#579 Joshua Steinman on Preventing Ransomware Attacks In Future

Joshua Steinman is a former National Security Council staff member and current startup founder. In this conversation, we discuss the National Security Council, the narrative world, centralization, authority organizations, credentialism, ransomware, bug bounties, and industrial control systems. ======================= Did you know nearly 338 million dollars worth of NFTs were sent last year? And in 2021 that number is growing faster than ever. Looking to make your first NFT? Check out NEAR’s fast, scalable, low-cost, open-source platform. Learn why NEAR is the infrastructure for innovation at near.org ======================= Cosmos is building the Internet of Blockchains, marking a new era of interoperability, scalability, and usability. The free flow of assets and data between blockchains with bridges to Ethereum and Bitcoin will unleash the potential of DeFi, NFTs, and much more. Dive into Cosmos at cosmos.network/pomp ======================= OKEx is a world-leading cryptocurrency spot and derivatives exchange that offers some of the most diverse and sophisticated trading products and crypto finance tools on the market. Trusted by millions of users globally, we believe that cryptocurrency will reshape our money and society, enabling more financial inclusion with alternative tools and methods for wealth creation.

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

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Joshua Steinman is a former National Security Council staff member and current startup founder. In this conversation, we discuss the National Security Council, the narrative world, centralization, authority organizations, credentialism, ransomware, bug bounties, and industrial control systems. I found this conversation fascinating, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is OKX. Crypto moves fast, and many crypto-focused companies can't keep up. Crypto exchanges that cut through the noise are the ones that give you access, wherever

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• 1:31Anthony Pompliano?

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• 2:01Anthony Pompliano?

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• 2:41Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:09Anthony Pompliano?

  All right, guys. Bang, bang. I've got Josh here. Thanks so much for doing this, man.

• 3:13Speaker 02

  Thanks, Pomp. It's great to be here and great to be in Miami.

• 3:16Anthony Pompliano?

  Yeah, for sure. You are a former Navy officer and you served in the National Security Council. Let's just start first with military experience. Like, what'd you do in the military and then what got you interested in going on to the National Security Council?

• 3:30Speaker 02

  Yeah, I did a lot of Middle East sort of intel ops work. I got recruited out of college to join interesting corners of the Navy and did two tours in Iraq. And then when I wasn't deployed, was working on tech policy. So helped stand up the Defense Innovation Unit, which is the DoD's embassy-based kind of function in Silicon Valley.

• 3:54Anthony Pompliano?

  And this was like an outpost, I think. I'm gonna mess this up, but there was a...

• 4:00Anthony Pompliano?

  Maybe the Secretary of Defense, Ash Carter?

• 4:02Speaker 02

  Yep.

• 4:02Anthony Pompliano?

  Is that right?

• 4:02Speaker 02

  Yep, that's right.

• 4:03Anthony Pompliano?

  When I was working at Facebook in 2014 or 2015, he came out there and he met some people at Facebook, most of veterans.

• 4:09Speaker 02

  Yep.

• 4:10Anthony Pompliano?

  And there was kind of a big effort to set this up, right?

• 4:13Speaker 02

  Yeah, so I wrote a bunch of white papers back in 2013, just talking about how this was a big challenge that we had to figure out how to work with Silicon Valley, with startups, shorten that time between innovative technologies coming to market and the Department of Defense using them. And so there were a bunch of people involved. I was just one of them. But yeah, by 2015, we stood up that effort full-time.

• 4:37Anthony Pompliano?

  Very cool. And then National Security Council, what exactly is that? I think people hear it, but they're just like, all right, uh, explain.

• 4:45Speaker 02

  Yeah, yeah, it's, um, it's very, it's very hard to explain because you have to have a lot of knowledge of the details of how the US government like works. But you can think of it as like a traffic cop for national security decision-making processes. So anytime there's a really complex decision that needs to be made, if the president doesn't want to make it, the president can delegate it down or take a recommendation from specific members of the cabinet, like the Secretary of Defense, the Secretary of Treasury, Secretary of Energy, the Director of the Central Intelligence Agency and a bunch of other folks. The president can say, hey, what do you think about X? Like, should we go do this really complex, risky thing?

• 5:29Speaker 02

  If they want to get recommendations, they can delegate down to their deputies. And if those people want recommendations, they can delegate down to subject matter experts inside those departments and agencies. At every step of that decision-making and recommendation process, the National Security Council staff writes the decision memos, organizes the meetings, writes the recommendation memos that come out of those meetings and runs those meeting processes. And so it sounds like you're sort of doing a lot of paperwork. What it ends up being is that NSC staff end up coordinating most national security, most national security decisions and actions and strategies that the president wants to execute.

• 6:09Anthony Pompliano?

  And how much of this is like? For discussion purposes, right? So the president or somebody else who's high ranking, they want to better be informed or kind of solicit feedback. They come to the National Security Council. There's a bunch of discussion. There's a bunch of kind of information shared. And then really, it's not an organization, it sounds like, that kind of has a vote, right? And it's like, yes, no, and there's an action taken. It's more so an information gathering exercise and that discussion then informs the decision maker. And the decision maker still is the one who makes the decision.

• 6:40Speaker 02

  So it's actually both.

• 6:41Anthony Pompliano?

  Okay.

• 6:41Speaker 02

  The president can delegate down and say, hey, you make this decision. At the same time, in fact, there are a bunch of like votes. And so sometimes it'll be like, hey, the Secretary of Energy and the Secretary of Defense recommend that you take course of action A, and then like the head of CIA and, you know, the head of Homeland Security believe you should go for, you know, decision B. And then you'll like write up that memo and take it to the president and be like, what do you want to do? A or B? And so in many cases, yeah, there are like big fights that happen. And then in many other cases, you're right, it's just advisory. And the president will ask those members of the cabinet on the National Security Council, hey, give me some recommendations. How should we proceed here?

• 7:25Speaker 02

  But it really is up to the president. So each president gets to sort of craft a National Security Council that they want.

• 7:30Anthony Pompliano?

  And you were supposed to be focused on cyber for the most part?

• 7:33Speaker 02

  Yeah. So cyber, supply chain, telecom. And then when we had to do crypto things, it was mostly at the end, I handled that as well.

• 7:41Anthony Pompliano?

  Got it. And so just talk a little bit about, you know, some of the things that people were talking about. When you think of national security, right? You think a lot about kind of direct action in combat. Or you think of, you know, the CIA, the military, right? Like that's the national security.

• 7:57Speaker 02

  Yep.

• 7:57Anthony Pompliano?

  But when you hear cyber or you hear supply chain, you hear cryptocurrency, like that's not what most people think from a national security standpoint. So like, what are those conversations like? What are the topics that people cared about? How informed are people on some of these topics?

• 8:11Speaker 02

  You have to remember that when you're a member of the cabinet, when you're the Secretary of Defense, when you're the Secretary of the Department of Homeland Security, in many cases, you may be a subject matter expert in one area, but you're overseeing these organizations that are incredibly complex. And the selection bias for people that end up getting to those types of places is often that they've proven their chops as a subject matter expert and then they've moved into some kind of management. And so in many cases, these people are being asked to decide topics that maybe up until a few weeks before that meeting actually happens, they haven't really touched. And so it's the job of the NSC staff and then the staffers at those departments and agencies to get those, and they're called principals, to get those principals ready for that meeting, to make sure that they're getting all the intelligence briefings,

• 8:55Speaker 02

  all the background briefings that they're going to need in order to then come into that room and make that decision. And then sometimes those people are just so jam packed. They're doing so much from a day to day basis that like, and this is what the NSC staff ends up doing, they'll get a two-page briefing memo on the drive over to the White House and they'll read that and then they'll walk into the room and they'll have to have that conversation. And that's why the NSC staff plays a really critical part in many administrations because instead of just bringing people into a room and like the cabinet, the National Security Cabinet, which is also known as the National Security Council, you can imagine they come into a room and someone says, Bitcoin, what do you think? And then a bunch of people start talking. Instead, what the NSC staff tries to do

• 9:40Speaker 02

  is narrow down those discussions to like a single point of contention. And so in many cases, you have long processes for like months, in some cases, years, where people are literally trying to figure out, what's the thing we need to decide? What's the thing that maybe only the president can decide? And then you have those conversations at increasingly senior levels so that when it does eventually get to the president or when it gets to the actual National Security Council, the actual cabinet members that advise the president on foreign policy, they have very specific things that they're discussing.

• 10:13Anthony Pompliano?

  Yeah, and what seems so fascinating about this is Something like cryptocurrency is probably not very well understood, right? So you need staff members who are doing education.

• 10:22Speaker 02

  Yep.

• 10:23Anthony Pompliano?

  Then they're identifying like, hey, here's all the things we all agree on.

• 10:25Speaker 02

  Right.

• 10:25Anthony Pompliano?

  Right? Like this asset exists, right? This asset is, you know, worth X dollars, like, you know, whatever. But then there is obviously the lesser known, the topic, probably the more there is that is either disagreeable or decisions that need to be made. And maybe let's use the unhosted wallet. That was probably the most public thing that I think the National Security Council was involved in. At the end of the last administration, basically there was rumors. I don't know if there was actually any kind of regulation proposed, but it was spoken about of regulating these unhosted wallets. So talk through using that as an example of like where the National Security Council plays and then like how you saw that situation unfold.

• 11:04Speaker 02

  This is a perfect example. So what happened was that the Department of Treasury was debating issuing a rule, a regulation, and something was released. And so the job of the NSC in a situation like that is to circulate amongst the decision makers. Hey, here's the piece of paper that this agency is thinking about putting out. And then if other people have equities in that topic, the meeting is where they can air those concerns. And so while, you know, I won't get into the specifics of the, and there was a meeting. And I was the person in that meeting as the staffer that was trying to organize that meeting and get people all on the same page. This is what the discussion is going to be.

• 11:49Speaker 02

  So won't talk about what happened in that meeting, but at the same time, it's that process of like getting people together, making sure that they're all on the same page, they understand. And there was a proposed rule that came out very late. And so that's the thing that resulted from that meeting that the Department of Treasury was considering. And, and so that's what an NSC process looks like. You have a department that's thinking about doing something that's well within their sort of legal remit to do, issue regulations. That's what, you know, these departments and agencies do. But then when it runs into potential conflicts with other departments and agencies, the NSC basically acts as that traffic cop and is like, okay. You want to do X, this other department has a concern about Y.

• 12:31Speaker 02

  So how are we going to sort of find either some, a compromise? Or maybe there's not going to be a compromise. And when everybody comes together and we break down the issues, we take it up to the president. The president's going to say, actually, we're going to go 100% in this direction as opposed to this other direction.

• 12:46Anthony Pompliano?

  Got it. And so this seems to be the exact opposite of where like cryptocurrencies, decentralization, et cetera are, right? It's a very centralized hierarchical structure. I know you've spent a lot of time thinking about and kind of, you know, really trying to understand this shift from what I'll call it, the narrative driven world to something that is more kind of mathematically based, something that is much more focused on incentive systems and coordination governance in a decentralized manner. And so from a narrative driven world, it really feels like small groups of people, right? It's kind of the first example. Two is heavy, heavy credentialism, right? Of I went to a certain school, I worked at a certain place, I've got a certain level of wealth,

• 13:31Anthony Pompliano?

  I've got a certain position within the government, et cetera. So why do you kind of see, or you believe, after having spent so much time, right? In this kind of hierarchical world, that we are shifting away from it? That we are going to end up in this more like decentralized world?

• 13:46Speaker 02

  I think that what we've seen over the past 20 years and really accelerated over the past 10 years and five years is that what the internet is delivering on is this promise of the, of the decentralized world. And whether that was the election of 2016, whether that's the development of blockchain centric technologies, whether it's Bitcoin or Ethereum or other things like that, Urbit, networks that can allow people to enjoy some of the tools that we've come to expect from the internet in a decentralized way. I think that this is the direction, this is just from my experience, where, where things are going. And the reason is because they're more resilient.

• 14:27Speaker 02

  I think that they allow people to see the benefits of their efforts. And so with, you know, unlike previously where if you wanted to be Someone and you know, Pomp, you've got this great podcast with hundreds of thousands of listeners. And you've got an amazing email list that nearly 200,000 people read every day. If you wanted to reach that type of an audience 10 years ago, 20 years ago, 30 years ago, essentially, you would have had to run multiple, oh, never mind your investment fund, right? Where you get to decide how to deploy capital. You would have probably had to live three separate, completely separate lives. One in an investment bank or a private equity firm or something like that. One at a big newspaper, and then, you know, another on a radio station.

• 15:12Speaker 02

  And certainly, you know, there are some people in New York City that are able to do things like that. But the internet allows you to do it much more, right? And so, you know, the past 20 or 30 years, and I'm really preaching to the choir here, I know. But the past 20 or 30 years saw people build platforms that allowed people like you, to some extent, people like me, start to build out those types of audiences. But those people were still sort of charging a little bit of rent. And so as we move towards more decentralized platforms, I just think that people are going to migrate towards the lowest friction environments. And low friction environments are things like Bitcoin. There are things like Urbit, there are things like Ethereum, etc.

• 15:54Anthony Pompliano?

  And really what we're seeing is this breakdown of the narrative, right? And the narrative being you went to a certain school, you worked at a certain place, therefore you must have all the answers, right? And I think that the internet, as you've described, has kind of exposed some of that of your hero is still a human, right? They still put their pants on one leg at a time, like the whole nine yards. But also, I think that there's been a number of events from the war on terror to the global financial crisis, to the pandemic, and you know, plenty in between, where people just lose a little bit of trust, right? A little bit of faith. And it's not always some massive degradation of that trust or faith,

• 16:37Anthony Pompliano?

  but it's just a little bit here and there, and here and there. And then if you kind of zoom out, you look over the last 20 years, you're like, oh, wow. We've come really, really far in that loss of trust and faith in these institutions.

• 16:48Speaker 02

  Slowly and then quickly.

• 16:49Anthony Pompliano?

  Yeah.

• 16:50Speaker 02

  Yeah.

• 16:50Anthony Pompliano?

  And so from a credentialism standpoint.

• 16:54Anthony Pompliano?

  Does it just not matter at all? Is it, oh, no, wait, maybe like the top 1% of credentials will still matter forever? How do you think about where we are with credentials and kind of how that'll evolve over time?

• 17:06Speaker 02

  I think it's sort of a yes and kind of a scenario. You're still going to have the importance of people going to these, in many cases, great schools, great organizations. Think about it from the perspective of the Facebook PM, right? Like, you know, when I was back in Silicon Valley in startup world,

• 17:26Speaker 02

  being a Facebook PM meant that you'd gone through, you know, a little bit of formal training and then a lot of on-the-job rigor. And it meant that no matter who you were, if you had that title, people would take you very seriously as a product person. And I think that that shows two sides of the coin. Like, one, there's an expectation of rigor. And so you have programs like Austin, Allred Running, Lambda School, where you have, anyone can come in, they can apply, and they can go through a training program and they come out, and there's an expectation of rigor. What's that person going to be able to do? At the same time, it was like, it was Facebook. Facebook PM, okay, I got it. This person must be a rock star. And so I think that you're going to have those two kind of worlds.

• 18:09Speaker 02

  But, you know, as those pies get bigger, there are going to be folks that like aren't Facebook PMs, but they're going to have built themselves some massive audience or they're going to have a reputation that's derived because you can, you know, look at their commits on GitHub, you can, you know, see contributions they've made on Stack Overflow, and you're going to be like, wow, this person's like, you know, a legit developer. They really know C++, they've contributed to these code bases, et cetera. And then at the same time, you're going to have folks where you're going to have that organizational patina. Like, again, they're a Facebook PM, they're going to go interview at a startup, and they're always going to have that gravitas because of that environment they came out of. And I just think that both these things are going to increase,

• 18:54Speaker 02

  or at least be able to coexist. But I think it's the first one. It's that independent world that people can like make their own way in without having to go through these. Organizations that I think we're really seeing the growth of.

• 19:06Anthony Pompliano?

  Yeah. When you start to think about the impact on the centralized entities, right? There's some things like, let's say, a company or a business, right? I think we now see decentralized versions. Remote work in some way is it's still a centralized company. There's still a CEO from a structure, but you're decentralizing the actual physical presence, right? And so we're getting some of the degradation again. But what about like the government, right? In terms of is there decentralization happening within like, you know, the US government? Is there decentralization happening within some of the more legacy types of institutions? Maybe that aren't doing remote work? Just what is that impact as this trend becomes more pervasive? The tools become much more prevalent. Do you see anything happening there?

• 19:51Speaker 02

  You know, I think it's a huge opportunity for the United States government to think through how it structures itself to accomplish the missions that the American people expect it to accomplish. I've heard stories on both sides of this wall over the past 18 months where as government workers have been asked to stay home and not come into the office. I've seen, you know, folks have come and told me about, oh, X got much more efficient. And then in many cases, oh, it's no longer that efficient. And I think that what we're going to end up seeing and just given my experience in the military and then on NSC, I think it'll take a while. But as we have more tools that allow folks to understand like what?

• 20:34Speaker 02

  And this is what, you know, that that decentralized world offers is objective measures of efficiency. I think that, you know, if we can start to, if the United States government can start to focus on those, I think you'll see a lot of improvement, but I think it's going to take a while.

• 20:51Anthony Pompliano?

  Yeah. Authority organizations are another piece of this, right? Where you can decentralize the actual entities themselves, but also there's almost this, maybe. Lack of importance on a lot of these authority organizations. Some of this demographics, so younger people always have just kind of thumbed their nose at some sort of authority, whether it was their parents or a school or something else. But it does feel like there's a societal shift underway here, right? Where many of the organizations that we used to put incredible credence in what they said and what they did. Now, maybe they're still important, but they're just not as important. And the trend is not working in their favor. Is that your read on this?

• 21:31Speaker 02

  Yeah, I think that one of the most important things that we're going to see is that organizations that allow for some measure of clarity around the data that they're using to make judgments about the world and about their business process. I think that those are going to be organizations that are going to be very successful. And so, you know, people's skepticism, and you know, we can talk about that. But it exists, right? People are skeptical, maybe they're increasingly skeptical. And the more raw data that we can and potentially cryptographically verify as real, that will allow people to essentially build their own models on top of, models both in their own mind and then maybe models out, you know, in the digital world.

• 22:14Speaker 02

  And they can say like, look, we can all agree on some set of facts. Maybe we don't agree on the conclusions that we draw from them, but we can agree on a set of facts. I think the more we can drive organizations towards creating immutable facts, I shouldn't even say creating, recognizing, publishing immutable facts that allow people to then think about those and come to judgment on those. I think that's where, that's where I'd like to see things go.

• 22:37Anthony Pompliano?

  Yeah. One of the areas that the National Security Council is probably thinking about a lot right now is this whole idea of like ransomware and essential points of failure. And as we get into more and more of a decentralized world, I think that some of these will go away. But we've recently seen a number of kind of cyber attacks, right? Something that was right in your wheelhouse. Maybe let's just start with like, what is ransomware? And like, how have the types of attacks evolved over the last few years?

• 23:03Speaker 02

  Yeah, ransomware is when a malicious actor installs a malicious piece of code on your computer or on your maybe cloud server and in some way, shape or form takes over or locks you out of that system. And so it can take many forms. There are famous ransomware attacks that have happened in the past four or five years. But, but core of what happens is like, hey, I can no longer log into my computer. And then the attacker that did that sends me an email and says, hey, if you want access to this, you have to pay a ransom. And so we've seen this all over the world. There's a famous attack in 2017,

• 23:47Speaker 02

  NotPetya and WannaCry. These are two massive campaigns that were undertaken that locked out hundreds of thousands, maybe millions of users from their computers and asked people to pay cryptocurrency to various accounts in order to unlock their machines.

• 24:04Anthony Pompliano?

  And so what are they doing? They're simply just locking you out of the machine and they're saying, hey, you can't get back in until you pay?

• 24:09Speaker 02

  Yeah, that's right.

• 24:10Anthony Pompliano?

  How do you pay if you can't get in the machine? Is that a problem?

• 24:13Speaker 02

  Yeah, maybe you've used some other computer or something like that. In some cases, and we have to go back, maybe we can put some stuff in the show notes, but those attacks actually, even if you paid the ransom, didn't unlock those machines. It's really challenging because again, you're dealing with an anonymous internet-based malicious actor and you don't even know what their purpose is. Some of these ransomware attacks that have spread around the world have been targeted very narrowly, but then they've spread all over the world, you know, possibly, you know, by mistake, or maybe it wasn't intended to do so. But, you know, in many cases, these things are uncontrollable.

• 24:51Anthony Pompliano?

  I mean, they're digital viruses, right?

• 24:53Speaker 02

  That's right.

• 24:53Anthony Pompliano?

  They have a virality to them.

• 24:54Speaker 02

  Yep.

• 24:55Anthony Pompliano?

  That whether intended or not can spread very quickly, right?

• 24:58Speaker 02

  Yeah.

• 24:58Anthony Pompliano?

  The world became much more familiar with virality over the last year or so. Talk a little bit about the recent ones in the United States. So there was this one in Tampa. There was something around like Beef. I think there was a Pipeline. Attack, are they all kind of similar in nature, but just targeting different types of infrastructure? Or how do you kind of categorize them?

• 25:21Speaker 02

  Yeah, so ransomware has been around for a while. And I think what we're seeing now is it is expanding in terms of the scope. And so what it used to be was, hey, maybe someone would lock you out of a computer, or maybe they'd lock you out of a network or something like that. But over the past, really 30 years, we've started to put computers into industrial control systems. So you mentioned a few big industrial systems like Tampa Bay Water Treatment Facility, a series of meatpacking plants around the world, a brewery, the Molson Coors Brewery was hit by, I believe it was hit by ransomware a few months ago as well. And then obviously,

• 26:03Speaker 02

  you had the Colonial Pipeline attack where by all reports, what happened was that the accounting systems at that company were hit by ransomware. And so there's this change happening where, and the Tampa situation is the only one that I'm aware of so far, where there was an actual attempt, and that was not ransomware, by the way, but there was an attempt to dial in over the internet and change some of the operating parameters of that water treatment facility. And so on the ransomware side, what you have is people that are dialing into computers, locking a user out. And then in this other situation in Tampa, you have a malicious actor trying to log into that system and change the operating

• 26:48Speaker 02

  parameters. Now, I think that in some way, some of these trends are going to converge. And what's going to end up happening is they're going to have these massive industrial infrastructures where the attacks, they may or may not go after the computers that the humans are using, but they'll go after the computers that are actually governing the process that makes the thing that generates the capital for that undertaking. And so it's

• 27:14Speaker 02

  You know, sure, you could go after the CEO's laptop. But if that CEO is the CEO of a giant meat processing facility, and that actual equipment that's processing the meat, all of a sudden, doesn't operate, like, that's a real problem.

• 27:30Anthony Pompliano?

  Yeah, so it's almost like getting into the CEO's computer. Maybe you can get some ransom or whatever. But if all of a sudden you shut down the operations of the business, and essentially what you're trying to do is you're trying to get to the most critical piece of infrastructure. And if you take that out, then all of a sudden, you got everyone's attention.

• 27:46Speaker 02

  Exactly, and not only is it a problem in the short term, but that equipment is super expensive, right? It's a big capital expenditure. It costs a ton of cash. And if you have to replace that, I mean, you're gonna really hit a company's bottom line.

• 28:04Anthony Pompliano?

  Most of these are asking for dollars, cryptocurrencies, some other form of compensation?

• 28:10Speaker 02

  Yeah, usually it's crypto. And then I'm sure there are other examples that I don't have. But obviously, crypto is really easy for these folks to ask for.

• 28:19Anthony Pompliano?

  And then because the crypto is sent in a public ledger,

• 28:24Anthony Pompliano?

  is it pretty easy to track down where it goes from there? Is there a way to basically use that to like, catch who these people are? Do they usually not get caught? Like, kind of, what's the, maybe like, the law enforcement angle of this?

• 28:34Speaker 02

  I mean, that's a really interesting part, which is that, you know, the, many of these currencies, Bitcoin especially, the chain is, you know, people can see who owns what coins. And so, yeah, in many cases, they are asking for Bitcoin. And while I can't get into how law enforcement or the intelligence community goes after folks that are doing these types of illegal activities, and they are illegal.

• 29:01Speaker 02

  Yeah, I mean, that is one thing that is, you know, somewhat good. It's not a sort of bearer bond or something where you can just sort of walk away with it. And a few years later, you know, use it or redeem it.

• 29:13Anthony Pompliano?

  Got it. These industrial control systems, I think most people would think of, oh, the, you know, meat processing plant, or a water facility for a water company. But they also are like, the electrical grid in a major city, right? Like, it seems like that's a pretty similar type of thing. And if all of a sudden, you can take over the electrical grid and shut down electricity in the city, like... Maybe mass chaos doesn't happen immediately, but you only have to go a couple of hours, if not a day or two, and you're gonna have mass chaos.

• 29:47Speaker 02

  Yeah, it's a big issue. And there are a lot, there's a lot of attention that's being paid to it. So, the new administration has done some great things on this topic. They've got some new orders out, some new instructions. We did a lot of work on this as well, trying to shore up and secure those systems. It's something that a lot of people are paying attention to, not only in the government, but then you've got great companies outside of the government that are building amazing technologies to try and prevent these types of attacks from happening, or find them and very quickly remediate them once they have.

• 30:21Anthony Pompliano?

  Is the electrical grid like the most important? Is it nuclear reactor, you know, energy plants? Like, and some of this you may not be able to talk about, but just like, what types of things are like the really big things that everyone knows that's in this world? Like, hey, we gotta protect, you know, A, B, and C?

• 30:39Speaker 02

  There's a lot of important stuff out there, and a lot of it's connected to the internet. And so I think that one way to sort of judge this is you look to see where the government is spending time trying to buy down risk.

• 30:52Anthony Pompliano?

  Okay.

• 30:53Speaker 02

  And so, sort of nerd out for a minute, you can look at some regulations that have been put out by the Department of Energy. And they have been for many years talking about the cybersecurity of the electrical grid. And in fact, there are a bunch of requirements there where if you're operating on that grid, you have to do certain things from a security standpoint.

• 31:13Anthony Pompliano?

  Got it.

• 31:13Speaker 02

  And I think that what is gonna end up happening over the next few years is more and more of those types of regulations will come out for critical infrastructure sectors, of which there are many as like officially defined by government documents.

• 31:28Anthony Pompliano?

  So, energy is one. Like, what are some of the others?

• 31:30Speaker 02

  Energy is one. You can think of chemicals as well. It's like the chemical industry. Then you could think of like... Pipelines, you could think about transportation.

• 31:41Anthony Pompliano?

  There's just a ton.

• 31:42Speaker 02

  Yeah, there's a ton, right? I mean, think about it, everyday life, like if you had to unpack, if you had to unpack everything that you do on a day to day basis and ask like, how many times does that process that allowed me to do that thing touch the internet? I don't even know how you do that.

• 31:58Anthony Pompliano?

  I live on the internet.

• 31:59Speaker 02

  Yeah, literally. Yeah, your, your house, your security system, your car, the gas that filled it, you know, the supply chain that allowed that, you know, automotive company to make that thing. I mean, geez.

• 32:12Anthony Pompliano?

  So this is, I'm just thinking of this, so bear with me if this is a ridiculous question example. But we're talking about these kind of control systems. And I forget what movie or TV show or whatever, but I've seen the example multiple times where somebody puts like a pacemaker.

• 32:27Speaker 02

  Yeah.

• 32:28Anthony Pompliano?

  Right? And then it gets hacked and then there's all sorts of issues with that. In some crazy way, like that's the control system for the human body and it's connected to the internet. Right?

• 32:37Speaker 02

  No.

• 32:37Anthony Pompliano?

  Very small portion of people have them and also.

• 32:40Speaker 02

  It's real though, a lot of these pacemakers have Bluetooth, you know, transmitters in them and are running firmware. And like, how often are you going to update the firmware on someone's pacemaker, right? And the FDA pays attention to this, but it's a huge issue. Medical devices, I mean, we could go down a rabbit hole here, but you're absolutely right.

• 32:58Anthony Pompliano?

  And is there a concern there that like, I guess remotely, somebody could affect like all pacemakers from a certain manufacturer? Or is it more so what I'll consider like the targeting of an individual? I know that you have a pacemaker, if I get within proximity, it can pick up the Bluetooth, then that's the bigger problem.

• 33:17Speaker 02

  It's a weird world we're getting into and I imagine that probably you've got a bunch of these types of things that not only people are thinking about today, but are going to be challenges tomorrow.

• 33:27Anthony Pompliano?

  Yeah, it's, it's fascinating when you start to think of just like, what are the things connected to the internet that we would not want to be affected?

• 33:34Speaker 02

  Yeah. It's a lot.

• 33:37Anthony Pompliano?

  All right, I want to talk about kind of how we fix some of these problems. Both short term and long term solutions. To do that, maybe let's talk about this Tampa situation. There's a water treatment facility.

• 33:51Speaker 02

  Yep.

• 33:51Anthony Pompliano?

  That basically the control system gets hacked with ransomware.

• 33:57Speaker 02

  Or not with ransomware, it was just someone literally dialed in.

• 33:59Anthony Pompliano?

  Okay.

• 33:59Speaker 02

  And tried to change the mixture of the chemicals that were treating the water.

• 34:03Anthony Pompliano?

  Oh, so not even like pay me, just like, like basically I'm a non-economic actor.

• 34:08Speaker 02

  Yeah.

• 34:08Anthony Pompliano?

  And I'm just gonna like screw with you.

• 34:09Speaker 02

  Yep.

• 34:11Anthony Pompliano?

  How do they get in there? I don't know if you know or not. And then like, what are the ways that we can basically solve that short and long term?

• 34:18Speaker 02

  So there are a lot of best practices that have been put out, that government puts out, the private industry puts out. A lot of it has to do with like how you protect and segment those types of systems. How you conduct maintenance on them, like are you updating them regularly? How are you attaching new computers into the networks that are governing those systems? Honestly, and you know, you'll know this from your time in the military and from my time in the military as well, like the basics get you very far. And this is not new, you know, my predecessors said this, my successor talks about this all the time.

• 34:54Speaker 02

  On the NSC where if you are, if you have basic hygiene, if you are structuring your networks in like a reasonable way, like, hey, you know, maybe we shouldn't raw connect the computer that's controlling the mixture of chemicals that are, you know, going into the water supply of 20,000, you know, Floridians right to the internet, things like that. You can protect that, the low hanging fruit, you can protect yourself against those sort of like drive-by types of attacks. I think.

• 35:29Speaker 02

  First of all, obviously, you have to go and protect these types of systems by using best practices. And then as you move up that chain, like, once you've done the basics, you can start to do more elaborate things. You can monitor the networks, monitor the endpoints. You can start to think about looking at the standard behavior of like that water treatment equipment. You can start to set parameters like, hey, if you see it move out of like this baseline, let someone know.

• 35:57Anthony Pompliano?

  Almost like an alert system that, hey, we might not be able to prevent everything, but the next best thing to prevention is like immediately knowing.

• 36:03Speaker 02

  Exactly. And so what you have today across this environment is people building companies that are sending alerts, one at a time, maybe on one set of equipment or another. And, and over time, what we're going to see is people are going to start to looking, looking at all of those alerts, and then they're going to start to use big machine learning algorithms, and they're just going to start to figure out like, what does normal behavior look like? What does abnormal behavior look like? And that's, that's where we're going. So, you know, you have a very almost manual environment today. And I don't mean manual, because there are, there is a lot of digital instrumentation. Many of the companies that make this equipment, you know, Siemens, Rockwell, ABB, General Electric, I mean, they're, they're highly

• 36:47Speaker 02

  digitized. But the point is, is that in many cases, they're not, they're not, you're not able to take a look at the entire infrastructure all at once. And so like, over time, I think you're going to see instrumentation that happens on top. People start to build out models of like, what's normal behavior out to, you know, however many sigmas of like, average behavior, like, hey, in 99,000 situations, like, this looks normal to us. Here's like the one scenario that looks abnormal. That's where I think we're going.

• 37:18Anthony Pompliano?

  Yeah, it feels like some of this is very obvious, but a lot of the nuance and the things that are probably the most valuable are not very obvious to those who don't understand the problems, don't understand kind of how, kind of complex these control systems are, right? Something as simple as just, hey, we should monitor, and if it goes without, outside of some band, like, let us know. Okay. When you start getting into the actual like pH levels of the water, right? Super complex, super nuanced. And so I guess, is it the belief that like, you're going to get vertical specific type solutions, right? So like, somebody's going to go build whether it's a company, a government, whoever. Okay, here's the security apparatus and software for water treatment plants. And then a completely different team will go and do it again for electrical grid or whatever.

• 38:04Anthony Pompliano?

  Or do you think that there's going to be more kind of horizontal software built where it's just, it doesn't matter if you're the water treatment plant or you're the electrical grid. So many of the components are similar and therefore you can actually get software that is more applicable to the, rather than just one vertical.

• 38:18Speaker 02

  I think you're going to see the one and then the other. I think you're going to see the stuff being built for specific industries. In fact, it's happening now. And then over time, you're going to have people build out that additional layer of software. It's going to essentially be much more of a Swiss army knife and even that's happening now.

• 38:36Anthony Pompliano?

  Got it. Uh, let's talk about Bitcoin before we stop.

• 38:41Speaker 02

  I expected this question, yeah.

• 38:43Anthony Pompliano?

  What, just what are your thoughts on Bitcoin in general? Let's just start there. And this is you personally, this is not anywhere you've worked or anything.

• 38:48Speaker 02

  Yep. Uh, I'm a big believer in decentralized systems. I'm a big believer in decentralized stores of value, decentralized compute. And I think as many people are observing in this past weekend here in Miami has showed, you know, there's a certain degree of inevitability around this, if only because people are looking for ways in which they can preserve that which they've earned themselves. And then even, um, you know, getting away from specifically Bitcoin, but other cryptocurrencies like go out and earn and demonstrate and build value.

• 39:21Anthony Pompliano?

  Yeah. When you think about that asset, um, and let's say that it's going to coexist with a bunch of other assets. Is there a?

• 39:32Anthony Pompliano?

  Like national security component to this of embracing it or not embracing it? Is there an economic? Is there some sort of like societal implication that really kind of interests you? Or do you think it's just the complexity of all these different disciplines? And that's really where your interest lies?

• 39:50Speaker 02

  My thesis is a lot around the decentralization of so much of our society that as I think about that thesis, Bitcoin, cryptocurrencies, distributed compute, they just really fit into that worldview of where I think technology is going over the next 15 and 20 years. And you know, whatever personal value judgments I may have on that trend, really it doesn't matter. I do think that this is just happening, inevitable. I mean, you, we saw a country, literally, yeah, El Salvador, say that they were gonna, I think, consider, there's a law that they're gonna try and pass.

• 40:32Speaker 02

  But you know, I think more of that's gonna start happening, especially as you know, we've seen a lot of central banks deal with the past few years with monetary policies that like average folks may not have really understood, but maybe if they knew and some do, maybe they don't agree with it and they're gonna vote with their pocketbooks.

• 40:50Anthony Pompliano?

  I forget what the quote is, but I think maybe Henry Ford says, you know, if people understood how money worked, there'd be riots in the street before morning. Right? It's pretty, not a new phenomenon, right? But that's one of the things that I think is really interesting about this is if you go all the way back in history, this is a story as old as time. It just happens that now we've got digital platforms like Twitter and various other platforms that just kind of expose it faster into wider audiences, etc.

• 41:20Speaker 02

  Yeah, super weird. I wrote a paper back in college on, on the Indian subcontinent and like the 18th century and the British and

• 41:34Speaker 02

  Same story. You had small principalities that were devaluing their currency and it caused a lot of upheaval on the Indian subcontinent. And there are precedents throughout history where these types of things have happened. And I just think that, you know, uh, it's something that we have to pay attention to.

• 41:52Anthony Pompliano?

  I, um, I also think a lot about, uh, one of my favorite documentaries ever, uh, is The Men Who Built America. And, uh, it's the History Channel, right? And they've got, uh, Rockefeller and Carnegie and just all of them. And I forget, uh, who did it, but at one point there was essentially, uh, a war over the equity of maybe it was like Carnegie Steel. Right? And, uh, whatever the business was, uh, let's say it was, just for, uh, kind of illustration purposes, let's say it was Carnegie Steel. Carnegie all of a sudden then went and said, wait a minute, you're buying up stock. And you just started to print more and more stock certificates, right? Like physically print them to then dilute

• 42:33Anthony Pompliano?

  the adversarial action of somebody buying up a stock, trying to get any, uh, controlling stake. And I think about, that happened all the time until investors got smart and said, wait a second, we're going to create an anti-dilution clause.

• 42:47Speaker 02

  Right, right.

• 42:48Anthony Pompliano?

  You cannot kind of maliciously dilute me without, you know, these protections. We don't have that with the currency. We literally have that with equities, but we don't have that with currencies. And it's not a US dollar thing. Like that is just the structure of currencies around the world, right? 100 plus currencies around the world. They're all structured the exact same. And so it's a very unique thing that I think currencies specifically get a treatment that maybe other types of assets don't get. Whether because, uh, they're physical in nature, right? Uh, because they're really hard to produce. Uh, or there's, you know, investor protections that, uh, you know, just don't allow for it, right?

• 43:27Speaker 02

  Yeah, I think this just goes back to a comment that I made earlier, which is like, what can we do? What can organizations of authority do? And it's like, publish clear sets of facts, let people decide. And so again, okay, we're conducting our lives denominated in US dollars.

• 43:45Speaker 02

  And you know, people aren't thinking about that. And as they start to realize that that's what they're doing, I think, you know, they may start to wonder, you know, what are some other structures that could be used? And, uh, you know, maybe they'll come to some other conclusions about, about how they want to do that, how they want to store their wealth, how they want to spend their wealth.

• 44:05Anthony Pompliano?

  Yeah, it's, um, it's fascinating world.

• 44:08Speaker 02

  Yeah.

• 44:08Anthony Pompliano?

  Uh, the, the whole move from centralization to decentralization, I think, is, uh, inevitable to some degree. Uh, there will be a spectrum of, uh, types of decentralization. Again, you may have a hierarchical structure at a company, which you get remote work, all that. And I think one of the pieces, uh, that we don't think a lot about, right? You have experience that most of us don't, which is how do those centralized entities that, it's nearly impossible to see a government, for example, becoming decentralized, right? How do they navigate this world? And some of it may just be they're at a level where it doesn't matter, right? I, I always joke and say, uh, higher education, probably in trouble, right? From a long, you know, trend perspective.

• 44:51Anthony Pompliano?

  Ivy League schools, probably going to be the last ones left, right? Like, like they're the, they're the ones who probably don't have to worry so much about the disruption. It's the, you know, tier two or tier three school in the middle of nowhere that like, writings on the wall, you know, you probably should be figuring out how to disrupt yourself now. And so it feels like governments are similar to the Ivy League schools where just, they're going to be the last ones from a centralization standpoint that, uh, that have to worry about some of this.

• 45:18Speaker 02

  I think that, you know, in many cases, governments have been this like dominant power paradigm that we've lived with for humanities lived with for thousands of years. And so on some level, there is a need, right? There's, you know, collective defense, uh, there's, you know, propagation of law and order. And so as I think about like what the future of these types of power structures looks and feels like, you know, I, I think to some like great sci-fi authors that, that have been talking about these types of things for years. Neal Stephenson. With the Baroque Cycle and Cryptonomicon and other, other books in that vein, thinking

• 45:59Speaker 02

  about like, how do those types of organizations evolve? How do governments evolve? Like, what are going to be the things that, that peoples are going to demand, ask, you know, of their governments to do? And I just think that decentralization offers really interesting potential futures. And so, look, it's going to be, it's going to be a brave new world.

• 46:19Anthony Pompliano?

  Yeah. What are you most excited about with crypto, kind of moving forward? Is there like one or two things that you're like, hey, when this happens, that'll be really big? Or something that you're specifically kind of watching?

• 46:30Speaker 02

  Yeah. On the security side, Balaji Srinivasan put out a really interesting tweet storm a few days ago, talking about the future of security, talking about bug bounties and, and things like that. And just as an example, a bunch of friends and I have a small little like group chat that we, that we run. And we just started talking about the mechanics of what it's going to look like when we can build these, what now seem like very novel security systems. And one fact sort of stood out at me, which was that, you know, right now, due to the complexity of blockchain technologies, there's sort of like a limit

• 47:13Speaker 02

  as to what types of file sizes can usefully be stored on chain. And that in and of itself is sort of like a bounding condition around like what we can actually do from a security perspective. Because right now, a lot of security technology relies on a lot of information flowing across a system. And it was this moment where I think, at least in this little chat, a bunch of us, and you know, there's some crypto people in there, there's some security people, some venture people in there. And, you know, my reaction, I put this in the chat, is that, you know, this must be what it felt like 20 years ago, when people were looking at the internet. And they were like, oh yeah, of course, at some point, there

• 47:54Speaker 02

  will be like, hi-def, full motion video, live streaming from like, you know, device A to device B over the telecom network. And we're just now getting there, like, you know, seventeen, eighteen, nineteen years later, where you have like 4G LTE, 5G technology. And yeah, now you can get like livestream 1080p on your, on your phone. And so thinking about like, the, the useful file sizes that can be, you know, deployed or utilized over these, you know, distributed systems right now, I think we're, I think we're gonna need to see the same type of growth that we've seen over the past 20 years in terms of like, ability to handle complexity, file sizes, transmission rates, things like that. But like, we'll, we'll end up getting there.

• 48:39Speaker 02

  Like, Bology's vision is absolutely one, one type of future scenario where, and what he envisions is, software being published on-chain, and people who identify weaknesses in that software, through, you know, whatever, and nobody's created these oracles yet, but it's like, you'd build oracles that would like, validate that this person, this researcher, had found a weakness in the system, and then immediately was essentially like, paid out a bounty for identifying that weakness. And then people can see, oh, the, the team that's maintaining this, you know, this protocol has fixed the weakness that was identified, and all that happening very quickly in, in near real time. And I think that that's

• 49:23Speaker 02

  like, a definite possibility, but it's gonna take a while.

• 49:26Anthony Pompliano?

  Yeah. It's, um, it's very interesting how the world gets rewired when you take what is probably the core mechanism, which is centralization, because we've pursued efficiency, low cost, you know, the corporation itself, right, is kind of the, the ultimate manifestation of centralization. And then you start to unbundle it again.

• 49:52Speaker 02

  Yeah.

• 49:52Anthony Pompliano?

  Right? If you kind of think there were no multinational corporations, you know, thousands of years ago, for the most part. It was a bunch of merchants all over the place, right? They were all local businesses. And then you got that centralization and are we about to go through the unbundling? I don't know, but I don't think anyone actually knows exactly how this plays out. But it seems like we're probably more likely to head that direction than not.

• 50:17Speaker 02

  Yeah. Yeah, no, I think you're right. And I'd be remiss if I didn't mention one of my favorite people writing on this topic. Entrepreneur in his own right, very successful, Jordan Hall. And we can put some links to some of his writings in the, in the show notes as well, but Jordan's been writing really interesting stuff for many years on like, what might the implications of these things be? And again, I think offers compelling visions of the future.

• 50:42Anthony Pompliano?

  Yeah, that's awesome. Before I let you go, three questions for you that you get to ask me one. What's the most important book you've ever read?

• 50:49Speaker 02

  Cryptonomicon.

• 50:51Anthony Pompliano?

  Why?

• 50:54Speaker 02

  It tells a story of what happens when information transforms from one state to another.

• 51:04Speaker 02

  And I think that's in some way, shape or form, what's happening now.

• 51:08Anthony Pompliano?

  Interesting.

• 51:08Speaker 02

  And so Cryptonomicon is these like, for, for those folks that haven't read it, first of all, they should read it. But it's these two stories told, one during the Second World War, and it's kind of sci-fi. Neal Stephenson, Second World War, and then this like, and he wrote it in, you know, before, I think he wrote it in like 90, in the late 90s. But then he tells the story of the emergence of a cryptocurrency in like, early 2000s. And the characters in both timelines are like the children of the, of the Second World War timeline. There's great military stuff in there as well. But in the Second World War timeline, they're talking about this transformation of information. They're talking about cryptography, code breaking.

• 51:53Speaker 02

  And and how information has been transformed from like physical stuff into like digital stuff. And they're discovering like, what does that actually mean? Right? They're like listening for submarines. They're listening for encoded messages and they're turning that back into sort of like, you know, human usable information from digital information back into like physical information. And then that same, you know, that same book in that second timeline, they're taking money and they're turning it into a digital concept. And so in both timelines, Stevenson is talking about like, what does it mean for the transformation of the form of information? And in one case, it's like raw information, intelligence information, military information. In the other, it's like information about value.

• 52:39Speaker 02

  And so I've I've read Cryptonomicon, I think, five times at this point. And it's just one of those books that like, you know, it's really well written. It's super exciting, especially for a military guy. And I love it.

• 52:54Anthony Pompliano?

  That's awesome suggestion. No one's suggested that one yet. Second question comes from our friends at Eight Sleep. I sleep on their thermoregulated bed. I used to sleep like five, six hours. I'm like eight now. I literally got the notification on my phone today. I slept nine hours and 40 minutes last night.

• 53:07Speaker 02

  Yeah.

• 53:08Anthony Pompliano?

  Which life changing, to say the least.

• 53:10Speaker 02

  Yeah.

• 53:11Anthony Pompliano?

  What's your sleep schedule like and how's that evolved over time?

• 53:15Speaker 02

  Yeah, so I, you know, back when I was in the military, it was like five, six hours, you know, like going really hard. And then, yeah, in the past four years, I've I've tried to transition over to like sleep more. And I've definitely been looking at the Eight Sleep mattress. So

• 53:34Anthony Pompliano?

  Fantastic.

• 53:34Speaker 02

  Yeah, the the the influence campaign's working off. Tell Mateo I'm signing up as soon as I move out of DC in the next few weeks.

• 53:45Anthony Pompliano?

  As as Mateo has known, I started asking this question on here and

• 53:51Anthony Pompliano?

  He started laughing. He was like, dude, like one out of every three people has already owned one. Right? I was like, wow. Uh, I think it's just something in the tech community, right? Like there's a product that, uh, the user experience like works for them.

• 54:02Speaker 02

  Yeah.

• 54:02Anthony Pompliano?

  Like, ah, all right.

• 54:03Speaker 02

  I gotta, I gotta do one of those, uh, you know, they've got those bungalows that they're renting out. So like, that'll be the, that'll be the kicker.

• 54:09Anthony Pompliano?

  That is, uh, that is definitely the way to go. Try before you buy.

• 54:12Speaker 02

  Yeah.

• 54:13Anthony Pompliano?

  Third question is aliens. Are you a believer or a non-believer?

• 54:18Speaker 02

  Agnostic at this point. I think that, uh,

• 54:21Anthony Pompliano?

  Were you a previous non-believer and recent information has made you agnostic?

• 54:26Speaker 02

  I mean, look, you've got the law of large numbers and the universe is a big place. So I think, you know, you can come to your own conclusions about that. Obviously there's a lot of excitement today about, you know, videos that people are showing and stuff. And I guess just from, from my personal experience, um, I haven't seen anything definitive. It's been in public. Um, and at the same time, like, one of the things that I just kept telling myself, no matter what job I was in is like, you don't understand, uh, reality. You're only striving to understand reality. And it's like, every time I thought I understood something or like a person's motivation, or like, I think this person did this thing behind the scenes.

• 55:08Speaker 02

  And then once you actually get there, you realize that like reality is much more complex. Right? Like whether it's like crazy advanced technologies that people are working on, or whether it's just like weird, um, you know, camera angles, like, uh, I, I haven't seen anything yet. Um, but what I, what I do know is there's like a lot of strange stuff that happens in the world. Like some of it, uh, I imagine is done by government. Some of it's done by individuals and, um, I'm just more in that, in that mindset where I just think, when I see something that people are saying is this really fantastic thing. I just think, you know, there's probably a bunch of other explanations for what we're seeing.

• 55:49Speaker 02

  And instead of giving myself that really quick, like answer, like, oh, it must be X. I just think, well, you know, there are a bunch of things that it could be.

• 56:03Anthony Pompliano?

  I always go back to they may exist, well, they probably exist, but they're too far away for us to ever come in contact with, right? We just don't have the technology, they don't have the technology, whatever. But also too is the definition of alien, right? Like UFO doesn't mean alien, right? To, uh, uh, we didn't understand gravity at one point, now we do, right? So like that type of stuff.

• 56:22Speaker 02

  Right.

• 56:23Anthony Pompliano?

  Um, but also, uh, it could just be like an insect in the ocean, right? Like, you know, or just, I, I don't know.

• 56:31Speaker 02

  Watch videos of trees time lapsing or like plants over like time lapsing and like they shake, they do this, they do that. And you're like, wow, that's super fricking weird, you know?

• 56:41Anthony Pompliano?

  People who listen to podcasts a lot have heard me talk about this. Do you, do you see the cephalopod intelligence test?

• 56:46Speaker 02

  No.

• 56:47Anthony Pompliano?

  Oh, man. So a cephalopods like a, like a some kind of fish or whatever.

• 56:51Speaker 02

  Yeah.

• 56:51Anthony Pompliano?

  Uh, I'm not an expert on cephalopods, but, uh, they gave it an intelligence test.

• 56:55Speaker 02

  Uh huh.

• 56:56Anthony Pompliano?

  And it had like a higher intelligence than like a young child. And you're just like, okay.

• 57:02Speaker 02

  Yeah, like octopuses that are like shooting out the light bulbs in there. I mean, you've seen those videos?

• 57:07Anthony Pompliano?

  Yes.

• 57:08Speaker 02

  Yeah, you're just like, man, that thing's fricking smart.

• 57:10Anthony Pompliano?

  Yeah.

• 57:10Speaker 02

  Yeah.

• 57:11Anthony Pompliano?

  So I, I don't know. Uh, what, one question you have for me to finish up?

• 57:15Speaker 02

  Yeah, where, uh, where do you think is going to be the first Western country that's going to adopt cryptocurrency? On a day to day basis, like this, uh, El Salvador situation?

• 57:27Anthony Pompliano?

  Like a developed nation.

• 57:29Speaker 02

  Yeah.

• 57:30Anthony Pompliano?

  Um, Estonia, Switzerland, you can see those two. I mean, they just tend to be more forward kind of thinking.

• 57:37Speaker 02

  Yeah.

• 57:37Anthony Pompliano?

  Um, I think that Singapore is interesting. I don't know, like I put them in the developed world, right? Obviously, and, uh, it could go either way with them. Um, so I think those are like three, the big one's gonna be, um, you know, Russia, China.

• 57:58Speaker 02

  Yeah.

• 57:58Anthony Pompliano?

  Like they come out and say like that, that gets more, I think a little bit into the national security stuff.

• 58:02Speaker 02

  Yeah.

• 58:02Anthony Pompliano?

  Uh, but obviously Russia and they, both of them frankly have been talking publicly about de-dollarizing for a while. And, and, you know, so it kind of would fit that trend. Uh, but I haven't given up hope on the United States.

• 58:13Speaker 02

  Yeah.

• 58:13Anthony Pompliano?

  Like Miami coin?

• 58:15Speaker 02

  Do, uh, yeah, so like I, I think that, um,

• 58:20Anthony Pompliano?

  I don't think the federal government is going to go and like the treasury or the Federal Reserve is gonna be like, "We have a great idea. Let's buy Bitcoin and put it on the balance sheet." Right? Like, I don't think that that's gonna happen, uh, next, right? Maybe it happens, you know, at some point, but not next. What I do think, though, is very real, and obviously, uh, the mayor of Miami, Francis Suarez, has been working on it. A couple of other places I know that are thinking about it and working on it, is cities or states doing it. And, um, I'm not the best person to kind of go through all the nuances of this, but, uh, there's a lot of people in the Bitcoin world who have written about kind of reintroducing the idea of, "We live in a republic made up of 50 different states."

• 59:01Speaker 02

  Laboratory of democracy.

• 59:03Anthony Pompliano?

  And the competition actually is playing out a little bit right now.

• 59:07Speaker 02

  Yep.

• 59:07Anthony Pompliano?

  And so, all of a sudden, you could see competition and economic incentives and all this stuff taking over. And then each politician is competing over who's more pro-Bitcoin. And, you know, there's a senator with laser eyes. There's a congressman with laser eyes. There's now a president of a country with laser eyes. Uh, there's a mayor with laser eyes. Like, does that make laser eyes the, like, bar for progress? No. But that's a pretty high, you know, uh, kind of step to take if you are sympathetic to, uh, the asset. And what is actually the most fascinating to me is how much of it is sympathetic to a financial asset versus the ideals and ethos that are kind of, uh, intertwined with the asset? And I think it's actually more the latter.

• 59:50Speaker 02

  Yeah.

• 59:50Anthony Pompliano?

  Right? Is, somebody thinks, "Sure, the asset is great, whatever." But it's the ideas of freedom and democracy and decentralization and kind of innovation and entrepreneurship. Like, that's the stuff that I'm really interested in, and so I want to align myself with that audience. And so, that's a much different thing than just like, "Hey, let's all go buy Bitcoin."

• 1:00:10Speaker 02

  Yeah.

• 1:00:10Anthony Pompliano?

  Right? Uh, which, uh, they're gonna do too, right? But, uh, we'll see. It's an interesting thought process of like, does a city or state do it again? Uh, does a city or state buy Bitcoin and put it on their balance sheet before a developed nation does it? I don't know, right? Like, like, it could go either way.

• 1:00:27Speaker 02

  Yeah.

• 1:00:27Anthony Pompliano?

  So I think that alone, just the fact that we're like, oh, it could go either way, is a pretty big kind of revelation compared to most people just think like, the United States federal government or another country's, you know, central bank. States are good enough.

• 1:00:41Speaker 02

  Yeah. Awesome.

• 1:00:44Anthony Pompliano?

  Where can we send people to, to find you on the internet?

• 1:00:46Speaker 02

  So I'm blogging on my post National Security Council life, thinking about security, industrial control systems, cybersecurity, and then random thoughts at Steinman.substack.com.

• 1:01:00Anthony Pompliano?

  Okay.

• 1:01:00Speaker 02

  And then I'm on Twitter and we'll put the link in the, in the show notes. It's "are dangerous men." I got it back in 2009.

• 1:01:07Anthony Pompliano?

  "Are"?

• 1:01:08Speaker 02

  A R E. It's a, you know, it's a quote from a book.

• 1:01:12Anthony Pompliano?

  Really?

• 1:01:13Speaker 02

  Yeah, yeah. Lawrence of Arabia. You know, I was like a Middle Eastern guy for like 15 years. I was Al Qaeda back before it was cool.

• 1:01:20Anthony Pompliano?

  What is the quote? Do you have it memorized?

• 1:01:23Speaker 02

  Yeah, but it's like, it's kind of worn out at this point.

• 1:01:26Anthony Pompliano?

  Oh, okay.

• 1:01:26Speaker 02

  I don't even want to, yeah.

• 1:01:27Anthony Pompliano?

  All right.

• 1:01:27Speaker 02

  It's, but it's about, it's about people that imagine what the world could be. The dreamers of the day are, are dangerous men for they can, you know, essentially like make things, make, make their dreams reality. And it's this line from Seven Pillars of Wisdom from Lawrence, and it's describing, you know, how he's thinking about, you know, taking on this grand challenge of fighting the Ottomans in the Middle East with like maybe 300 dudes. And he frickin' did it.

• 1:02:01Anthony Pompliano?

  I think the US military understanding of a normal, like everyday infantryman,

• 1:02:10Anthony Pompliano?

  I think you're supposed to believe that you've got the upper hand when it's one of you versus maybe three of the enemy?

• 1:02:19Anthony Pompliano?

  And then as you get, you know, kind of maybe Ranger regiments is like one of five, you know, one versus five. And I remember reading a statistic one time. It was like one, one to 10 or one to 12 for, you know, our most elite forces. And just thinking about like, that's crazy.

• 1:02:34Speaker 02

  Yeah.

• 1:02:35Anthony Pompliano?

  300 to verse a couple of thousands.

• 1:02:37Speaker 02

  It might have been more, but I mean, it was.

• 1:02:39Anthony Pompliano?

  Right, tens of thousands.

• 1:02:40Speaker 02

  Yeah, exactly. Yeah.

• 1:02:42Anthony Pompliano?

  Whole different world, right? And, uh, yeah, it's and hand to hand combat and, you know, no air support or.

• 1:02:48Speaker 02

  Yeah, yeah. Maybe a biplane like every few weeks.

• 1:02:52Anthony Pompliano?

  Yeah. All right, man. Well, listen, thank you so much for doing this.

• 1:02:55Speaker 02

  Yeah, thanks for having me.

• 1:02:55Anthony Pompliano?

  Hope everyone goes and subscribes to the Substack and we'll have to do it again in the future.

• 1:03:00Speaker 02

  Bang, bang, right?