in time? And does it have to actually come to blows? That's the question we ask Noah in this episode. In the second part, we talk all about Noah's thoughts on crypto. What is his bull case for crypto? War? Question mark. We get into that discussion. We also talk about what a global conflict would actually look like now that crypto enables capital flight. That is a big theme of this

• 1:32Ryan Sean Adams?

  episode, the flight of capital, and which kinds of powers are more impacted by this capital flight. Finally, we get into Noah's big critique of the crypto industry, the misconceptions he thinks that we believe, and why he says "the future is fiat." All in all, David, this was a really fun episode to do. And yeah, what were some of your thoughts going into this?

• 1:55David Hoffman?

  Noah is such a clear-headed, articulate, fun-to-talk-to guy. I just had a fantastic time being on the other side of the microphone. He's a treat to listen to, and he delivers his thoughts in pretty punchy and entertaining ways. So from a content perspective, I'm thoroughly enjoyed this whole entire thing. And he's got such a broad scope of what he is informed on. He seems to be like one-part historian, because he was rattling off some like deep history. In fact, that's how we start off this episode. And just to compare and learn about and position ourselves in history in terms of like global macro powers, but also

• 2:36David Hoffman?

  understand the crypto industry a little bit better. Just a polymath through and through, and a very articulate one, if that.

• 2:43Ryan Sean Adams?

  Yeah, I absolutely agree. It was a lot of fun. And there were lots of points in the conversation where Noah talks about "we." And I think that "we" he kept referring to is representative of the United States. I really feel like, though, we didn't get to talk too much about the United States and its future, Noah really views himself as kind of a, maybe, an advocate for the United States as a nation. And that was interesting to me as well. So if you're in another part of the world that doesn't really identify with the "we" of US citizen that Noah's talking to, that's the vantage point that he's coming from. So you could definitely see that in the episode. Premium subscribers, of course, stick around after the show for the debrief, where David and I talk about our thoughts

• 3:27Ryan Sean Adams?

  after the show. This is almost more fun than the podcast. Sometimes it is, because we get to give our raw and filtered thoughts to the Bankless Nation. If you're a premium subscriber, there's a link in the show notes where you can access that. And if you're not one, become one today. Guys, we're going to get right to the episode with Noah Smith. But before we do, we want to thank the sponsors that made this episode possible.

• 3:47David Hoffman?

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• 4:32David Hoffman?

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• 5:15David Hoffman?

  because Brave is shipping new features every single month with a mission to make Web3 easier to navigate for its over 55 million users. Wallet extensions are a thing of the past. So get started with Brave's Web3-ready browser today and experience a decentralized web seamlessly without all the clutter. You can download the browser at brave.com/banklist and click the wallet icon to get started. If you've been listening to Banklist, you know that we're fans of the modular blockchain thesis: the idea that blockchains will separate execution from data availability and consensus, allowing all three to become the best versions of themselves. And Fuel has built the fastest modular execution layer in the industry. By supporting parallel transaction execution, Fuel unlocks significantly faster throughput for the Web3 world.

• 5:56David Hoffman?

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• 6:27Ryan Sean Adams?

  Bankless Nation, we are super excited to host this conversation with Noah Smith. He was described to me as a millennials economist, and I think that's a pretty good description. He's pretty rational, he's open-minded, he's also a future forward. But I also think that description is just the start, because Noah does more, I feel like, than economist activity. He's kind of a polymath. He's an excellent writer. I have absorbed a ton of his content on his Substacks. It's one of my favorites. It's always something prescient he's posting. And I think he's also described himself as, quote, "somewhat favorable to the optimistic view of crypto." But he's also measured on his view of crypto. So it's good to bring you on the Bankless program. Noah, on a crypto podcast, I should say, how are you doing today?

• 7:13Speaker 02

  Hey, I'm doing all right. You know, it's a good day.

• 7:16Ryan Sean Adams?

  It is a good day. September 26 is when we're recording this, 2022, for posterity. So in case the day you're listening to this is not a good day.

• 7:25Speaker 02

  It's a very important day in history. It is the best holiday, Stanislav Petrov Day. On this day in 1983, there was Russian, you know, warning systems accidentally detected what they thought was an American nuclear launch. And the rapid response people wanted to launch World War III. And one guy, Stanislav Petrov, said, "No, no, guys, I think it's a glitch." And because of this guy, the human race was saved, because at that time, we had approximately like 10 times as many nukes as we do now.

• 8:00David Hoffman?

  Where is the statue of this guy? It was birds, right? It was like seagulls or birds or something that the radar was picking up, right?

• 8:06Speaker 02

  Oh, yeah, yeah, yeah, something. Yeah.

• 8:09David Hoffman?

  Yeah.

• 8:10Speaker 02

  Yeah.

• 8:11David Hoffman?

  Where's the statue of this guy?

• 8:12Speaker 02

  Well, I mean, it's Russia, so they didn't really want to do, you know, Russia has become this very atavistic place. They're really degenerating from an advanced society. They almost got there, you know, and then they they're degenerating into this sort of barbarian hell right now, and it's not a good look. And of course, they're not going to have a statue of a guy who doesn't launch nukes.

• 8:34David Hoffman?

  What would you accredit that the decline of Russia towards corruption, authoritarianism?

• 8:42Speaker 02

  The resource curse. It's when you have an economy based on oil and therefore like whether you get rich or powerful depends entirely on your control of this of this resource and what, you know, then that does not lend itself to, you know, the kind of broad based society. So when you look at the beginning of the Soviet Union before they really became an oil superpower at all, you know, it was all about manufacturing, right? There was the it was the Russian Industrial Revolution. And of course, they did it in a stupid and inefficient way, but they still did it, right? They still, the Soviet Union ramped up manufacturing a ton, and it was mostly for the military. And it wasn't that efficient, but they could make they learned to make a bunch of stuff. And then, you know, starting in the 70s under Brezhnev,

• 9:23Speaker 02

  they really started when when oil became incredibly expensive and Russia developed its oil resources. Russia shifted from being this sort of inefficient, yet powerful manufacturing empire to an empire of oil. And then when you look at countries that do this, most of them turn out badly. I know Norway turned out well, but like most countries that go down this road have very dysfunctional politics. And and so Russia, Russia's technological capabilities degraded. They essentially, according to Camille Galiev, who's the best guy to follow on this, they just they stopped respecting nerds. You know, by being a being a good engineer, no longer became a good thing in society. If you needed someone to dig the oil up out of the ground,

• 10:05Speaker 02

  you could just pay Halliburton or whoever to come over and do it for you. And all you did was control the land and You know, that that doesn't really lend itself to an intellectual society. And so that's what really happened. They forgot their nerds. They, you know, they just, they degenerated into into barbarians because that's all the all the barbarians are just extractive people, right? People who just live via extraction of resources instead of creation of resources.

• 10:34Ryan Sean Adams?

  This sounds like a Noah blog post. Maybe you haven't written this yet, but like, what happens to a society that doesn't respect nerds? Is basically Russia is kind of the case study that I, you know, we're obviously going to talk nerds because, um, you know, one of the nerds that we hold in highest esteem. And I, I, I hope he doesn't like to be characterized as a, as he doesn't mind being characterized as a nerd is Vitalik Buterin. So I know you know him, you've interviewed him recently. We'll, we'll talk about him in a second, but while we're on kind of the Russia theme for, for a minute, can we? My part of our purpose in this, uh, episode, I think, Noah, is to like, get a download of your brain, like how you think, some of your mental models for the world.

• 11:12Ryan Sean Adams?

  And match that against kind of our, um, mental models for, for crypto and some of our intuitions and see where they, they match and see where they, they kind of clash. And I think in order to do that, we need to understand a bit about your, uh, mental model of, um, the world right now from a macro geopolitical perspective. There is a, a post you wrote recently called the war economy. And I think this was first in a series of posts and you differentiated the war economy, uh, as being sort of a, a new era that we've entered into. Like as in, I think, present tense, we are in the war economy. And this is very different from the neoliberal economy of like the 1990s and maybe early 2000s. Can we talk about that for a minute?

• 11:57Ryan Sean Adams?

  Let's camp on this idea of the war economy, some, some idea of the gigantic, uh, economic reorganization, uh, that, that's happening. But like, the, the first question in, in that word war is a question maybe to you. Are we at war right now, Noah? Like, if you're saying we're in a war economy right now, what is that? And are we actually at war?

• 12:19Speaker 02

  Well, uh, so formerly we're, you know, involved in some random, uh, small military conflicts like, uh, you know, in a, in a policing role, but it's not really a war. The big war is, uh, is in Ukraine and we are giving weapons to Ukraine. Uh, we on, on with the lend lease program. We are not directly involved in that war. Uh, but we're helping Ukraine via giving them stuff, basically. And that's similar to the way we helped Britain. Um, in the beginning of World War Two, you know, before we got involved. Uh, for, for a while, Britain was just holding out, defending itself against Nazi attacks and we supported them with lend lease. We sent them tanks and planes and guns and whatever else they needed. And so that,

• 13:02Speaker 02

  that effort ramped up our defense production. At one point we were actually draining some of our own military resources just to send lots of stuff to Britain. And it's very analogous to, I mean, you know, it's called the lend lease program again. It's, it's the same kind of thing, except now it's Ukraine instead of Britain. And so, um, that, a- and if you want to read a book about this, I recommend Freedoms Forge. It's about how, uh, private industrialists essentially took over and saved the American war effort. And it couldn't have happened without them, especially, um, Bill Newsen was the, uh, he's the sort of the guy who built Chevrolet. Kind of, uh, the even, even greater auto manufacturing guy than Henry Ford.

• 13:46Speaker 02

  And, um, and then when, you know, Roosevelt called him up and said, would you like to be, you know, be on this, um, uh, you know, council of war production? He just said, yes. You know, cause he was an immigrant. He was a Danish immigrant and he, uh, he said, this country has given so much to me. Now I have to give back. So he boarded a train, quit his high paying incredibly prestigious job and just went to Washington to join this, uh, you know, war planning, um, uh, council. And so that's, uh, that's a really interesting story of how we did this, but for the, for the beginning of it, we weren't fighting any war. We were just supporting Britain.

• 14:24Ryan Sean Adams?

  So you're seeing almost the beginnings of kind of, would you call it an economic war? And like, what do you expect? I guess two questions. Do you expect this to turn into a hotter war? Or is this more like a Cold War type scenario that we've seen in decades past? And then like from a war perspective, is this about sort of the US, maybe NATO and Russia? Or are there other powers at play? I think you have this concept of like the new axis and the new allies, like borrowing from like World War II terminology. Talk about this for us.

• 14:58Speaker 02

  Right, okay. So will this be a hot war or a cold war? I certainly hope it does not turn into a hot war. Yeah, you know, during the cold, you know, we have nuclear weapons. We have less than we did before, but we still have enough to blow up us and Russia pretty effectively. We both have about 1,600 nuclear weapons deployed, which that will roast both countries. It might not destroy the human race, but it's enough to roast our countries. And I'll die. There'll be a nuke dropped on my head. I live at the center of San Francisco. Anyway, if the Russians can aim, I'm not sure they can aim, but they, I'll die. So, um, anyway, I really hope it does not turn hot. But so I think it'll be a cold war.

• 15:42Speaker 02

  But you'll notice that the Cold War had plenty of actual wars embedded within it. It just didn't have the big one, right? They called it cold because we never launched the nukes. But we had, you know, millions die in Korea, millions die in Vietnam, millions die in Afghanistan, and millions die in a whole bunch of proxy wars that the superpowers were not involved in directly at all. You know, proxy wars, genocides, some of which we supported, some of which we opposed. But then, you know, Cambodia, Indonesia, Ethiopia, all these, these genocides. So the Cold War killed tens of millions of people. Uh, if we just thought that's a good, good outcome compared to nuclear Holocaust and Armageddon,

• 16:27Speaker 02

  which is even worse. And so I, I hope and expect that, that, you know, people still love their children and don't want to see their countries become ashes and that we will not directly go to war with Russia or China, um, and will not launch the nukes. I, I really hope and expect that that will happen. But a Cold War struggle is, you know, is still like a war, you know, we, you still have to produce a lot of stuff. We had major defense production and spending during the Cold War. Um, and so, so that's a real conflict and of course it could turn hot and we have to prepare for that, even if it doesn't happen, uh, hopefully it doesn't happen. And so, um, in terms of the new Axis, there's really two reasons I coined that term. First of all, it's, uh,

• 17:12Speaker 02

  um, they're not calling it an Axis. The Axis, uh, original Axis terminology was mostly just a term, you know, we used. It was a term Mussolini made up. He said, this is the Axis upon which the world will turn. We're like, oh, those guys are called the Axis. But actually it was just a series of loose sort of pacts between these countries.

• 17:28Ryan Sean Adams?

  And this was Japan, Italy, Germany, World War II.

• 17:32Speaker 02

  Right. And, uh, you know, there were a few other smaller ones that we don't, uh, remember like Finland, um, who joined because they were just, you know, once the Soviet Union started, stopped, stopped being Germany's partner and started being Germany's enemy, when Germany stabbed them in the back, Finland is like, okay, well, we'll join the Nazis because the Soviets are the biggest threat to us. But we forgive them. We, we forget about that, you know, you, um, uh, but, but yeah. So there was a, I don't know, Bulgaria or somewhere. Um, but anyway, so there was, uh, yeah, it was a loose partnership. Like the Nazis and the, you know, Japanese empire did not like each other. They did not care about each other. They didn't coordinate at all. They would have, if they had won the war, they would have

• 18:14Speaker 02

  immediately had a Cold War with each other and started fighting, right? They, they, um, it was a loose partnership. They didn't really give each other anything. So we in the Soviet Union were actually pretty close allies. We supplied the Soviet Union with all, so we, I talked about Lend-Lease. We did this for Britain. We also did this for Stalin. You know, we were the industrial powerhouse. We gave Stalin all his stuff and Stalin said that without our material support, he would have lost the, the war. And that would have been very, very bad. And, um, you know, as bad as Stalin was, he was the second worst guy in Europe at the time. And had we not, you know, given him all like, you know, Soviet Union, we did had some manufacturing, you know, but they, but not, not enough. And so we just gave them tons of material to resist the Germans and it worked.

• 19:01Speaker 02

  They, uh, they threw, they, they supplied the manpower, we supplied the material and, um, and that worked, you know? And so we're doing a similar thing for Ukraine that we did for Stalin that time. Um, and since, you know, some of the fighting was on Ukrainian territory and, uh, you know, this is sort of like, we're supporting Ukraine again. Ukraine always gets invaded because it's right in the sort of the highway between Europe and, and Asia, right? It's one of those countries in the middle.

• 19:26Ryan Sean Adams?

  This term new axis, who is the new axis? So we know who the old axis is.

• 19:30Speaker 02

  China and Russia. New axis is China and Russia. Yeah.

• 19:33Ryan Sean Adams?

  But how aligned are they with each other really? Cause they don't really, I don't really pair them in my brain. Like how much of a partnership is there really there?

• 19:43Speaker 02

  Oh, uh, well, the point is that the new, the original axis wasn't as closely allied as people think. And that was what I was, I was trying to describe. So, so that the answer is they, it is a partnership of convenience. It is not a partnership of values, much as their values might coincide, you know, like, um, totalitarianism isn't like this thing where to tell, you know, totalitarian say, hey, you're totalitarian too, friend. It's not like that, right? It's like, oh, we want to rule the world. You want to rule the world? It's like, there's a, this inherent distrust between these powers, right? And, and Hitler and Stalin briefly allied and then Hitler stabbed Stalin in the back, very predictable kind of, you know, betrayal.

• 20:23Speaker 02

  Because, uh, evil turns in on itself. That's a quote from the Dragonlance Chronicles, which is an old fantasy series, uh, that everyone has forgotten.

• 20:29Ryan Sean Adams?

  Is this kind of like, uh, my, uh, my enemy's enemy is my friend sort of alliance that you're talking about?

• 20:35Speaker 02

  Yeah, exactly. That's exactly right. And so, so for China, what they want from Russia is basically distract Europe, distract America if possible, so we can have a freer hand in our backyard to increase our power within Asia, which is what they really care about. Right? They, and so they're, they're, they're hoping Russia will just basically like distract these people. Go, they're like, okay, Europe, America, you go fight the Russians while we do our thing. And, um, and that's what they're hoping. Uh, also, you know, of course, pragmatically speaking, they want oil from Russia and they're getting oil at a deep discount from Russia. Um, you know, Russia is, can't really easily sell oil to Europe or, or wherever anymore. So they're selling to China and India, which is, who is their old Cold War ally.

• 21:20Speaker 02

  And they're selling oil to these, to China and India, but they have to really discount it very steeply because now those buyers have some monopsony power and are able to exert leverage and say, hey, how about a discount? And they're getting a big discount, like 30% or more.

• 21:34David Hoffman?

  And just, just to make sure that my thinking is correct, Russia is like, is a big nuisance, like invading neighbors and, and, you know, committing atrocities. And this is annoying. But China, it's so annoying.

• 21:50Speaker 02

  Yeah.

• 21:50David Hoffman?

  But China is like the bigger threat, right? The actual one with like organization and economic strength. Is this, is this right? Like Russia is being the one doing the, doing the violence, but it's, it's China that's the much bigger cloud on the horizon, correct?

• 22:05Speaker 02

  Well, yes and no. I mean, so, so Russia has more nukes. Russia could roast us more easily than China could. And that is a bigger threat, but in terms of actually winning a Cold War with us, there's no way Russia could contend with us in a, in a Cold War. You know, they, they contended with us in the 20th century. There's no way they could do that in 21st. They are a small, shrunken version of, of the Soviet Union, uh, you know, and they, they're a shadow of their former self. There's no way that they could contend with us in a Cold War on their own. If, if they're, but China is a completely different animal. China's strength is economic.

• 22:44Speaker 02

  So people don't understand the magnitude of this. They need to understand the magnitude. China, by value added, China manufactures as much as the United States and all of Europe combined.

• 22:56Speaker 02

  That's how important China has become to manufacturing. It's become the center of supply chains for everything that gets traded and produced across borders. It is the indispensable country for a lot of companies. It is the world's greatest manufacturing power. And remember, the reason we won World War II was not because, you know, we love freedom and liberty and justice and our men or he-men, you know, awesome fighters and Patton, you know, yelled a lot. That's not why it happened. It was because we out-manufactured the enemy, plain and simple. And so China could do that to us today, the way we did it to Germany and Japan in World War II.

• 23:35Speaker 02

  And so that's, for the first time in the history of industrialization, the core of global manufacturing is not in Europe or America or allies of America.

• 23:48Ryan Sean Adams?

  So, okay, so just tracking to where we are and how you view the world, like Noah's lens on the world, right? So we are in a war economy right now. This is not a kinetic war between superpowers yet, and we hope it never turns into that. It's more like a Cold War that we're already in. And there are kind of two, I guess, sides of the chessboard. There's the new allies, which are sort of the US and Europe and associated allies. And there's the new axis, which is primarily-

• 24:18Speaker 02

  Japan, Korea, Taiwan.

• 24:19Ryan Sean Adams?

  Yeah.

• 24:20Speaker 02

  And hopefully, India will join, but there's still the swing power.

• 24:24Ryan Sean Adams?

  They're kind of an unknown. And so the new axis would be Russia and China. And you put together this post that I thought was really interesting with some actually actual graphics and data points where you sort of sized up the two economies and you're kind of like, battle of the titans, who would actually win? And by the way, Bankless listeners, this is the sort of thing that Noah publishes on his blog, which I think is super valuable. And you sort of size up the economy. And a few metrics you look at, one is kind of population of the new allies, the new axis. Another is GDP, and another is manufacturing. And as I was scanning through this post, it seems like, you know, the new axis-

• 25:06Ryan Sean Adams?

  Axis is superior in terms of population, at least right now. We could talk about demographics in the future, but they beat the new allies, except if you add India in the mix and they're kind of the, I guess, the dark horse in this. From a GDP perspective, the new allies are still ahead versus the new Axis. By a good bit, it seems like, but from a manufacturing perspective, it looks like the new Axis is pretty close. It's kind of like neck and neck, certainly within striking distance. And like, if you look at China, which is this blue bar right here going up, it is, looks like it's almost double the size of the US from a manufacturing perspective.

• 25:45Ryan Sean Adams?

  You need all of the US plus Europe combined to equal China in terms of manufacturing prowess. So kind of set this up for us. Is this what the landscape looks like? If you were to kind of compare new allies versus new Axis, like which is ahead in terms of winning some kind of war? Not a kinetic war, but maybe an economic war, whatever thing that we're in right now.

• 26:07Speaker 02

  I would say that they're approximately equal, right? They're equally matched. This, this graph is the one that I would look at.

• 26:15Speaker 02

  You know, this, so I didn't, you know, there, there's a few other countries I could have added on the new allies side. Like, you know, Korea is important. Australia and Canada are like, I guess, non-negligible. But then, but it's, it's comparable. It, we do not have the, you know, in, in the, in World War II, we just overmatched Germany and Japan. Like, America by themselves could just outmanufacture Nazi Germany and Imperial Japan together, you know, several times over. That is not true anymore. That is, in, in this, and, and during the, the Cold War, we could outmanufacture the Soviet Union. You know, they were a lot better than modern Russia, but they weren't as good as us. We and our allies in Europe and Japan could just completely overmatch them in terms of manufacturing capacity.

• 27:00Speaker 02

  For the first time, a power has risen that can, that, you know, can match us and our allies in terms of manufacturing capacity. I would say that the small differences on that graph are as much an artifact of measurement as they are representing a real advantage for us. I would say that overall, it's approximately equal. And we saw, now, now we manufacture different things. So we saw during the pandemic, America had a huge difficulty manufacturing masks.

• 27:34Speaker 02

  And other, you know, sort of very basic kind of physical goods that we needed for the pandemic, we couldn't ramp up because we were just so used to ordering this stuff from overseas. And this has triggered a big realization that we need supply chain resilience in order to harden ourselves for this war economy. And so that's a big part of the war economy is just supply chain resilience. And of course, it's not even worth writing a big post about that because the Biden administration's already all over it. It's one of their big things that they're doing sort of in the background. But notice that when it came time to make vaccines, everyone was predicting that we'd have this big trouble manufacturing mRNA vaccines in large quantities, especially the lipid nanoparticles in which the mRNA vaccines are, you know, delivered.

• 28:18Speaker 02

  And so we had no trouble, actually. Our biotech companies rose to the occasion in a very World War II like effort. You know, we called up, like we, we figured out what the supply chain was, we called them all up, they massively expanded production, the government funded a big expansion of production, you know, with guaranteed contracts and things like that. And then these biotech companies just made it all. And we produced massive amounts of vaccines, Russia, China still can't produce any of that. They've been working on this for, for years. They don't even have the capacity, much less the capacity ready at hand.

• 28:53Speaker 02

  And so, so, so China utterly failed in this test of advanced, high level manufacturing. And this really illustrates the way that global supply chains have changed over the last 30 years. Over the last 30 years, especially the last 20 years. Over the last 20 years, what has happened is that all the simple stuff, the stuff that we made 100 years ago and that formed the backbone of American industry during our industrialization period, that stuff has been farmed out to China. Instead of farmed out to domestic robots, which was the other alternative, it was farmed out to China. And so China has that, all that stuff. And we retained the very high value stuff, the stuff you can sell for a lot of money in peacetime.

• 29:35Speaker 02

  Right? We took the the ends of the supply chain. So you know, when you when you would get an iPhone, it would say like designed in Cupertino manufactured in China. Right? And that's really typical. So we would design the stuff. Other people would slap it together. We would make some of the high value components. And China has has striven to make more of the high value components domestically. Um, so we do, we make the hard stuff. That requires like innovation and a lot of like nerds who are, you know, large disproportionately immigrant nerds. Uh, you know, working in a lab somewhere, figuring out how to make like this, this really awesome screen or this really high performance chip or, you know, blah, blah, blah, this, this really software, you know, that works really well.

• 30:19Speaker 02

  And so, and and then China has like the, the, what we used to have, which is just armies of guys, uh, and by guys, I mean usually women. Um, in, you know, these gigantic, incredibly efficient factories with machine tools, you know, it's not just like manual labor anymore. Uh, they, they have like a lot of machine tools in some factories. They even have, uh, it's even automated. They have robots. But, um, but China is doing the volume. And if we were to go to war, it would be a contest of quality versus quantity and they'd have the quantity on their side. I'm not confident we could beat that.

• 30:52David Hoffman?

  Hmm. One interesting thing I I noticed in those, in the charts that that we were showing on screen is that it it took many nations to get above China in terms of manufacturing output. I think what what you were saying before that is like during World War Two, America was like the big Chad in the room in terms of manufacturing. We were like a unipolar power that we were just dominant, like we, we redirected the world because we had all of that power. And now it seems to be a little bit flipped in that China has all of the manufacturing power. It takes a coalition of countries to be able to match China, although we do beat China in some.

• 31:32David Hoffman?

  Uh, when you stack all of them together, but what you're saying is that that manufacturing of what China is uniquely capable at is, uh, like the, the, the qualitative side of what China is capable of manufacturing. Is something to consider and what they are good at is gives them an advantage in times of tension and conflict. Is that an apt summary?

• 31:53Speaker 02

  It gives them one advantage, you know, like, like I said, we just have different capabilities. Supply chains mean specialization. In the old days, we were not, we didn't have as much supply chain because it was not as easy to just ship little components around the world and manage everything via the internet. That has changed since the time of World War II in a big way. So in back then, it was like Germany makes cars, we make cars. I guess that's still true of cars because they're heavy and hard to ship. But then it was like Germany makes chemicals, we make chemicals. Germany makes, you know, like, I don't know, electronics, we make electronics. And so that was, that was sort of how it was then. Now, we are integrated into supply chains. We're interdependent economically in a way

• 32:38Speaker 02

  that we weren't then. We still had a lot of trade then, but it was like, you know, metals and commodities and stuff like that that was getting traded. It wasn't this, you know, the supply chaining of of stuff, right? You're look at where your computer gets made. It gets made all over the place. And so that wasn't, that just wasn't the way it was back then. And so now that we have these supply chains, we have to think about a little different than just numbers. You know, yes, the numbers are important, but we also have to think about what's in those numbers. You know, we, what do we have a chokehold over? And so one of the most important things that we have a chokehold over and that China, of course, China knows this and is trying to correct it, but it's difficult, is computer chips. So almost all the computer chips in the world are made by the United States and

• 33:22Speaker 02

  its allies. And computer chips are

• 33:25David Hoffman?

  Would you, you're including Taiwan in this?

• 33:28Speaker 02

  I'm including Taiwan.

• 33:29David Hoffman?

  Okay, because we'll get to Taiwan in a second.

• 33:31Speaker 02

  Although Taiwan is a surprisingly small amount, you know, people talk about how TSMC makes all this stuff. TSMC makes some great high end stuff. In terms of, in terms of market share, in terms of value added, Taiwan's actually reasonably small. They're just, they're just strategically important for chips because they have, you know, some very advanced stuff with this one company, TSMC. And

• 33:53Speaker 02

  But but essentially, the United States, Taiwan, South Korea, Japan, Europe, together, produce most of the semiconductor industry in the world. And China's racing to catch up, but they won't be there for a while. And without semiconductors, without chips, it's very hard to make a modern military. So that's a bottleneck that we have. China has the bottleneck on processing of minerals. So, you know, if you dig up lithium, right, out of the ground, and you want to process it somewhere, China does most of that, right? And lithium is important for batteries, and batteries are what go in drones, and drones are, you know, are the small drones. And and small drones are getting more and more important to war.

• 34:34Speaker 02

  And so that's a, you know, that's a strategic, rare earth minerals everybody talks about. Then there's stuff like, you know, cobalt and copper and nickel and all these things like that. China processes a lot of the stuff. And that's that's very low end, primary industry. If you were trying to think of like, where you could make a bunch of money today, would you think about nickel processing?

• 34:56Ryan Sean Adams?

  Not in the US, not at all. I mean, it's such a commodity.

• 34:59Speaker 02

  Right. A hundred years ago, you absolutely would.

• 35:02Ryan Sean Adams?

  Okay, can I ask a high level question? Maybe no, this is a really dumb question, but let me ask the dumb question that that might be on other people, other listeners' minds, which is like, why does all of any of this matter? Manufacturing output, GDP, population labor, why does it matter in the nuclear era, post 1945, when every country on the planet, every major superpower, has effectively mutually assured destruction anyway? Doesn't that just completely level the playing field? Like, if you got into an all out total war scenario and the nukes start flying, no one wins. Everybody loses. And isn't this a totally different world if we're matching like, you know, who would

• 35:45Ryan Sean Adams?

  win in a contest of the wills, you know, kinetic power manufacturing? We're not producing tanks anymore. Like, the nuclear arsenal of one country can completely level another, and that can happen simultaneously. So like, does any of this even matter anymore?

• 36:00Speaker 02

  So so how's Russia doing right now with that idea?

• 36:04Ryan Sean Adams?

  Can you elaborate?

• 36:05Speaker 02

  So Russia has, actually, slightly more than us, the most deployed nukes in the world, 1,600 nukes deployed.

• 36:12Ryan Sean Adams?

  So because they are fighting-

• 36:13Speaker 02

  Is that allowing them to conquer the world?

• 36:15Ryan Sean Adams?

  It's not, because they are fighting a, like, kind of, I guess, a proxy war, maybe, against the West.

• 36:20Speaker 02

  It's not proxy for them, they're mobilizing their whole country. They're emptying out their population, waiting for Snowden to fight, you know? I'm excited about that.

• 36:27Ryan Sean Adams?

  Well, so, so, so, so tell me, so tell me about this. How does this work? If you're not, sort of, if you're actually, like, a head-on conflict between the new allies, the new Axis, like, World War II-style type of thing, right? Doesn't that just, don't nukes just, like, equalize the playing field? And maybe, don't take nukes, take-

• 36:46Speaker 02

  To some degree.

• 36:46Ryan Sean Adams?

  Yeah, to some degrees. Like, does that change the calculus at all?

• 36:50Speaker 02

  Uh, yes, it changes the calculus somewhat, sure. Um, nuclear deterrent is a very important deterrent to total war. So the thing is that if all you have is nukes, and you don't have the rest of the military machine and the industrial manufacturing might-whatever to back it up, if all you have is nukes, then you can either kill yourself to destroy the world, or do nothing and surrender.

• 37:13Ryan Sean Adams?

  What a-

• 37:13Speaker 02

  Right? You have, you have a binary choice. Kill yourself, you can either be a suicide bomber, or you can do, or you can just roll over. Because that's what it is. If you launch nukes, there's mutually assured destruction. Remember, if one country launches nukes at another country, it's getting nuked in return, because we have second-strike capabilities, nuclear submarines and such. And, uh, and so, if you, if you nuke, you get nuked and then you die. So essentially, launching a nuclear war is being a suicide bomber as a nation.

• 37:45Ryan Sean Adams?

  So your point is that no nation is, like, effectively willing to do that? Except as a last resort.

• 37:50Speaker 02

  Well, we don't know, and we don't know. And I, I, and I hope we don't find out.

• 37:55Ryan Sean Adams?

  Same.

• 37:56Speaker 02

  But, but certainly, Russia cared, and the Soviet Union cared enough about conventional military forces to build up a massive conventional army, uh, even though it had 10 times as many nukes as modern Russia, enough to roast not just America, but the whole planet. You know, they had 20,000 nukes, um, 30,000 nukes, I'm sorry, 30,000 nukes. We had about 20, 25,000. And so- That's just insane. That's, you know, you just turn the country into a parking lot. You turn the world into like a nuclear hellhole wasteland. And that's what a lot of the science fiction of the sixties and seventies was about. Because, but in the eighties, it reached a real peak. You know, that's when our nuclear arsenals peaked.

• 38:39Speaker 02

  If you just Google, do a Google image search for nuclear arsenals, you will see how much things have actually come down and how crazy it was in the eighties. But they nevertheless built up a giant conventional army. We built up a giant conventional army.

• 38:54Speaker 02

  Conventional deterrence was still important. And so, as it will be today.

• 38:59Ryan Sean Adams?

  Can I ask you another point on this? And by the way, maybe that's why we're round tripping to you. A happy Petroff Day to you. That was 1983, as you said earlier. What a thing that was avoided at that point in time. Absolute worldwide destruction. But like, there's another kind of event that has been talked about before. And Ray Dalio, I don't know if you read any Dalio, but like changing world order, his sort of thing. He thinks that China and the US, the new axis, new allies, as you've turned them, could come to blows over Taiwan effectively. Like, that could be the thing. What's your take on that? Do you think Taiwan is the thing? How likely is, are China and the US to come to blows over the Taiwan issue?

• 39:39Speaker 02

  Relatively likely.

• 39:42Speaker 02

  Joe Biden has now said four times,

• 39:46Speaker 02

  unequivocally, that if Taiwan is attacked, we'll defend it. Each time the White House said, "Our position has not changed." That means that was always what we were going to do. And so, we were always going to defend Taiwan if it's attacked. And that remains true now.

• 40:02Speaker 02

  Yes, it is highly likely China, China's leaders definitely want to retake Taiwan. China's population probably wants to retake Taiwan as well.

• 40:12Ryan Sean Adams?

  So, do you think that there's a potential future where what we're seeing with Ukraine as the proxy war between the United States and Russia, Taiwan becomes the proxy war between the United States and China? And if we want to compare these two things, how much more or less involved might we be in Taiwan?

• 40:30Speaker 02

  Well, first of all, neither of those is proxy at all. Um, the current war with with Russia is not a proxy war. I mean, you can say that Ukraine is a proxy for us, but certainly for Russia, they're mobilizing their whole society. That's not a proxy conflict. And if the United States fought China directly, that would be a proxy war on neither side. That is just called a war.

• 40:51Speaker 02

  The fact that we're fighting over some smaller country, that's that's that's typical. Different. That's typical. Standing for stuff. That's just called like, you know, uh, Athens and Sparta fighting over Corinth or something. It's like, uh, that's, that's why countries fight. Why do we want to protect Taiwan so much? Well, a couple of reasons. Um, the reason everyone talks about there, there's, there's a couple of reasons why everyone talks about there's, there's, um, Taiwan's a democracy, we love democracies, we want to protect them, and also they make a bunch of computer chips. Neither of those is the real reason. The, the, the real reason is two other things. Uh, the first reason is because if China conquers Taiwan, that completely compromises the security of Japan,

• 41:36Speaker 02

  who is our major ally in the region. And that basically puts Japan at the mercy of China and Japan basically becomes a, a, you know, Chinese, not maybe not colony, but yeah, vassal, right? China, Japan becomes a China, Chinese vassal at that point. At that point, the, you know, the United States is out of East Asia, but that's not even the most important thing. The most important thing is China rules East Asia and the, you know, Japanese and Taiwanese and of course, South Korean as well, center of technology then falls, you know, China can then extract whatever technologies they want from those vassal, then vassal countries. And those countries don't want to become Chinese vassals because, uh, you know, China also has a very dim view of Japan, but also of South Korea, um, and of course of Taiwan.

• 42:21Speaker 02

  And so, uh, that's the first reason is because China then conquers all of Asia and becomes the undisputed sort of lord of manufacturing, you know, including high end stuff that we current, our allies currently have.

• 42:35Speaker 02

  But so, so, uh, T. Greer, uh, Tanner Greer, wrote this, uh, although he goes by T. Greer, wrote this, um, really good blog post called Losing Taiwan Means Losing Japan. He's right about that. And that's why Japan also, despite, you know, like Japanese people being famously pacifist, uh, Japan has also pledged to defend Taiwan in a war. Um, that is one reason we would fight China. But that is not even the most important reason we would fight China over Taiwan. Here, the most important reason has to do with game theory. All right, it's time for some game theory. Um, if China launches an attack on Taiwan while American bases are still active, America could very easily spoil it just by attacking because our bases are intact.

• 43:18Speaker 02

  We just send our forces in and sink their fleet or whatever, right? Um, in order to carry out a successful attack on Taiwan, uh, especially a successful invasion of Taiwan, China must destroy the American bases in the region, including Okinawa, Guam, and some other bases as well. And so they have to take those bases out first for their invasion to have, or, or, you know, or major attack to have a chance of success. Uh, to have a, not a chance of success, to have, to be not exposed to American counterattack. So if they don't want to be left at America's mercy, they must preemptively strike us and basically Pearl Harbor us. Right? And if they do that, we will fight.

• 44:01Speaker 02

  You do not get to launch an unprovoked, you know, attack, slaughter thousands of American servicemen, you know, uh, and, and destroy American bases. You don't get to do that without starting a war. Okay, that's a war. If you say, oh, we wouldn't go to war, we would just let them destroy our bases because we don't want to fight over Taiwan. You are wrong.

• 44:24Speaker 02

  Countries, when they get attacked like that, go to war. Okay, and so in other words, if China launches an attack on Taiwan, it can't afford to risk us, you know, it can't afford to risk leaving our bases there. So it will attack our bases first and we will fight a war. Oh, because they preemptively attacked us. It's, it's a Pearl Harbor situation. It would be the same, it would kill probably more people than Pearl Harbor and, um, and be an extremely analogous situation. They preemptively attacked us because they couldn't afford to have our military forces there to act as a spoiler for their campaign of conquest. That's exactly why Pearl Harbor was attacked. And so if China attacks Taiwan, they will attack America first.

• 45:09Speaker 02

  If they attack America, we are at war.

• 45:12David Hoffman?

  That does seem like a much more logical reason than the TSMC or yeah, the other normally stated ones. Okay, so usually kinetic wars happen after economic wars. And Noah, you wrote a blog post called, "What would sanctions against China actually look like? How effective might they actually be?" And like the world is starting to get pretty familiar with global international sanctions after Russia invaded Ukraine. So like, we're starting to be able to like comprehend these things and understand them a little bit better. Maybe you could walk us through if we do get to that point, which you stated that you think is perhaps likely, and other people also have agreed, that I do think that means that we're also doing the economic war too.

• 45:56David Hoffman?

  So what would the economic war against China look like?

• 46:00Speaker 02

  Essentially, the only real economic weapon that we have that would affect China, unless we want to do a blockade, which is, again, that would lead to war.

• 46:11Speaker 02

  So is computer chips. So we actually waged economic war against Japan before we ever had any real war. When Japan was conquering China, we tried to stop Japan from conquering China, for which China is still not particularly grateful to us. But we tried to stop Japan from conquering China by putting sanctions on them, by putting an oil embargo on them. Right? Which is basically sanctions of the time. And so oil was the important thing that we sold to Japan because we were the biggest oil producer. And Japan needed our oil. And with this embargo, they couldn't get it. And that's, you know, that's why they attacked Southeast Asia and conquered Southeast Asia

• 46:52Speaker 02

  because Indonesia had enough oil to prosecute their war in China, which was what they really cared about, their war of conquest.

• 46:59Speaker 02

  Against China, our key commodity that we sell them is not oil, but computer chips.

• 47:06Speaker 02

  China does not have independently the ability to make enough computer chips to sustain its military machine or even its manufacturing machine, to be honest. All that value added that you saw in that big blue column of China in my graph, that depends on, most of that depends on computer chips. And China makes... You know, they do some of the low end parts of the computer chip supply chain, but on their own, they can't make nearly enough computer chips to sustain their peacetime or wartime economy. So what we would do, and of course, that may change, you know, but it will take China at least 10 years, really more like 20, and maybe never. And so for a while, they're going to have, they're going to be very vulnerable in this one area.

• 47:47Speaker 02

  So what we would do economically is cooperate with our allies, Taiwan, Japan, South Korea, and Europe, and cut China off from computer chips. Like we cut Japan off from oil before World War II. And that, that would not bring China to its knees, but it would really hamper them a lot.

• 48:06Ryan Sean Adams?

  That's interesting because that's a given by many historians as a reason for Japan actually bombing Pearl Harbor was the US's economic war of restricting Japanese access from, from oil. And so they, they actually had to get ahead of this.

• 48:21Speaker 02

  Yeah. No, so what, what really happened was that our oil embargo meant that they had to take over, that it had to take over Indonesia, which had a lot of oil then. Indonesia was a Dutch colony. The Dutch were allied with the British. The British were allied with us. So Japan says we need, so, so Japan's first idea was, okay, let's get the oil by conquering Siberia from Russia. All right. Then they tried it. They sent some troops north from, you know, into like modern day Mongolia. And Russia brought in Zhukov, their famous tank general, and they just kicked Japan's ass in a battle of, opening battle of World War II that nobody knows about called the Battle of, well, there were two battles, but the main one was the Battle of Khalkin

• 49:05Speaker 02

  Gole in Mongolia. Nobody remembers this now, but Soviet Union kicked the shit out of Japan's army because they had much better armor. And Japan, then, then the Japanese militaries were like, okay, so we can't kick the Soviet Union's ass. So they signed a neutrality pact with the Soviet Union. And with Stalin, they went to visit Stalin and sign a neutrality pact. And they said, okay, instead, where else can we get this oil to prosecute our conquest of China? The only place we can, other place nearby we can get it is Indonesia. So they decided to attack Indonesia, but they knew that, that attacking a Dutch colony, because we're still in the era of residual European imperialism here, right? Indonesia, Dutch colony, attack the Dutch, the British get involved.

• 49:50Speaker 02

  If the British get involved, the Americans get involved. And the Americans have already proven that they're they take a dim view of our conquests in Asia, right? And so so they knew America would get involved by just sort of, you know, friend of a friend of the Netherlands, which who's so that's why they attacked Pearl Harbor. They're like, OK, America, we're going to inevitably have to fight America. So we might as well just take out their ships right now.

• 50:12Ryan Sean Adams?

  I've just reminded of that that meme that you know, the the domino meme where like just one thing one domino falls this chain of events. And then you get to kind of World War Two. This is kind of what this what this feels like. I am right. You have an absolute

• 50:26Speaker 02

  World War Two is the real war for oil.

• 50:28Ryan Sean Adams?

  Right, right.

• 50:29Speaker 02

  That was the war of oil. Yeah.

• 50:30Ryan Sean Adams?

  No, you have an absolutely like encyclopedic mind around these things. It's so interesting to talk to you about it. But let me before we tie off kind of this war economy section and move on to crypto. And I promise bank listeners, there's there's a tantalizing link here between the two in Noah's mind. But I got to ask one question, which is, it feels very much like we have an unstoppable force meets an immovable object kind of thing here. Like, I've read people like Dalio, etc., who think that China is absolutely hell bent on taking Taiwan. Like, they think it's theirs, and they're hell bent on taking it. And they're happy to be patient, maybe for decades. But eventually, they're going to want it. And

• 51:14Ryan Sean Adams?

  they're playing for number one spot here. And if the US's position is thou shalt not take Taiwan without causing a war with the US and its allies, then we've got the unstoppable force meets immutable movable object here. And is there any way that this ends peacefully? Or are we like on a collision path to war?

• 51:39Speaker 02

  I don't know. I can give you a bullshit answer. And Dalio is happy to. But nobody really knows.

• 51:46Ryan Sean Adams?

  Spicy.

• 51:48Speaker 02

  No, I mean, like, everybody's happy to bullshit about the international affairs things, right? Any, any, any rich guy, right? Like, go ask David Sacks. Go ask this guy. What does this guy know? This guy knows dick all. Dale, yeah, Dalia, like, does the the guy you want to ask is a guy named Bruce Bueno de Mesquita. He has some models that have been a little bit predictive. And now he works for the CIA.

• 52:13Ryan Sean Adams?

  What's he saying?

• 52:13Speaker 02

  He's a political scientist.

• 52:16Speaker 02

  Um, he won't tell you the answer, but he'll, he'll know the answer better than anyone else. Um, there's a lot of ways that could end without war. Um, there could be some sort of agreement. Uh, China could have, you know, internal conflict and instability, uh, which is not out of the con- out of the question, given that Xi Jinping is just screwing everything up so badly. Um, there's, uh, you know, there's a lot of things that could happen. Right? Um, the United States could have instability. We could, you know, Trump could return, we could have another coup, this time one that succeeds, disputed presidential election, causing a civil war. Um, we could easily have instability as well.

• 52:58Speaker 02

  And so one of the countries could just back off and, you know, then the status quo just goes to the other country by default. Um, or both could have instability and then no one knows what the hell is going on, right? Um, and then we could, um, we could have a, a war that is basically like China sails some ships over. We sink the ships, China gets, China yells a lot and then it's done. They just stop. Or, yeah, or we could have a war where that we send some ships in to defend Taiwan. They sink our ships, they take over Taiwan and they win. Um, and then no one uses nukes. And so there's, it's possible that there's a limited war as well. In addition to the possibilities of no war at all. Um, China could get different leadership that is less hell bent on taking Taiwan. The idea that you, when you say China's hell bent on taking Taiwan, they're gonna do it.

• 53:44Speaker 02

  Um, that's, that's a proposition. That is not a truism. Not a fact. It's, it's not a fact. It's, it's a thing that seems true. If you look at like Xi Jinping seems hell bent on taking Taiwan. Uh, but we don't really know. Um, we don't really know what the, the Politburo supports because they're very secretive. Right? We don't really know what the Chinese people want, you know? Maybe they want Taiwan, but they would, they don't want a war. They just want Taiwan to love them. And so Hu Jintao, uh, basically said, you know what? We're not gonna take over Taiwan, we're just gonna put it off forever. We'll still say that Taiwan is ours. We'll still make the claim that Taiwan is ours, but we're not gonna make any preparations to take it.

• 54:27Speaker 02

  And we're just gonna, you know, sort of not do anything about it. And it's possible a Hu Jintao like leader could come to power instead of Xi Jinping.

• 54:36Ryan Sean Adams?

  Yeah, that's fascinating. Kind of the Heisenberg uncertainty principle for like country conquest, right? As you actually don't have to, you know, have to take it over until you kind of take it over.

• 54:47David Hoffman?

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• 55:29David Hoffman?

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• 56:12David Hoffman?

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• 56:57David Hoffman?

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• 57:34Ryan Sean Adams?

  One line that rang true for me as I was reading your writings, I can't remember which article I found this in, Noah, was you actually said that you were more worried about the US electing an authoritarian at home, more worried about that rather than World War II, or World War III, excuse me. And maybe that's something we can come back to. But we promised our listeners we'd talk about crypto. And I know you have a ton of thoughts about crypto. And the tie-in to me, Noah, and the reason why we spent so much time on getting an understanding of your thoughts on geopolitics and wartime economies, because I think you make the case in some of your writings, some of your articles, that wartime economy and capital flight

• 58:18Ryan Sean Adams?

  is actually the case, the strongest case in your mind for crypto. Before we get to that argument, I just want to get your high-level thoughts here. So you've talked to Vitalik. I know you've been an observer of the industry for a while. I know you've been at times bullish. I know you're a holder, I believe, of Ether and Bitcoin. Is that correct?

• 58:37Speaker 02

  Yes, that's right. Yes, correct.

• 58:40Ryan Sean Adams?

  So what do you think of this crypto thing? What's your take?

• 58:44Speaker 02

  Well, um, so I think that there's, you know, there's several angles to it. Um, one of the angles is just the original idea of Bitcoin, you know, the, the classic story of Bitcoin replacing fiat money. Because Bitcoin is deflationary where fiat money is inflationary.

• 59:02Speaker 02

  You know, the, the Fed controls your money and they're devaluing your money, blah, blah, blah, with inflation, blah, blah, blah. That story is all guff. That's, uh, that's all, it's, it's a fundamental misunderstanding of how money works. Um, and why money is money and what we, what it is. Um, and it is, it is just, um, it's a, it's a fantasy story that does help to sustain the price of Bitcoin. Which results in some notional wealth for a few people, but it is not a real thing. Um, it is, it is what I call guff. It's just some, some bullshit, people say. Um, that said, Bitcoin, uh, could be very important in a world of conflict because it could allow people to sort of,

• 59:45Speaker 02

  but it could allow people to sort of, you know, transfer money across borders more easily when there's instability in their home country. So, you know, we put sanctions on Russia, Russian rich people want to get their money out. They can, they don't have to carry a physical sack of gold over the border or anything. They can just transfer Bitcoin. And so, um, you know, even without the help of any bank, right? It's bankless. And so then, um, so if you look at World War II and what happened then, there was a lot of people, you know, rich people fleeing conflict and instability with physical valuables that they could transport, which is really what gold was all about. And so Bitcoin could replace that. Um, because the internet will still be up, um, and people can transfer Bitcoin. Although, you know, I would, I might even bet on something like, uh, Monero, you know, is, is less traceable than Bitcoin.

• 1:00:30Speaker 02

  And so, so actually that's the, the other one I'm thinking of buying, uh, is Monero. Um, and so, so I think that could be that that story could be interesting and important. Whereas the story of Bitcoin becoming like replacing fiat currency is the thing that used to buy pizza is not, that's not real. Uh, that's not gonna happen. I think people are starting to realize that's not gonna happen too. Um, then on top of Bitcoin, you've got the rest of crypto, right? Which is, I would say mostly based on Ethereum. There's some other things like Solana tried to come in and do their, the thing, but it's mostly based on Ethereum and, and it's web three, other blockchain stuff.

• 1:01:08Speaker 02

  And that can encompass everything from smart contracts, you know, DAOs to like, um, NFTs, collectibles, to the various, uh, you know, web three kind of Ponzi scheme scams, uh, you know, uh, very supported. And so, you know, when, um, when Sam Bankman Freed went on the Odd Lots podcast, he's like, yeah, these are, uh, these are all Ponzi's. You know, and, and then everyone, and the Odd Lots was just like,

• 1:01:38Speaker 02

  did you just say that? He's like, yeah, they're Ponzi's. Uh, but you know, I, I provide a service. If you want to do a Ponzi on my platform, do it. And, um, guess what happened? Uh, guess what happened next? Um, Sam Bankman Freed's an interesting character because I feel like he, he's in the, the business of facilitating other people's Ponzi schemes. Um, and then, and then using hedge funds to, uh, you know, to make money off that in addition. But then, um, you know, but, but, uh, he sort of, he feels okay about it because he's an effective altruist, right? He's gonna, he's like, I'm gonna extract money from the world and then I'm gonna give that money away to good causes. And therefore I'm acting as a conduit from people, you know, people who lose their money to like people who deserve more money. And so therefore I'm good.

• 1:02:22David Hoffman?

  Diving back into our, our conversation of like global tensions. We, we've been doing a lot of comparison and contrasting about World War II to where we are now with geopolitics. Except now there's a new player. Now there's a new player on the field, which is this neutral internet bound player of crypto. Uh, and what you, as you've labeled is specifically enabled for capital flight. And back in back in World War II, it really seemed like we had these like great Leviathans going after each other. It was the United States versus Germany versus Japan versus Britain versus France. And all these were like big cohesive units. That's because they had like strong abilities of capital controls to force

• 1:03:04David Hoffman?

  the whole entire country of, you know, say, country onto like the same page, right? And now we have like the internet, which is a democratizing technology. Now that internet has crypto. And so now like the people of the world don't necessarily have to go along with the leadership of a country. And I'm wondering how you think about the crypto force playing a role in a world of of conflict, like how how might that be leveraged by by the people of the world? And how might nations respond to that?

• 1:03:33Speaker 02

  Well, I think that to be honest, the the efficacy of crypto in creating a world of of no capital controls is somewhat limited because

• 1:03:47Speaker 02

  you know, like if you look at the amount of that has escaped Russia due to due to crypto, it's not that large, right? I've seen some estimates. It's like we're not talking like a hundred billion dollars or something, right? We're talking about like maybe a hundred million dollars. Couple hundred million dollars and that's not nothing. If you've got a couple hundred million dollars more power to you, but but that's not it's not yet at the stage that I would say like we're seeing vast, massive crypto enabled capital flight. The bigger capital flight was really from China. And China, there was this interesting, you know, sort of triangle trade that was going on with China using tether.

• 1:04:30Speaker 02

  And and and, you know, as long to to get money out of the country. Chinese people using tether and as long as and and instead they'd be they'd they'd get a bunch of Bitcoin in their portfolios at the end of this trade. And then as long as Bitcoin was going up, they made money and they preserved their wealth. But when Bitcoin's going down, that doesn't really work.

• 1:04:50Speaker 02

  So there's been some episodes of this, but so far we haven't seen and we haven't seen anything like the collapse of capital controls from Russia and China and, you know, countries that are doing this. And I and I'm not sure that how important capital controls were during World War II either. I think that no one was really trying to get their money out of America. And relatively few people were trying to get their money out of Britain.

• 1:05:18Speaker 02

  A few more in Germany, almost nobody in Japan was trying to get their money out.

• 1:05:25Speaker 02

  A lot of people tried to get their money out of China and succeeded to some degree. And often they got their persons out of China as well. Soviet Union, people had already kind of fled from the USSR's depredations in earlier decades and the civil war and all that stuff. So you didn't have, you saw people like, you know, running across the border with a sack of gold or whatever. Right? China was, I think, the biggest case of this, although you saw some in Germany as they, it became apparent they were losing the war.

• 1:05:55Speaker 02

  Now, I think that we'll see more, and I think crypto will be a part of that. But I don't think, I wouldn't go so far as to say that it just invalidates all these countries' financial systems and capital controls. It makes them more leaky than before, but that doesn't mean that they just go poof. And so, so my college friend Balaji Srini Vasan.

• 1:06:16Ryan Sean Adams?

  He's your college friend?

• 1:06:17Speaker 02

  Yeah. Yeah, what?

• 1:06:19Ryan Sean Adams?

  Did you know that?

• 1:06:20Speaker 02

  Yeah.

• 1:06:20Ryan Sean Adams?

  I mean, we've had him on the podcast, of course, so you must know about his network state thesis.

• 1:06:25Speaker 02

  Of course, yeah.

• 1:06:26Ryan Sean Adams?

  You know, his views on crypto. Yeah. What's your take on that? So continue.

• 1:06:29Speaker 02

  I mean, you know, I think Vitalik had the best take on the network state. His review is really good. And so I would just farm out my thoughts on the network state to Vitalik, basically. But, but I think that the short version is that we're not going to see crypto be able to replace whole societies. That can't happen. Because societies are a lot more than just, you know, flow of funds, right? A society needs a lot more than banks. You know, you need, you need roads, you need schools, you need police, you need, you know, all other kinds of stuff. And, and that, that Bitcoin will never replace, and no crypto can replace that.

• 1:07:07Speaker 02

  You know, you're still going to have to use the roads and the trains and whatever, wherever you go. You know, and the idea that, yes, you can have an international network of sort of like footloose, rootless cosmopolitan rich people. You know, rootless cosmopolitan was the official government endorsed Russian slur for Jews. So I love, I love, you know, the calling myself a rootless cosmopolitan because the Russians would have called me that. But. And Stalin eventually endorsed it when he turned against the Jews. Anyway, fun fact. But, um, yeah, so, so, uh, but people who like to travel all around the world, you know, I mean, are actually real rootless cause of pollens, right? And then there's nothing necessarily wrong with

• 1:07:51Speaker 02

  that, but you need a place to use the roads. You need a place to use the trains. And if you don't contribute to the public goods, you know, if you, if you figure out a way to not pay taxes, and if you figure out a way to just live this floating international ideal Baladrian life, right? Where you're just, uh, you're a citizen of nowhere and you just don't pay any taxes, but your, your meat sack resides somewhere and you eat food and you, you go to places and you meet people in real life and you sleep somewhere and all this stuff. You are, you are essentially being a parasite on the public goods provided by your host country. And crypto will never replace that. Um, because it takes, you know, maybe you could replace it and use crypto also,

• 1:08:36Speaker 02

  but crypto by itself can't replace it because there's no way for crypto to create goods in the physical world that you need. Um, and so those will have to be provided somewhere. So in practice, a lot of the people who talk about this sort of, you know, like, um, uh, talk about this like network state are, they just moved to Singapore. Right? And it's, it's very much like what people did during the imperial age where they live in these sort of gray zone entrepots towns like Hong Kong was the big one back in the day. Uh, Singapore was also there, but, but Hong Kong was the biggest. And, um, or Shanghai during the pseudo colonial period when you had like the concessions and all this stuff. You had people like Sassoon going there and setting up his business. And you had the Bund, all this stuff right in Shanghai. Um, and so you had these

• 1:09:19Speaker 02

  like, uh, these sort of international gray zones. Um, Casablanca, remember that movie? Uh, you had these international gray zone, uh, entrepos where people would move and, uh, you know, these rich sort of international drifting people, but at the end of the day, they had to pick a country. And, um, and the same is true now. And in practice, the network state is just

• 1:09:41Ryan Sean Adams?

  That's a fascinating view. So if, and part of our goal in this episode really, Noah, is to pick your brain and see what you think of things, see what you think of crypto and some of the ideas coming from crypto. And I think it does hold thus far the conversation that your statement in one of your articles, that you're somewhat favorable to the optimist view of crypto, but you're not all in on this thing. You don't think it's going to wholesale replace nation states. You think it can supplement, but like as long as we are meat sacks, which we are for, you know, at least for the next few decades, for sure.

• 1:10:12Speaker 02

  For a while.

• 1:10:13Ryan Sean Adams?

  For a while.

• 1:10:14Speaker 02

  Until we upload.

• 1:10:15Ryan Sean Adams?

  Yes, until we upload, then we will need some sort of nation state and the best crypto can do is supplement that. And you think the way its big use case, its killer app so far, is in getting around to kind of nation state capital controls. And you did say this in one of your articles about smart contracts specifically, because we've been talking about Bitcoin, but I'll read a quote from you. "There might even be a way to use smart contracts to port whole businesses or other networks of formalized economic relationships over from China or Russia with their structure largely intact. When local intermediaries, Chinese and Russian banks, courts, etc. can't be trusted because they're manipulated by the state or under foreign sanction, or simply disrupted by conflict, blockchains might be able to step in and provide the decentralized trust they were designed to provide." So

• 1:10:59Ryan Sean Adams?

  you think in a world of, you know, the war economy where trust is eroding with institutions, whether domestic institutions or kind of international institutions, that's where you see crypto kind of stepping up to the plate, not completely superseding nation states, but supplementing some of the trust that people had in these institutions and diffusing that. And I guess attracting some of that trust onto their networks, even in the form of smart contracts.

• 1:11:26Speaker 02

  Right. And this is, this is the, what I would call the weak form of the Bellagian thesis. This idea that you know, you're not going to replace nation states, but, but you're going to weaken nation states' grip on some of the, the important things. And the, and the grip, and the nations whose grip is weakened will be the totalitarian nations more than the democratic nations. The United States isn't going to implement capital controls at all. You want to move your money out of the United States? Just do it. It's not hard.

• 1:11:56Ryan Sean Adams?

  Wait, wait, wait. You don't think so in a war scenario? You don't think the US will go like a 1993 FDR executive order, sorry, you can no longer have gold, sorry, you can no longer have crypto. It's illegal to turn your crypto in?

• 1:12:09Speaker 02

  Maybe, but to be honest.

• 1:12:10David Hoffman?

  Or some form of tax expression aligned with this idea?

• 1:12:14Speaker 02

  There'll be, there'll be just sanctions. Um, no, it's not, that's not going to be so important, I think, at this point.

• 1:12:22David Hoffman?

  Um, so.

• 1:12:23Speaker 02

  Yeah, because nobody's gonna like the, at that point, to be honest, we didn't need to do that at that point. We, we did not need to do that in World War II. Uh, it was just, you know, we had this financial crisis. That was more really for the depression. Uh, than World War II itself. Um, the United States has the, the dollar, right? And the dollar is the safe haven. People keep declaring the death of the dollar and it keeps just going up, right? Like, people keep moving their money into dollars. They're not moving their money into Bitcoin as the safe haven of the world. It's just, um, uh, sorry, Bonji, that didn't happen yet, uh, maybe someday. But then, um, but yeah, people moving their money into dollars. To be honest, like most of the capital flows will just go into America.

• 1:13:09Speaker 02

  And, uh, and we won't necessarily even want those coming in. Um, so maybe, no, I, I don't think capital controls are going to be a big deal in America. They're going to be a very big deal in Russia, China, especially China. That's going to be the big one.

• 1:13:24David Hoffman?

  I feel like that's a, a big win, a big dub for the crypto industry. If, if that it allows for the citizens of totalitarian totalitarian countries to subvert their own capital controls, preserve their wealth and defang the to their totalitarian countries. And it doesn't really do disrupt too much inside of the Western, more liberal democratic countries. That sounds like a huge PR win if we can, as an industry, express that, if that is actually how it plays out.

• 1:13:54Ryan Sean Adams?

  It seems like a big win for, you know, lowercase L liberalism for sure.

• 1:13:57David Hoffman?

  Just goodness, humanity, yeah.

• 1:13:59Speaker 02

  Yes. As it should be. And, and this is where I have always disagreed with Balaji. You know, Balaji has often seen a threat to freedom from America itself. And I've been, and I've always disagreed with that. I've said, Balaji, you're, you're misperceiving the threat here. America is not, you know, Balaji is like, oh, my God, totalitarian wokeness. And I'm like, no, it's just, you know, a slightly more annoying form of the, the same kind of things that liberalism always creates, right? We've, we've had versions of wokeness before, and maybe this one is annoying because it has like people making dumb Twitter and Facebook posts, but like, we've had, like, America is not a totalitarian state, and

• 1:14:43Speaker 02

  we're not going to become a totalitarian state. The worst case scenario is that, you know, we, we have like coup and civil war and stuff like that. Instability, yes, we could have that, right? But totalitarian, totalitarianism, we've never had anything close to it. We're not going to have it.

• 1:14:56Ryan Sean Adams?

  This is, this, this is another thing. I want to come back to this, Noah, because you're an America optimist, I think. And I've heard you say on podcasts that you're on Team America. And this is so interesting. And, and I think refreshing in some ways, or at least it's a different vantage point than we're exposed to in crypto, because I do think part of the crypto, your question is, hey, you know, America, maybe the US is slipping towards more totalitarianism. And we've had, like even recently, I don't know if you're following the tornado cash thing, some suppression of what, what we would say are like, you know, First Amendment, freedom of speech, code rights, right? And allowing your crypto users not to use an on-chain privacy mixer. We could talk about that. I want to talk about America in, in a minute with you. But before we do, a few more of

• 1:15:39Ryan Sean Adams?

  your thoughts on, on crypto and Bitcoin, because I don't think we're quite finished here on this. I want you to burst our bubble on some of the misconceptions. Make sure that they are cemented here. So you wrote a post called "The Economic Misconceptions of the Crypto World." And you said, "There are two misconceptions, crypto people. I'm here to burst your bubble. Number one, misconception number one is cash is a form of long-term savings. And misconception number two, scarcity creates value." Can you talk about those two misconceptions that crypto people seem to have?

• 1:16:08Speaker 02

  Yeah, um, the first one has to do with what I was talking about before, which is the sort of foundational story of Bitcoin. This idea that uh that Bitcoin, it will replace fiat currency because it's a better store of value. When you look in Wikipedia or take an econ, high school econ course, it tells you that money is three things. A unit of account, a medium of exchange, and a store of value. I've always been annoyed with this list because there is actually two kinds of stores of value. There are things that appreciate a lot over the long term. And there are things that fluctuate very little in the short term. And those things are not the same things because of something called the risk reward trade off in finance.

• 1:16:52Speaker 02

  So let's compare, uh, instead of, let's, let's put aside Bitcoin for a second and let's think about, uh, let's think about, um, treasury bills versus Apple stock. Okay, so Apple stock will go up in the long term, assuming Apple continues to kick ass and sell a lot of products that people like. But it is volatile. Sometimes Apple stock goes down, sometimes it goes up, blah, blah, blah. If you get paid in Apple shares, as Apple employees do, if you get paid in Apple shares, prepare for your,

• 1:17:22Speaker 02

  prepare for your paycheck to be volatile. And no one wants to buy bread and gasoline and rent and pizza and whatever. Cocaine, whatever you're into, uh, you know, no one wants to buy that with Apple shares. Cause it's volatile. You'd rather hang on to Apple shares for the long term because it's a good long term store of value. It's not a good short term store of value. What's a good short term store of value? T bills, which is basically, you know, T bills are no longer the same as dollars, actually, because the, the interest rates got raised. But for a long time, T bills and dollars were interchangeable because they were just zero interest rate government bonds. Um, and so. Take like a US dollar, you'd want to pay for your stuff in dollars instead of Apple shares

• 1:18:07Speaker 02

  because yes, the dollar has inflation, so it go, it's value erodes steadily. But at least until recently and and really still like it's it's not that unpredictable. Right. When you get paid in dollars, you know how much you're getting paid in terms of bread and gasoline and rent. Right. You know it because the dollar is a good short term store of value. And there's this very deep principle of financial markets that say that says that there's a trade off between these two and you can't be both at once in anything even remotely approaching an efficient financial market. It doesn't have to be like perfectly efficient and blah, blah, blah, zero, you know, profit. It can be even like remotely like hand wavy, slightly efficient. And yet you still have a trade off between risk and reward.

• 1:18:50Speaker 02

  Hold on to Apple shares for a long term and you'll make for the long term and you'll make money, but it's volatile in the short term. Hold on to dollars for the long term and you'll lose money, but it's reliable in the short term to buy your bread. And so those are never the same asset. Because if you had the same asset, you know, the one asset that could do it all, you know, that it would be breaking the very fundamental principle of financial markets. And there's a good reason for that, which is that that reward is the way that that investors get compensated for taking risk. Right. The reason you taught you hold a volatile, you're willing to hold a volatile asset like Apple, which may even be down at the time you need to retire or like, I don't know, pay for a kid's wedding or whatever.

• 1:19:35Speaker 02

  Like there's real risk in holding Apple shares. You're compensated by the fact that on average it returns a lot over time. And if you know the math of Brownian motion, there's actually, you know, a a trade off between the the volatility and the drift. Right. It's the same thing. And so options, people will know all about that. And so there's this risk reward trade off where things that are good long term stores of value are shitty, short term stores of value. And things that are good short term stores of value are shitty, long term stores of value. And Bitcoin, the idea that Bitcoin replaces fiat money is predicated on thinking that that's not true. And in fact, we can be a good long-term store of value and useful as a currency.

• 1:20:20Ryan Sean Adams?

  Okay, so, point taken. And I think that distinction between short-term store of value and long-term store of value is very good, right? And I think more people in crypto should should think about that. But but also, why not Bitcoin for the long-term store of value? But more broadly, let me like, throw this back at you and

• 1:20:41Speaker 02

  I hold it.

• 1:20:42Ryan Sean Adams?

  Kind of Ether terms, right?

• 1:20:44Speaker 02

  Yeah.

• 1:20:44Ryan Sean Adams?

  For example, so advocates of Ether, it's like David and myself, we actually think Ether is an interesting money, like proto-money of the Ethereum economy. And it can act as a long-term store of value, obviously, for the Ethereum economy, volatility aside. But then you can just make a synthetic out of it. And you could put some ETH in a smart contract. You can use a price oracle and peg that ETH to a dollar, for instance, and create this synthetic called DAI, which is a dollar-pegged version of Ether. It has some other assets inside of it, but but also Ether. And so this is Ether from a store of value, long-term store of value perspective, being synthesized and turned into something that's a bit better as a as a short-term store of value, and then can also be used

• 1:21:28Ryan Sean Adams?

  as a medium of exchange and unit of account.

• 1:21:30Speaker 02

  You just reinvented reverse repo.

• 1:21:33Ryan Sean Adams?

  Well, maybe, or maybe this is just kind of like the gold standard, like backing, you know, nation-state. Maybe it's something else.

• 1:21:41David Hoffman?

  Something we've already invented in a new

• 1:21:43Ryan Sean Adams?

  We also see like Ether as a monetary unit. It's like also being used as a unit of account inside of the Ethereum economy, which is a very small subset of the world. But like, you pay for NFTs in Ether. That is the unit of account. That is also the medium of exchange. And so we see some saturation there. What do you think about these arguments?

• 1:22:02Speaker 02

  I mean, Apple shares are a unit of account. And Apple shares can be a medium of exchange. I can swap you Apple shares for, you know, whatever, like a...

• 1:22:11David Hoffman?

  Yeah, well, can be versus is because there are many, many diverse marketplaces where Ether is the unit of account and like the Apple doesn't have...

• 1:22:19Ryan Sean Adams?

  And also, the difference is, like, we would give, I think the crypto advocates would give a, throw another thing at you is like, the reason Apple could never be a money is because of its governance structure. Shareholder vote could like print more Apple shares at any point in time, could do all sorts of things. Whereas like, the idea of a monetary unit in crypto is, you have some immutability there. There's some sort of, you know, governance guarantees that we have scarcity. And I don't know if this gets to your second misconception here, which, which I mentioned earlier, which is, you think that crypto advocates have a second misconception

• 1:23:00Ryan Sean Adams?

  that they have to deal with, and that misconception is scarcity creates value. You don't think that's correct either. So, talk about that for us.

• 1:23:08Speaker 02

  Okay, so, the reason people don't use Apple shares as their currency is, has nothing to do with fear of dilution. Okay, these people are not, this is not a governance issue with dilution. The reason is because of volatility. The reason is because stocks go up and down. That's why they don't use it. You could have a, you know, you could have no dilution, you could have no dilution possible. You could have some provision preventing that. People still wouldn't use shares as money, even without the possibility of dilution. And the reason, and the reason people don't use Bitcoin as money is, is, well, besides whatever, like, you know, cumbersome network, I don't even know about that stuff. Assume that stuff's all solved by lightning or whatever. But then, but

• 1:23:52Speaker 02

  the real reason people don't use Bitcoin as money is because the price goes up and down, right? And so, so, consider the guy who bought pizza with Bitcoin. Remember that? Earlier, early in the days of Bitcoin?

• 1:24:05Ryan Sean Adams?

  Bitcoin pizza guy is very famous.

• 1:24:06Speaker 02

  Bitcoin pizza guy.

• 1:24:07David Hoffman?

  Maslow, yeah.

• 1:24:08Speaker 02

  Yeah. So, he bought Bitcoin pizza, he bought pizza with Bitcoin that would now be worth, what, a couple hundred million?

• 1:24:14Ryan Sean Adams?

  Yeah.

• 1:24:15Speaker 02

  Couple hundred million dollars. Would you like to pay a couple hundred million dollars for pizza? I wouldn't.

• 1:24:20Ryan Sean Adams?

  Yes, absolutely not.

• 1:24:21Speaker 02

  I wouldn't do that because I could use dollars and I could pay $20 for pizza. And that's, that's better. And so, the reason, there's a very good reason for that guy not to have done that.

• 1:24:35Speaker 02

  And so as long as you expect Bitcoin to appreciate on average, now Bitcoin was insanely volatile in its early days even more than now, but but as long as you expect Bitcoin to appreciate in the long term, it would be smart to not use it to buy pizza. And that's true even once adoption saturates, all the bubbles are done, blah, blah, blah. If you have a deflationary protocol that decreases the number of Bitcoins in the world, that is going to provide a positive return, right? And that positive return that it provides will make people trade it. Just like gold, right? Gold is in the same boat here. People, no one uses gold to buy things and it's not because gold is heavy and physically cumbersome and you have to carry around doubloons in your wallet.

• 1:25:20Speaker 02

  People would do that actually, but but no, you could use electronic, you know, gold shares, right? Electronic gold ETF shares. You can do that. That's possible and no one does it. No one does it because gold is volatile, because gold has a positive increasing rate expected return over time because because gold is constantly being withdrawn from the market to become jewelry or industrial uses and because it's constantly being withdrawn from the market, it has, you know, scarcity, natural scarcity in the in the long term. And because of that, um, because of that, it has volatility because people trade it, right? And no, and because people trade it, it goes up and down, nobody uses it for money.

• 1:26:05David Hoffman?

  One, I'd like to throw, see if, see if this is a curve ball. I definitely agree with you that the normal economy, the economy that already exists, where I go into my coffee, coffee shop is not going to be like, hey, we don't accept dollars, we only accept Bitcoin. That's just not going to happen. I do think that this metaverse economy, whichever, like this weird metaverse thing, like slap in some VR technology, online digital items, digital trinkets, digital whatever, whatever internet online economies, gaming, web three, pick your buzzword. These economies that are brand new, don't have the burden of a history of like coffee. Shops denominate in dollars and so and also they also have the fluidity of being able to choose

• 1:26:50David Hoffman?

  a digital currency from Genesis, which is why we see so many NFTs priced in Ether. And so I'm wondering if like, yes, what you're saying is totally correct about the pre-existing economy, but this new economy with a brand new blank slate might be more conducive to an internet native money regardless of the of the fluctuations of volatility of that currency in dollar terms. Because like I I own some NFTs. I don't look at them in dollar terms. I look at them in Ether terms. So there might be this like weird corner of the internet, which might become very large in the future.

• 1:27:25Speaker 02

  If Ether crashed.

• 1:27:26David Hoffman?

  That the volatility of the currency.

• 1:27:27Speaker 02

  If Ether crashed, you'd probably start looking looking at them in dollar terms. Like if Ether just vaporized.

• 1:27:32David Hoffman?

  Yes, if yes, in like all all correlations go to zero and it crashed, but also it works in the inverse way as well.

• 1:27:40Speaker 02

  They go to 100 correlations go to one. But yes.

• 1:27:43David Hoffman?

  Right, yes.

• 1:27:44Speaker 02

  Okay, so so um. The answer is that you're you're pricing one long-term appreciating asset in terms of another long-term appreciating asset, and that's fine. But when it comes time to buy things like if you're buy so I I guess if you want to represent the metaverse as like a world in which you're just buying and selling NFT type things all day, and that's the economy. Yeah, maybe. Yeah, people might use crypto, but I think what they're going to use is USDC.

• 1:28:14Speaker 02

  You know, you already see like, you know, I was talking to some some NFT people in Japan. There I have these friends who do NFTs in Japan that I really love. They are the Galverse people. Do you know those people?

• 1:28:25David Hoffman?

  No.

• 1:28:26Speaker 02

  Okay, it's a it's like an NFT brand. They're basically like anime NFTs and they're like they're they're trying to, you know, use NFTs to to sell the pseudo rights to make to to intellectual property for anime. And it's a great idea. I love these guys. I don't know if they're going to make any money, but I think they're great. And they said, and I said, oh, did you get out before the crash? Like, yes, fortunately, we exited to USDC. That was great. We exited to USDC. Yes, that is how money works. That is why USDC is money. And so I think that, and Tether, right? I mean, like, I kind of think Tether is committing some fraud still. Like, they got dinged for fraud, but USDC is not. So I would, I would

• 1:29:10Speaker 02

  trust more in USDC than Tether, but Tether probably works fine, too. And, you know, and so, but it's USDC and Tether. It's, it's these stablecoins that are money. What these are is money market funds. The USDC is a money market fund. It's just not regulated as a money market fund, but it is. Because, you know, it holds things that make a little more than dollars, but usually don't, that almost never crash and issues its own shares, i.e. tokens, that act as dollars in the crypto economy and are valued at exactly at a dollar. You can look at the chart. And so that's, that's a money market fund. That is dollars. And so people are going to use USDC and Tether. And I think that, um, what people need to understand is that

• 1:29:54Speaker 02

  the Fed is not the only entity that, that creates dollars, that prints dollars. It is one of the entities. The Fed can print dollars. It has that power, but it's not the only one with that power. Other private financial institutions, including banks, but not just banks, have the power to print money.

• 1:30:11Speaker 02

  And USDC, the creation of USDC is printing dollars. That is the creation of dollars, not exactly dollars, because it's not, a USDC isn't exactly the same as a dollar, but, but pretty damn close. If you looked at Divisia monetary measures that try to like add the dollar-like quantities of all these different things, you'd see USDC show up and you'd see Tether show up, right? The, the creation of stablecoin, of dollar stablecoins creates dollars. You have printed dollars and you're not the Fed. You know, USDC is not the Fed and Tether's not the Fed. But they've created, they've printed dollars. And so that's pretty cool.

• 1:30:55Speaker 02

  You can, you can print dollars. Printing dollars is fine. It doesn't, like, it's not some shadowy, external, like, distant moneyman who controls your wealth, blah, blah, blah, because your wealth isn't in dollars. Your wealth is in stuff that goes up is in the long-term store of value. Your wealth is Apple shares or gold or Bitcoin or your house. That's your wealth. Your liquidity is in dollars. Your liquidity is in USDC if you're in the crypto economy or in Tether, right? And so that's why you exit to USDC that because that's your money. That's your liquidity. And so basically, uh, that's working exactly as a well-functioning financial market economy should. And if we do have a metaverse where people are paying in crypto all the time, it's going to be in stablecoins.

• 1:31:40Speaker 02

  It's going to be in things whose expected value depreciates over time because USDC depreciates and Tether depreciates at the rate of US inflation, right? Those are, those are depreciating currencies. Those are inflationary currencies because they're just pseudo dollars, right? And so, um, and that's where people are going to have their liquidity and their long-term wealth will be in ETH, will be in Bitcoin, will be in whatever, um, or will just be in, in real assets, you know, like, um, like a house or a, you know, or a, or a company. And so then, um, and that's how it should work. This is all is working as it should, right?

• 1:32:16Ryan Sean Adams?

  So, no, if I were to kind of summarize your, your thoughts on crypto and, and why you're kind of like, um, opt, like cautiously optimistic on the space, but not just over the moon. You don't think it's going to do everything that it's like, uh, it's eternal optimist and, and perma bulls think it will do.

• 1:32:31Speaker 02

  Right.

• 1:32:32Ryan Sean Adams?

  It's, you, you respect the use case for capital flight, particularly in this kind of war economy.

• 1:32:36Speaker 02

  Capital flight.

• 1:32:37Ryan Sean Adams?

  Maybe smart contracts.

• 1:32:38Speaker 02

  Yeah, smart contracts. I think that those, the, the overhead to start a company across borders is just insane. You know, you look how much, look how much money Stripe has printed with Atlas, right? Like the, the overhead to start these companies is just nuts. Legal overhead, regulatory overhead, international blah, blah bullshit. Just, you know, if we're going to create this seamless global cyberpunk economy where I can make a movie with some kids in like Argentina and, you know, Morocco and Korea in like an afternoon and sell that on some digital marketplace. If you want to have that kind of creator economy, you can't afford to have these people like make a corporation, hire lawyers to navigate the laws of Korea and Morocco and Argentina and the United States all at the same time. That's huge overhead.

• 1:33:22Speaker 02

  No, just make a DIO.

• 1:33:24Ryan Sean Adams?

  So you're bullish on this capital formation use case, the DAO use case of smart contracts as well. It sounds like you're very bullish stable coins in general and maybe think that's one of crypto's killer apps and then also NFTs. But aside from that, the things that you are not bullish on, that you don't buy, that you think are kind of BS from the crypto space is probably the biggest one is that crypto, whether in the form of Bitcoin, Ether, or some other cryptocurrency, is going to come usurp the dollar for reserve currency status. You don't think that's happening anytime soon and you kind of call BS on that side of things. And like Web3 as well, there's a, there's a post that, maybe it was a guest post, but like Web3 culture is similar to Amway culture. I think there's elements of the Ponzi economics that you probably don't vibe with and

• 1:34:08Ryan Sean Adams?

  you're pretty bearish on as well. Is this accurate?

• 1:34:10Speaker 02

  Sure. There's a million Web3 Ponzi's out there and there's this funny guy, Lyron Shapiro, who just like, you know, he's sort of this crypto skeptic. He just like yells about Ponzi's all day. And it's kind of funny, he correctly, you know, I mean, he correctly called like, you know, that helium and Axie were going to be Ponzi's and that was just obvious. Yeah, there's a million Ponzi's. There will continue to be Ponzi's, like Ponzi's are natural to unregulated financial markets, right? They are a naturally occurring thing. My dissertation was on that. You know, it's like, yeah, like I-

• 1:34:44Ryan Sean Adams?

  But okay, but here's what's interesting.

• 1:34:45David Hoffman?

  That sounds cool.

• 1:34:46Ryan Sean Adams?

  So, so we think of like at Bankless, we think of Bitcoin as a Ponzi too, and not, not a Ponzi scheme, but like more like a Ponzi game, maybe like a, like a pyramid game. It's like more a way to sort of think about things. And you also wrote a post that said, I think Bitcoin has room for one more bubble. So you are also bullish on maybe this, this Bitcoin Ponzi as well. 21 million fixed supply-

• 1:35:10David Hoffman?

  And this is what Sam Bankman Fried was getting into when he was on the Odd Loss Podcast and be like, yes, I support your Ponzi. He was using Ponzi in a much more expansive way than what typical society is used to. But if you come into crypto, you kind of like see the world of finance as like a set of Ponzi's built on top of each other with a dollar at the very bottom. And that's a very like-

• 1:35:34Speaker 02

  Foreign concept to many.

• 1:35:35David Hoffman?

  Well, yeah, no, what do you think of this?

• 1:35:37Speaker 02

  But that's what finance is. It's like.

• 1:35:38David Hoffman?

  Okay, so.

• 1:35:39Speaker 02

  That's not all finance is. There's like, you can raise capital to like, build a productive enterprise. But like, high finance and trading is just a lot of. Who would think to do that? Are you talking about Bill Nudson in this World War II? So like, yeah, you can do that. No, people, people do that all the time. There's tons of, you know, it's mostly in debt markets, which is why the debt markets are so much bigger than the equity markets, because companies just borrow. But then, uh, yeah, no, it's, this is, this is finance. Finance is full of Ponzi's. Unregulated finance is full of more Ponzi's. Most of financial regulation is just trying to stop these natural Ponzi bubbles from just like frothing, because people get mad, you know, like, people are mad that they lose all their, you know, they're constantly like,

• 1:36:22Speaker 02

  like, just, there's all, there's just suckers. There's just, you know, wise guys and, and lucky guys taking money from suckers and, and unlucky people, right? And so, and that's, we, we think that this volatility in financial markets is sort of bad. When it's combined with a lot of debt, like in the housing bubble, it can actually hurt the real economy. If it's not combined with debt, it typically doesn't matter for the real economy, like, stonks go up, stonks go down. One person makes money, another person loses money, all this stuff, right? Everyone can lose money at the same time, of course, it's not conserved, but, but the point is that like, um, the point is that like, this is how, this is finance, right? There's gonna be a lot of these Ponzi's. Axie's Ponzi, helium was a Ponzi.

• 1:37:06Speaker 02

  Helium switched from like, a real business model that wasn't really working to like, a Ponzi. And then, you know, they're like, well, we could just Ponzi. And maybe that'll help boost us to like, some sort of scale where we can become not a Ponzi. And no. That didn't happen. And Axie is just like, we could have a Ponzi if it's also fun, but in the end, it was just a Ponzi. And then like, because it, I mean, because let's be honest, it wasn't fun. Um, so then.

• 1:37:33Speaker 02

  Like all these people.

• 1:37:34Ryan Sean Adams?

  And making the money, the making the money was the fun part.

• 1:37:36Speaker 02

  That's the fun.

• 1:37:37Ryan Sean Adams?

  And as soon as, as soon as that, as soon as that doesn't happen anymore than, than the Ponzi.

• 1:37:41Speaker 02

  Right, right. And, and so you have all these Ponzi's and what I'm, so, so the interesting thing about Amway is that Amway has a thing where you have, instead of just the, the overall value of like Amway shares or whatever, people monetize the people that they onboard and the people they onboard.

• 1:37:58Ryan Sean Adams?

  Right.

• 1:37:58Speaker 02

  So if I onboard Ryan and Ryan onboards David, whatever David crappy shitty Amway products David manages to sell, I get a little bit of cut from that because I'm the guy at the top and then you all worship me because I'm the guy at the top. And at the events, I'm the speaker and you buy my book. And that's Amway culture. And what I'm surprised is that none of these web three people have figured out how to create a downline. Cause you can easily do that. It's very easy with NFT, you know, whatever is to create a downline.

• 1:38:25Ryan Sean Adams?

  What do you mean downline?

• 1:38:26Speaker 02

  Oh, the downline is the, the chain of people who you onboarded and they onboarded and they onboarded. It's the chain of descent. It's like the lineage of onboarding.

• 1:38:35Ryan Sean Adams?

  Oh, that was Bitconnect.

• 1:38:37Speaker 02

  Oh, okay.

• 1:38:38Ryan Sean Adams?

  They got prosecuted. They get in trouble for the SEC. And that was in 2017.

• 1:38:44Speaker 02

  As they should, but you know, do it offshore. I don't know. You can just like scam people out of a lot of money, but, but I mean, okay. So it, that's illegal. I don't endorse crime. You'll get arrested. Don't do that. Um, but what I'm saying is when I say do this, I don't mean you should do this. You shouldn't do this. I'm saying someone will do this, right? This is, this is how unregulated financial markets work if people do shit like that. And, um, finance, you know, web three is the financialization of tech. It's like tech people were like, okay, well, we figured out how to sell people the internet and we feel, figured out how to sell people social media and AI and all those other stuff. And now what do we sell people? Well, maybe now

• 1:39:26Speaker 02

  we're done selling people stuff. Maybe now we could just extract. It's time to own. Let's, you know, like it's, it's time to build.

• 1:39:34Ryan Sean Adams?

  It's purely, do you think web three is purely extractive? No.

• 1:39:37Speaker 02

  Yeah. Well, I mean Ponzi's are extractive. If you start a Ponzi, like if you, if you fund a Ponzi and then you, you know, it's a Ponzi and then you dump the tokens onto retail, onto retail idiots, you know, and then walk away with cash. And but you know, before the Ponzi collapses, you have extracted, you have cashed out, you have, you have taken a little like, like hose, you have stuck that into some main street idiot who was, you know, like, uh, some, some Muppet, as they call them in the traditional finance industry. You've stuck your hose into some Muppet and you've gone, I drink your milkshake. You know, that is what you've done. And, you know, I don't endorse that. That's not, I wouldn't do

• 1:40:20Speaker 02

  that as a living. You know, I write blog posts for a living. I would not figure out ways to use a combination of algorithms and marketing to just extract value from the masses as my way of life. But someone is going to, someone's going to do that.

• 1:40:39Ryan Sean Adams?

  I definitely, definitely see that. And we've seen more than our fair share. And a lot of the bankless work is actually kind of educating about like, what are the sustainable things we're building here? And what, what are the kind of the Ponzi's? Noah, I feel like we could go on with this episode for a lot longer. And what, what this means is, this is a reason for you to come back there. Because we still haven't talked about the US. We haven't talked about like its place in the world. And there's so much there. So I think I've got two, two more things. One is sort of a serious question. And the other is just more of a fun question to kind of close this out. But let me ask the serious question first. And this is a part of the conversation we're just having, but also ties into America. So all of these Ponzi games we're talking about in web three and Bitcoin being a Ponzi, right? Ether being maybe a Ponzi too. They're all Ponzi's

• 1:41:22Ryan Sean Adams?

  all the way down. So is finance. How about the dollar, sir? Is the dollar a Ponzi game as well? What would it take for the US to lose its reserve currency status? I know that's, it's stronger than it's ever been. I mean, we, we kind of see how it's trading against the Euro and the pound right now. But all fiat systems come to an end, don't they? And how about the US and its destiny?

• 1:41:45Speaker 02

  Well, all things come to an end when the sun blows up.

• 1:41:49Speaker 02

  And the world goes dark in the heat death of the universe. But the idea that all fiat systems come to an end is, is, that doesn't necessarily mean a lot, right? Like, there's plenty of fiat systems around that have not come to an end. Like, the number of fiat systems that have not come to an end greatly outnumbers the number that have come to an end.

• 1:42:08Speaker 02

  Right? So like every, every country has its own fiat system now, right? And the number of fiat systems in the pre-modern era was relatively small because not many countries had the state capacity to create a fiat system. Yeah, the Mongols did it, right? You had a few countries doing it, but then before the 20th century fiat systems were relatively uncommon.

• 1:42:31Speaker 02

  And so to say that they always come to an end, most of them have not come to an end.

• 1:42:36Ryan Sean Adams?

  Well, let me, let me pull that back a little bit. How about their dominance comes to an end? Their reserve currency, uh, your status, for, for example, most recently the, the pounds transfer to, um, the dollar.

• 1:42:47Speaker 02

  The pound was on a gold, the pound was on a gold standard. That wasn't a fiat currency. I mean, it was on, uh, it was a fiat currency in that we're issuing pounds that are nominally pegged to gold. So, but it's, it was not, you know, you had a, um, you had fractional reserve banking, whatever, but it was not the modern. So, so the, the modern dollar is not backed by anything except the Federal Reserve's promises to keep inflation low. Like that's, that's the only thing backing the modern dollar. There's never been a reserve currency before that was like that. We're the only one. We're the only one ever, unless you count Kublai Khan, right? And I don't even know what was going on there specifically. Um, I mean, I know a lot, but we don't know, we don't exactly.

• 1:43:26Ryan Sean Adams?

  So are you bullish on the future, like supremacy, reserve currency status of the dollar into the decades ahead? Until the heat death of the universe, until the sun explodes?

• 1:43:35Speaker 02

  No, um, I think if the, if the dollar collapses and nothing replaces it, we have a world of global financial anarchy. And a lot of wealth gets destroyed.

• 1:43:49Speaker 02

  Your, your Bitcoin will go down, way down. Everything will go down. Um, uh, that's a, that's a difficult world. The real play, what we need to replace the dollar is just a better fiat currency. And I don't know who's going to make that. And we we hope that the euro would take some of the burden away from the dollar. And then Europe turned out to not quite be a country. And so they had the euro crisis in the early 2010s. And and so the euro has not been as good at replacing the dollar as it should have, but it's it's in there. And and the yuan is the other big contender, right? And China just has to change its whole society so that it's not like this closed society that tries to control everything that everybody does. And so capital controls and all this stuff. So that's easy, a lot easier said than done. We need to replace

• 1:44:33Speaker 02

  the dollar to improve on the dollar. We need a better fiat currency. Commodity money is not likely to replace the dollar. The future, the future is fiat. It's not necessarily dollar fiat.

• 1:44:49Speaker 02

  And the reason the future is fiat is because fiat is just so incredibly useful for buying pizza.

• 1:44:59Speaker 02

  No one has ever come up with a better system for buying pizza than fiat. And you can tell because Americans eat a lot, lot too much pizza.

• 1:45:08Ryan Sean Adams?

  David, I think we just

• 1:45:09Speaker 02

  George on pizza.

• 1:45:10Ryan Sean Adams?

  I think we found our episode title, The Future is Fiat here with Noah Smith.

• 1:45:14Speaker 02

  The future is fiat. With the future, right. The future really is just pizza.

• 1:45:19Ryan Sean Adams?

  That's even better.

• 1:45:20Speaker 02

  Say, we gotta get some pizza in here. How about that?

• 1:45:23Ryan Sean Adams?

  That's fantastic. Noah, this has been a lot of fun. I promised the the fun question, too. So why should we be bullish on rabbits, sir? What is your obsession with rabbits? Can you tell me about this?

• 1:45:33Speaker 02

  Well, I always had dogs. I love dogs and cats. And I always had dogs and cats. And I had other pets like hamsters, fish, whatever. But then I never had rabbits. And because I was under a misconception that they they poop everywhere, that they're not toilet trainable. But in fact, it's insanely easy to toilet train a rabbit. You just put the litter box next to the hay feeder, and they toilet train themselves within a day. And so rabbits are easily toilet trainable. And once I found out that, I realized that they're basically just like vegan cats. Like, and so, so if you want a vegan cat, then get a rabbit.

• 1:46:05Ryan Sean Adams?

  But, but how smart are these creatures? I mean, do they have the intelligence level?

• 1:46:08Speaker 02

  I mean, they're dumb, but a cat's dumb too. Cats, you think they act smart because they like, you know, seem wary of things, but no, cats are dumb. Like, if you have cats, they like, um, they can't figure out basic stuff and are always like, just like falling over, you know, like, anyway.

• 1:46:25Ryan Sean Adams?

  Is a rabbit like, is a rabbit like having a cat?

• 1:46:28David Hoffman?

  I feel like this is a hot take for a lot of cat owners out there.

• 1:46:30Speaker 02

  I love cats and they're dumb and I love rabbits and they're about equally dumb. So they're, rabbits and cats are about equally smart slash dumb.

• 1:46:37Ryan Sean Adams?

  I, I'm picturing a rabbit like a cat, but without all the pretenses, without all the kind of the, the ego, maybe.

• 1:46:45Speaker 02

  Oh, no, no. Rabbits, rabbits have the ego as well.

• 1:46:47Ryan Sean Adams?

  Really?

• 1:46:48Speaker 02

  Rabbits, definitely, like cats expect, cats are like, this is my house. You just live here, human, right? They're, they're very much bossy and rabbits are the same way. They're, they're like, it is.

• 1:46:59David Hoffman?

  I will say that I grew, I grew up at a very, very young age with a rabbit in the house. It was my sister's rabbit. I was like two to four or something. That thing terrorized me. I was, it's bitch. I was very scared.

• 1:47:15Speaker 02

  You're bossy. You know what they're like, uh, personality wise? They're, they're actually really like horses. If you've ever had horses or taken care of horses, um, you will recognize that rabbits have the same personalities as horses and, and the same digestive system, weirdly.

• 1:47:31Ryan Sean Adams?

  Noah, I learned a lot about rabbits today. I learned a lot about the, the future of the world, the economy, world war three, the potential for that, Taiwan, crypto as well. You taught us some, some things. So thanks for coming on. This has been a blast. Please visit us soon.

• 1:47:44Speaker 02

  All right. Yep. See you again.

• 1:47:46Ryan Sean Adams?

  Bankless Nation, this has been Noah Smith. We've got some action items for you. The big action item of the episode is go over to Noah's Substack. It's Noah Opinion. .substack.com, noopinion.substack.com. We, in the show notes, we're going to include a bunch of links to some of Noah's articles that we discussed today. There's at least 10 of them that we pulled in order to have this conversation, quotes from at least 10 of them. This is one of my favorite Substacks. You absolutely have to subscribe. And also, we'll include a link to Freedom's Forge, the book that Noah recommended earlier in the episode. So you have that. As always, risks and disclaimers. None of this, absolutely none of it, has been financial advice. Certainly

• 1:48:29Ryan Sean Adams?

  not legal advice either. Crypto is risky. You could lose what you put in.

• 1:48:32David Hoffman?

  Perhaps rabid advice.

• 1:48:33Ryan Sean Adams?

  Maybe some rabid advice sprinkled in. We'll take that. But we're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

• 1:48:41David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcasts, and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly rollups where

• 1:49:24David Hoffman?

  we summarize the week in crypto and other fantastic content. Thanks, everyone, for watching and being on the journey as we build out the Bankless Nation.