42 - The Global Game of Crypto | Bruno Maçães

🚀 SUBSCRIBE TO NEWSLETTER: http://bankless.substack.com/ ✊ STARTING GUIDE BANKLESS: https://bit.ly/37Q17uI ❤️ JOIN PRIVATE DISCORD: https://bit.ly/2UVI10O 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com http://podcast.banklesshq.com/ 👕 BUY BANKLESS TEE: https://merch.banklesshq.com/ ----- GO BANKLESS WITH THESE SPONSOR TOOLS: ⭐️LEDGER - BEST HARDWARE WALLET TO SECURE YOUR CRYPTO https://bankless.cc/ledger 🚀ARGENT - GET THE MOST SIMPLE AND SECURE DEFI WALLET https://bankless.cc/argent 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith 🤖YEARN - YIELD-SEEKING MONEY ROBOT THAT FARMS DEFI FOR YOU http://bankless.cc/yearn ------ 42 - The Global Game of Crypto | Bruno Maçães Bruno Maçães is a political philosopher, the author of several books surrounding the different types of cultural civilizations that define the globe. Bruno has a strong familiarity with crypto and recently wrote an article called “The Crypto State?” which explored the emergency of a new civilization in Crypto We brought him on to help us understand what’s going on with the geopolitical shifts of the world, and what this means for crypto. Bruno on Twitter: https://twitter.com/MacaesBruno https://twitter.com/MacaesBruno?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor The Crypto State? https://www.city-journal.org/technological-developments-new-systems-of-governance Book Trailer of History Has Begun: https://twitter.com/MacaesBruno/status/1303653609880551428?s=20 The World Game, Bruno's newsletter: https://brunomacaes.substack.com/ ------ Don't stop at the video! Subscribe to the Bankless newsletter program http://bankless.substack.com/ Visit the official Bankless website for resources http://banklesshq.com/ Follow Bankless on Twitter https://twitter.com/BanklessHQ Follow Ryan on Twitter https://twitter.com/ryansadams Follow David on Twitter https://twitter.com/TrustlessState ----- 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 we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case.

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

• 0:12Ryan 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, and how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman. We're here to help you become more bankless. David, banger of an episode. Who do we have on? What are we talking about?

• 0:33David Hoffman?

  We had Bruno Masange, who's a political philosopher and has written a bunch of different books that attempt to characterize the disposition of different parts of the world. And that's why we got him on to the Bankless podcast today. Because Bruno really has his finger on the pulse as to what makes the different parts of the world tick. And so we wanted to get him on so he could share that with us. But also, we wanted to have a broader conversation about the disposition of these different parts of the world and how they are going to relate to a crypto-first world that we see coming. How is Europe going to deal with Bitcoin and Ethereum? Are they going to be adversarial or are they going to be integrative? What about America? What about China? And so the first half of this podcast, we take a decent amount of time

• 1:18David Hoffman?

  to go through each different part of the world and really give it a character, give it a personality. And then we turn to the conversation of crypto where Bruno actually kind of turns it around on us and asks us some questions as how we see the different parts of the world integrating with crypto or being adversarial to crypto. And so Bruno is an absolute scholar and he really does a great job teaching us and carrying you along for the journey. And so this was just an absolutely crazy informative episode that I'm sure you're going to enjoy.

• 1:47Ryan Sean Adams?

  The first part of this is really interesting and phenomenal. But the second part of this, where we start talking about crypto, I think the last 35, 40 minutes or so is just straight fire because Bruno...

• 2:01Ryan Sean Adams?

  Applies his political philosophy framework that we talked about and he applies that to crypto and takes, he asks us some hard questions, to be honest, David, like questions that have been in the back of his mind that quite, didn't quite make sense about crypto. We do our best to answer those and then he provides his geopolitical interpretation of all of this and it's quite a salient perspective.

• 2:26David Hoffman?

  Yeah, really, the first half of the episode was a means to an end to get to the second half of the episode. So you really need to listen to this thing in its entirety. So without further ado, we're going to get right into the episode with Bruno. But first, we're going to talk about some of these fantastic sponsors that make this show possible.

• 2:44David Hoffman?

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• 3:26David Hoffman?

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• 4:10David Hoffman?

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• 4:16David Hoffman?

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• 5:00David Hoffman?

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• 5:45David Hoffman?

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• 5:51Ryan Sean Adams?

  All right, guys, I hope you're excited. Let's get right into the episode with Bruno.

• 6:07Ryan Sean Adams?

  Bankless Nation, we are so excited to introduce you to Bruno Masai. He is a political philosopher and author of several books, including a latest book called History Has Begun: The Birth of a New America. He actually has a really strong familiarity with crypto. He wrote this fantastic... Fantastic article I read a couple of months ago called "The Crypto State" with a question mark at the end. And we brought him on to help us understand what's going on from the political philosophy mindset, the geopolitical shifts in the world and what all of this means for crypto. This is going to be a stellar conversation. Bruno, how are you doing today?

• 6:47Speaker 02

  Pretty good. It's great to be here.

• 6:49Ryan Sean Adams?

  You know, I'm just going to open things up. That's like, this is what we like to do at Bankless is open it up with an interesting starter question. Is crypto a rival to the nation-state from your perspective?

• 7:02Speaker 02

  Yeah, I think it is. You know, there's been an interest, as you can imagine, from political thinkers for quite a while to try to think about what comes after the current state structures that we have, particularly those people who are not convinced that we've reached the end of history. So what's the next big change? And if you're a political philosopher by training, and particularly in my case, a historian of political thought, that's how I started. You're very much attuned to these historical changes. I think if you've brought up in your college and grad school years, reading about the whole tradition of Western, but not only Western, political thought,

• 7:45Speaker 02

  you immediately understand that the changes have been dramatic, radical. You read Aristotle, you'll read Plato, it has nothing in common with the liberal democracy. So I think that's an advantage that one has if you come from that tradition. And you're also very aware of the differences in the way societies organize themselves. I think pretty much everyone has a mental model of this story. Tribes, empires, then the modern state. A huge debate about what is distinctive about the modern state, but we know something is. The bureaucracy, perhaps the element of civil society. Whatever it is, it's very different from other forms. And then you're interested in thinking about, well, what comes after the state as it exists today? And

• 8:31Speaker 02

  There's been different theories about this, different intellectual wagers, let's call it that. A world state would seem to fit with a certain narrative of globalization. Then technology, of course, introduced a very interesting debate about this. And there's been some stuff written about how Facebook, in some respects, mimics the structure of a nation state, a global nation state.

• 8:58Speaker 02

  Zuckerberg himself has been interested in this idea from the very start. I have started to think about this, how you can fit technology into this narrative. And it seemed to me that where the real historical development, the breakthrough, can be found is actually in crypto. Because crypto, and in fact, if you go back to the founding papers of crypto, that's obvious there. Crypto changes some of the fundamental assumptions about political thought. I say in my piece that Satoshi is very politically aware, and I think that's true. It would be possible to try to look at those papers and see them as political philosophy papers.

• 9:39Speaker 02

  What crypto introduces a radical change is in the idea of trust, of course. And trust is the basis of every political structure that's existed in the past. If you move towards a trustless environment, then you're really introducing a fundamental change in the way you think about politics. Now, I don't want to go too far, and all this has to be thought about and tested. But in a way, you could say that the break, if this works out, is more fundamental,

• 10:08Speaker 02

  more essential than even the break from medieval state structures to modern state structures, because they were both based on trust. So that's how I get to that, and I got interested in that. I want to think about crypto, and I needed a convenient framework to think through it. And for me, what really works is this idea, well, perhaps we're creating fundamentally new structures of political power.

• 10:34David Hoffman?

  Bruno, a lot of your work in your library is focused on reorganizing or re-proposing a way to view the world, specifically from a political philosophy mindset. And you have characterized different regions of the world using different political philosophies. And I kind of want to get into your head. Like, how do you draw the world map in your head in ways that other people don't? Like, where are the dividing lines? Is it an east versus west type world? Are we in a developed versus underdeveloped type world? How do you draw the lines of the world?

• 11:11Speaker 02

  Right. I think there's two fundamental elements there that sort of guide my thinking and writing. First, you know, when I was grad school at Harvard 15 years ago, I was already very frustrated with this idea that all you could do as a political thinker was to interpret ideas from the past, but there was really nothing new to create. You know, the Fukuyama narrative, but it takes many forms. And I don't even think Fukuyama is the most important name here. It's much older than Fukuyama, this idea that a liberal democracy is the end of political development. I was very frustrated with that and actually lost interest in becoming an academic in large measure because of that. What I think started happening in the last few years,

• 11:54Speaker 02

  and that's why I, with a renewed passion, turned to writing, which I hadn't done before in my life. I think it's actually now become possible to think about what comes next. It was very difficult 20 years ago. The elements were not there. The material was not there. The mood was not there. But the last few years, the last decade, has really been pregnant with change, you know? And I think that started to happen in 2008. I remember giving a seminar, one of my last professional seminars at a university in 2007, where I was expressing to the students, "Oh, really, there was nothing on the horizon of particular historical significance that one could think about."

• 12:39Speaker 02

  By the way, back then, China seemed pacified and globalization was thriving. And then, of course, 2008, you had...

• 12:50Speaker 02

  You had the financial crisis and since then, every year or every couple of years, you have something that makes you think about whether the current framework is really stable or not. I think those processes have been accelerating. That's how I see the pandemic as well. But of course crypto is part of this. China and the new China, much more aggressive, much more self-confidence is another part of that. So for someone like me who was waiting for this moment, then I think when it came, you really want to grab it. That's the first element. The second element is, you know, I like to think of myself as, in some respects, a traveler. It's my favorite thing in life. Now put on hold, unfortunately. And if you combine a philosophical interest with traveling,

• 13:35Speaker 02

  I talk about this in my first book, then you're necessarily interested in trying to explore the deep differences between different parts of the world. I don't believe that you can be a good political thinker without traveling. You simply don't understand the differences. You assume the whole world is the same. By the way, I also don't think you can be a good traveler if you don't, if you're not a political thinker in some way, because again, you're gonna miss what is interesting about a society. And what I love to do is to go to a different part of the world for an extended period and really try to explore how different societies are organized, what makes them tick, how they operate, how they work. Try to build a model of that society from scratch,

• 14:18Speaker 02

  without priors, without preconceptions. And that's, you know, my favorite thing in terms of intellectual work. And by the way, it's my favorite thing in terms of intellectual work because it combines with things that are not work. Meeting people, talking to people, visiting places, tasting the food and so on. So it's great intellectual work. And what I've been trying to do in my books is precisely that, is to try to think of the world as being divided into, let us call it, different civilizational areas. And what I mean by that, what I mean by civilization, very roughly, is different constructs of looking at the world.

• 14:58Speaker 02

  Which are really fundamental because they they involve everything about about life, everything about the way you approach the world, you look at the world, you think, the feelings you have, the way you interpret facts around you. And I'm fascinated by this idea that in fact, the world is much richer than one might think at first, and that different parts of the world have to be interpreted on their own terms. So my first book is essentially an attempt to um to make a call for this approach and to abandon the much more natural approach for us in the West to think that everyone is converging to our model. If they haven't converged, it's because they failed or because they're slow in the process. But the whole world is essentially converging to the same model.

• 15:42Speaker 02

  Now, I don't believe in that, and and one reason I don't believe in that is that I actually think human beings want to find their own path. And they're not convinced by the idea that they have to copy others. So those two elements, I think, are present in all my work. So you find both a great attraction to the future, to what comes next, and a great attraction to the to difference, to what is different from us. Gets me in trouble a lot, the second element, by the way. Then I only realized in the last couple of years, the pressure for uniformity to ascribe to our values is so strong. If you try to understand Turkey or Russia or China on their own terms,

• 16:26Speaker 02

  you're immediately accused of the worst possible things, you know? You you might even be accused of being paid by those governments to to make to make that effort, as if they care about that, as if they care about some some foreigners trying to understand the cultural path of China, as if the Chinese government would be interested in that. Or you're accused of moral torpitude in some way that you don't believe in our values. So that helped me in the last two years, those kind of reactions, to understand why it doesn't happen more. Actually, the pressure not to do it is quite quite significant.

• 16:58Ryan Sean Adams?

  It's so funny to hear you talk because there are so many analogies and analogies situations that I think we see on the on the Bankless journey within crypto, right? So like, I guess a few of your points, liberal democracy not being the end of history is super interesting because that obviously poses the question, which I hope we get to, is what supersedes it? But your other point about traveling, how can someone comment on a civilization area without having been immersed and engrossed in that civilization area? We say the same thing at Bankless, basically. It's like, if you want to understand a crypto system and even the political philosophy of that crypto system, you actually have to use it.

• 17:40Ryan Sean Adams?

  So like, the best way to understand Bitcoin is to immerse yourself in Bitcoin culture and buy some Bitcoin. The best way to understand Ethereum is to start using DeFi protocols and actually like, understand what they're about and why they're useful and why various ones work and others don't. I think that's a super analogous to what you're saying. And we do want to get to crypto in a minute, but I think it's important for our listeners to have this mental model of the civilization areas that you were mentioning. Like, we want to understand what's happening in the world, I think, Bruno. And what if we sort of take it by region? Because that's sort of what your your books seem to do.

• 18:23Ryan Sean Adams?

  Can you take us through the important things we need to know with some of the the major, I guess, civilization areas or regions of the world? Maybe starting with Europe, and then we could take America and then China and get to some of the other places. But but tell us, what do we need to know about what is changing in Europe these days?

• 18:43Speaker 02

  Right. So that's the kind of exercise I've been trying to do, a book for each of these areas. It's pretty tough, and it will take a couple decades to complete, but it's a good thing you asked me. And by the way, you have to be open to change your ideas about what you think is fundamental about these different areas. And what is difficult is that you actually want to go in depth, you want to find the active principle of each of these civilizational areas. But obviously, that's very difficult and very prone to error. So you always have to be open to to revisions and to change your mind about this. But when I think about Europe... And in some respects, it might even be more difficult for me to think about Europe, because you're not outside.

• 19:27Speaker 02

  And sometimes it's more difficult if you have to look from the inside and if you're brought up in that intellectual environment. But I think something seemed important to me. So obviously, Second World War, fascism experience and the Nazism experience is determinant here. I like to talk about, I'm trying to write something actually today, the mystery of fascism. And what I mean by the mystery of fascism is, I mean, no one saw it coming. You had the narrative of the Enlightenment in Europe, which was moving in the opposite direction. Commerce was supposed to make people tolerant, open to difference.

• 20:08Speaker 02

  The Enlightenment was supposed to be indifferent to religious difference or even to racial difference. Many Enlightenment thinkers, societies were supposed to be more rational, less based on passion or hatred or other forms of political animus. And then why do you get the fascism experience? And to be honest, I haven't found a good explanation of this. I'm reading a book that was praised a lot, just came out a couple of months ago, called The Perfect Fascist, by an American historian, an Italian historian. And one of the reasons I was interested in the book is that it actually is not a theory book.

• 20:49Speaker 02

  It's a history of one of the most important political men around Mussolini and his American Jewish wife. And so I thought, you know, it's an interesting experiment here. We just go deep into the life of that individual and try to see what moved him towards fascist ideas and towards Mussolini. The book has been quite disappointing so far, but still, you know, that remains a question that hasn't been answered. It's really fundamental for European consciousness, even today. When I look at the European Union, I tend to interpret it as fundamentally a response to Auschwitz. In the sense that the values that are foundational for the European Unions are

• 21:35Speaker 02

  the exact opposite of the Nazism experience. So a certain cosmopolitanism, which is present there, technocracy, the rule of experts, no borders, nationalism is considered a political evil. So you build a project that is supposed to move you beyond fascism, respond to fascism and prevent it in the future. To the point where, and if I wrote a book about Europe, which I will do at some point, to the point where I think politics at the European Union level has become a form of algorithmic politics. You build very sophisticated algorithms. And the logic of that is, again, the logic of creating political structures that are

• 22:18Speaker 02

  completely imperious to the rule of the individual, of the leader, of the viewer. Completely impenetrable to political arbitrariness because they are, in fact, algorithms. They operate by themselves without human intervention. And if it's without human intervention, then you're safe from the fascist temptation or fascism drift. By the way, fascists themselves, the Italian variety and the German variety, were very interested in recovering this human element. They thought that the Enlightenment political model was too mechanical and they wanted to recover the element of human decision-making.

• 23:02Speaker 02

  Now, when you get to the European Union, you actually go to the ultimate conclusion in this process of making political rule mechanical. So all over the European Union, you see procedures that are automatic, procedures that are based on fundamental algorithms. It could even be about relocating refugees. It could be about budget rules. It's, by the way, one thing that is criticized about the EU all the time. That is not flexible, that is rigid, mechanical, automatic. Let me give you an example now with the pandemic. President Macron, the other day, announced that the restrictions will remain in place, and they are pretty harsh in France right now.

• 23:45Speaker 02

  They will remain in place until the number of daily COVID cases falls below 5,000.

• 23:52Speaker 02

  Why would you do this? Right? Actually, you have to think ahead to the future. You have to project. You have to plan. You cannot create a structure of political decision maker that reacts to data from the past, whether yesterday was 5,000 or not. You have to make political decisions that anticipate the future. But in Europe, that's so difficult. Because the question everyone asks immediately is, who are you to make these political decisions? Where does your legitimacy come from? And democracy is actually not an answer to that. So what I see in Europe fundamentally is this, is this hyper rationalism, where in fact you have a form of artificial intelligence

• 24:36Speaker 02

  in charge of political societies.

• 24:38Ryan Sean Adams?

  So, so, okay, so these moves, it's almost as if you're describing a centralized bureaucratic, but almost algorithmically bureaucratic sort of Europe that has, I guess, counteracted or gone to the polar opposite of fascism. Does that serve to defend Europe against a future fascism? Or do you think it could actually have the opposite effect? What are sort of the strengths and weaknesses of Europe in the 2020s as it's set up right now?

• 25:09Speaker 02

  So that's a, that's a very important question. And what we've, what we've seen so far is the problems that the EU is facing constantly since 2009 are very much related to this inability to respond to the external environment. Think of the EU as a very sophisticated machinery, really sort of high tech, which precisely is very vulnerable to environmental disturbance. It could be, you know, high tech machinery that is very vulnerable to thin sand in the desert. So anything that comes from the outside and that is not pre-programmed into the algorithm is a form of disturbance.

• 25:51Speaker 02

  It could be China, it could be a financial crisis in the US, it could be refugees, it could be Turkey, it could be Russia invading Ukraine. Every time something unexpected from the external environment takes place, the machinery grinds to a halt and then it has to be repaired. But what is interesting is that it's repaired and then set to work automatically again. There hasn't been so far any great interest in replacing the machinery with the human beings making decisions. Now we're in the middle of something similar, both with Covid, but more recently the last week, unexpected political decision made in Hungary and Poland to veto the recovery plan that was supposed to start very soon.

• 26:34Speaker 02

  Again, you see that political decisions, if they are sovereign political decisions, are a source of great disturbance to the machinery. Now, the question is, is this a process in a certain, is this a step in a certain evolutionary process? Could the EU become better at this? You could try to make an analogy to how robotics is developing. You also want your robotics to be able to deal with an uncertain external environment. You want to build better algorithms. And particularly as you move towards forms of robotics that interact with the external environment. So one solution would be, okay, let's keep on this path

• 27:15Speaker 02

  and let's try to build a EU that is even more sophisticated along the same path. Another solution would be you could try to remove some areas from this algorithmic decision-making and make it more human-based, which by the way is also something that is done. You know, I would be attracted to the analogy where you think about the EU as a self-driving car and then the question is, do you keep working on these algorithms? Or do you actually create a hybrid vehicle where some parts are automated but not everything? And where there's still a role for human beings? That could be a model for the EU. Or then, you know, perhaps the whole machinery will break down at some point and then you have the return of sovereign, human-based decision-making,

• 27:59Speaker 02

  which of course will be very disturbing because That's what we thought we have gotten rid of.

• 28:03Ryan Sean Adams?

  It's a fascinating portrait of the EU that you're painting. It's like, from the way it sounds, it's not at this stage very, what Taleb might say, anti-fragile against these kind of major events in history, whether these are geopolitical events or even technology change events. But let's turn our focus across the Atlantic and talk a little bit about America. What's happening in the United States right now? What do we need to know about America over the next decade?

• 28:33Speaker 02

  So that's the topic of my latest book. And it's almost the exact, the reverse of what I've just described about the EU. By the way, just to conclude, what I was describing is the European Union. Now, you have the national states, which are different. What's been happening in Europe is, in fact, this combination of completely automatic decision-making at the EU level and then still human-based decision-making at the national level. And when nation-states think they are ready to move decision-making to the European level, then it's automated. To become a EU competence means to become automated, in my view. But what's happening in the US is almost the reverse opposite of what you have in Brussels.

• 29:18Speaker 02

  Because what you have in Brussels is hyper rationalism, where, you know, everything has been planned, everything has been thought out, everything works independent of human capres and whimsies. In the US, you have a form of post-reality and post-truth. I think there's something quite accurate about that kind of description. In my book, this latest book called History Has Begun, I described the United States as fantasy land, as a country rooted and based on the pursuit of fantasy life.

• 29:57Speaker 02

  On the pursuit of the wildest forms of fantasy life. As if almost everyone is living inside a movie or a novel and conducting their lives as the scriptwriters or the authors of their own story. I think this is present across American society. I think it explains a lot of what Silicon Valley has done. I see it as a form of virtual experience. Even, we're not talking about Oculus Quest, we're talking about everything. I think Twitter, we can talk about it. I see Twitter as a kind of virtual French Revolution,

• 30:36Speaker 02

  where you replicate the experience of being in the middle of political turmoil, but in a virtual way. Of course, I'm talking about the core of Twitter. There are people who use Twitter as they use Instagram to share some photos. But what makes Twitter move and what's turned Twitter such an important institution in American society in particular, as we saw in the election and saw President Trump, is this political element of Twitter. It's a virtual French Revolution because every day you wake up, you can pick a victim, you can agitate a mob to go after that victim, you can virtually execute him or execute her.

• 31:16Speaker 02

  You have the vicarious experience of great political passion, a certain sense of achievement. But this is all virtual. It doesn't take place in reality.

• 31:25Ryan Sean Adams?

  As a Twitter user, Bruno, I can definitely attest to that. There are times where I feel like it's all pitchforks and guillotines. We are in this battle, battle for truth.

• 31:36Speaker 02

  Yeah, but that's the feature. It's not a bug. Some people say, why don't we correct this about Twitter? That's the whole point of Twitter. It wouldn't be attractive otherwise, and that's why I'm there as well, although getting a bit tired of it by now. But I think you see it in what Silicon Valley has done. You know, my working hypothesis would be that if social networks or the internet as a whole had been developed in Europe or in China, it would have taken a completely different form. Because it was developed in America, it did take this fundamental form of virtual reality, broadly understood. Of course, then, other countries have to adapt to it and they modify it to the extent that they can.

• 32:17Speaker 02

  But the kind of impulse coming from America is to think of the Internet and of social networks in this way. I think you see it in politics. We can talk about Trump, but I see Trump as essentially a figure of virtual political reality, a kind of a virtual nationalist figure. But the word "virtual" here is crucial in all these things. And then, you know, delicate thing to talk about, but when I look at American religion, I also see it as a form of virtualized religion, where the experience is very intense, it's immersive. That's the difference with religion in Sweden or many parts of Europe. It is immersive, it is intense, but it's not literal, like in Iran. So the United States, when it comes to religion, maybe religious people would be offended

• 33:01Speaker 02

  by this, I don't mean it in that way, but religious experience in America is something between Sweden and Iran. It is felt in an intense way, it is fully immersive, but it's not taken literally. I remember seeing on one of the cable news channels, a reporter interviewing an old lady coming out of a church back in March, at the height of the first wave, somewhere in the Midwest, I think, and asked this old lady, the reporter, "Aren't you afraid of getting COVID?" And she answered, "No, because I'm covered in the blood of Christ." Now, for a European to listen to this, you know, you get scared, because, you know, in

• 33:43Speaker 02

  our experience, if someone says something like this, it's a potential theocrat, or for many people in Europe who no longer believe in religion, this would raise some questions about how someone in a modern society can believe this. But obviously, I think you have to interpret American religion differently from how you interpret in other parts of the world. There's a virtualized element which is very powerful. It's not like this lady literally believes in this, but she does understand, it's a very sophisticated understanding. She does understand that religion provides for a certain intensity of living, there would not be there without religion. And then, you know, everywhere you look in American society, I see this element of

• 34:26Speaker 02

  of virtualism as being very central. As you saw in the case of the EU and now in the case of America, there's an intellectual wager here. I want to explain everything about American society or about a European society in terms of a single principle. It's been tried before. One author that did this systematically was Montesquieu. It's very difficult to do, but that's kind of the ambition I have. And in American society, I would start from virtualism as a principle that at least if it doesn't explain everything, and it doesn't, it explains what is distinctive about American society compared to other societies.

• 35:02Ryan Sean Adams?

  So Bruno, what you're describing America as versus Europe is America is a less mechanical, less like a self-driving car, more human sort of experience. But you also use the term like virtual, post-truth fantasy land. Is that, is that healthy for America? What are the prospects for, let's call it the, the American empire, if it's living in a post-truth fantasy land?

• 35:27Speaker 02

  I think, I think you can defend it. I think it's easy to defend. Now, in this world that I'm describing with different civilizational areas, you only have to step outside America and become a European to find lots of arguments to criticize it. And Europeans are very good at this. But if we try before we do that, to stay with America and try to understand it from within, I think it can be defended. And there would be two basic arguments. First, contrary to what many people say, and sort of Europeanized intellectuals in the US, many of them actually Europeans, political truth is not such a good thing.

• 36:04Speaker 02

  Truth in politics and facts in politics are very dangerous and very problematic. So I keep reading that the, the rule of fiction is very distinctive of totalitarian movements. Now, that's not true at all. Sometimes Anna Holland is quoted in this context. I don't know if she ever said this, I don't think she did, but if she did, she was wrong because when you look at Nazism or Sovietism, what distinguishes them is actually the attempt to subjugate human beings to a certain understanding of truth.

• 36:42Speaker 02

  And that's why they are part of the European tradition that I described earlier.

• 36:47Speaker 02

  What does Nazism do? Comes up with a concept of biological truth. There are races, some races are biologically superior, and so in the end, as Darwin would teach you, they will win out. And you might as well follow the biological truth that you know about. And Sovietism has a certain understanding of historical truth. There are historical forces that point in a certain direction. And this is where human societies are going, and we might as well accelerate the process. So both Nazism and Sovietism, what is disturbing and problematic about them is that they place political truth above human beings, and human beings have to follow it.

• 37:31Speaker 02

  So I'm always a bit puzzled and skeptical when I see this argument that we have to go back to truth.

• 37:38Speaker 02

  Because it didn't work out so well last time we tried it. And by the way, when we tried it with Nazism and Sovietism, it was actually a way to move beyond the relativism of the Enlightenment and the kind of tolerance towards different views and to really inaugurate a period where truth would be in charge. So that's, I think, the first argument that if you want to defend the American solution to the political problem that you could use. And the second argument is, well, fantasy life is not such a bad thing.

• 38:13Speaker 02

  There is, of course, in human beings, this primordial aspiration to pursue their fantasies. You know, you could argue this is what makes us human. Now, it hasn't been possible in the past. If you wanted to live with your fantasies, you usually retreated to a private life.

• 38:35Speaker 02

  You know, you regard it as a form of psychological dissociation or a form of madness. Now, what American society is doing is actually to create the possibility of diminishing the distance between real life and fantasy. And that's a valuable, important aspiration, if you can make it work. It has taken recently, of course, a certain form in American society, which for a European is particularly perverse. You know, I remember during the pandemic, seeing all these videos from people who go into the supermarket and they just refuse to wear a mask. And, you know, the Karen phenomenon, basically.

• 39:18Ryan Sean Adams?

  Right. Oh, my gosh.

• 39:20Speaker 02

  And that's a form of fantasy life taken to an extreme. You want the whole world, as if you are playing a video game or on a quest, and you want the whole world to circle around you and to do as you wish, as if, you know, the whole world adapts to your wishes immediately, as soon as you have them. So I think that's quite typical of American society, and there's a perverse element to it. But there's also an incredibly attractive element, almost irresistible.

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• 42:42Ryan Sean Adams?

  So let's bring the last, I'd say, physical civilization we want to bring into this. And this, I think, dovetails nicely with kind of the American fantasy, because part of the American fantasy, I think, for many Americans is that America is the center of progress and the universe.

• 43:04Ryan Sean Adams?

  You know, America is number one, right? Like wave our flags. There's no other, no other place in the world where you get this level of opportunity, right? And some might argue that that is part of the American fantasy. But let's turn now to China. Because it seems to be the case that China is not so much playing in a fantasy world. It has, it is playing for keeps. It is playing for all of the marbles. If, if you will, it is becoming hyper competitive and has long term plans and strategies in which to supersede American power. What do we need to know about China right now?

• 43:46Speaker 02

  So maybe I have in this case a less organized and more tentative understanding of China. China is, is very difficult for an outsider to, to understand. But, but here are some thoughts. So what, what strikes me about China? I lived there for, for a year very recently and trying to, to pursue this investigation almost on, on a daily basis. What strikes me is, well, the importance of political power. That's really what organizes everything. Xi Jinping wrote an article, an essay recently about what is communism Chinese characteristics? And he said, well, what defines communism Chinese characteristics is the rule of the Chinese Communist Party.

• 44:32Speaker 02

  So what is interesting about that is there's no principle. There's no set of values. There's no ideology, which is kind of the way Americans and Europeans would think about it. There is a source, a seat of power. The Chinese Communist Party is in charge. So you define the source of authority, the source of political power before you actually define what political power is for, or the set of principles organizing out your society. That's difficult for a Westerner to accept. We are quite ideological, quite philosophical. We like to start with, with principles of some kind. So Chinese society is certainly more pragmatic in this radical sense.

• 45:18Speaker 02

  This, I think, goes back to. The Confucian tradition, which was clearly not about finding true principles, but about a certain practice, a certain way of dealing with the world. And then communism dovetailed rather well with that. And of course, the person you usually turn to when you're talking about Chinese pragmatism is Deng Xiaoping, and many of his famous sayings are around this. "Doesn't matter if the cat is black or white. What matters if it catches mice or doesn't catch mice." I think that's a good way to describe this. Or, "The way you move forward is by..." "The way you cross the river is by feeling the stones in your feet,

• 46:00Speaker 02

  not by actually deciding what's the point on the other bank that you want to reach, but actually moving stone by stone and feeling them very carefully in your feet." This is a different way to think about society, and you can pursue it in different directions. By the way, it's also interesting, if we bring in the question of artificial intelligence again, this fits rather well with the idea of a black box. And many people have compared Chinese society to a black box. And I think that's an interesting comparison. And again, what you do in China is you focus on obtaining a certain kind of results, and you modify the input in order to get better results,

• 46:43Speaker 02

  without necessarily being interested in understanding how the process works. I think this has helped China in the last few decades. Maybe one of the causes of the 2008 financial crisis is an excess of economic theory in the West, which sometimes becomes dogmatic. You want to pursue this, you know, you have certain ideas about inflation, or you have certain ideas about how innovation works, how creative destruction works. You have certain ideas how central banks should stay out, or you have certain ideas about the separation between political authorities and economic activity, and so on. And sometimes, these very rigid theories become a problem.

• 47:27Speaker 02

  And China doesn't work like this. China is very open to try different solutions, provided that they work. You manipulate the inputs. If you don't understand why it's working, that's not necessarily a problem. But it's a big problem for us, right? Both on this, Europeans and Americans, we kind of agree. We want to understand how the black box works. And it also reduces your ability to have an impact. If you first have to understand how the black box works. And Chinese will just go straight towards the straight towards the outcome, manipulating certain level of inputs. What impressed me about, about, let us say, the Chinese intellectuals or young people that I met was they have this understanding of Chinese society.

• 48:12Speaker 02

  They don't know exactly how everything works. They test, they probe. You know, I'll give you an example. Remember dinner in Beijing with the important journalist? A rather independent one, and I take seriously his aspirations to be relatively independent. And his outlet is private. But he's, of course, subject to political control. And what he was telling me is, well, you don't know. Before you try something, you don't know. So you probe the beast. You publish something, you see the reaction, maybe you'll get away with it. I think it's worse than that in China. And it's a source of great stress for every ambitious Chinese entrepreneur, intellectual or journalist.

• 48:55Speaker 02

  If you try something, it could work incredibly well. And you could move up very quickly. Or it could work very badly and you could end up in jail. And you're never quite sure. And you have to try the whole, whole life is a gamble. So to give you an example, it's a famous photographer that went out and took some photographs of Chinese AIDS patients.

• 49:21Speaker 02

  And I'm sure many of his friends, I can't remember his name, many of his friends, I'm sure, advised against it. It seemed an incredibly imprudent thing to do back fifteen years ago or twenty years ago. Well, it worked out very well. Authorities actually liked it. Perhaps unexpectedly to many people. You wouldn't have expected that in advance, that they would like to have some of the fundamental problems of Chinese society and the way they were and addressed, exposed in public. He actually became internationally famous as well. Well, two or three years ago, he repeated the trick. He went to Xinjiang and he took some photographs there of what was happening there and he hasn't been heard about since. Chinese life is a lot like this. It's the black box.

• 50:06Speaker 02

  You never know in advance and you have to probe to try. But if you're ambitious, you also have to probe. That's why Chinese society can't be compared to Soviet society, let us say, where I think the result of political authoritarianism was that everyone was extraordinarily cautious and didn't try anything new. That's not the case in Chinese society. You probe, you try, sometimes it works, other times it doesn't work, but it's the only way to move up if you want to move quickly is also to try some unexpected things. This, by the way, is the way to read op-ads in Chinese society. Many people are cautious and repeat the official line, but every now and then, there's someone

• 50:51Speaker 02

  who takes a big gamble and says something unexpected and sometimes it worked well for them. So you actually, in case of China, can't dismiss everything that appears in the newspapers because sometimes it has not been controlled in advance. And I think also explains why there's some dynamism about Chinese society, which has been very puzzling for Americans in particular, because I think many of the people in DC are still operating under the Cold War model and they think about China as the New Soviet Union. But it isn't the New Soviet Union. Let me go back to where I started, because when Xi Jinping wanted to define what is communism with Chinese characteristics, he didn't come up with twelve principles.

• 51:36Speaker 02

  As the Soviets would do, or you know, as Trotsky or Lenin or Stalin would do, the twelve principles of communism. He just said communism, Chinese characteristics is the rule of the Chinese Communist Party. Now, what will the Chinese Communist Party decide? You're not quite sure before it happens. It's incredibly flexible and attuned to the historical moment. Political power in the moment is what I think defines China for bad and good.

• 52:06Ryan Sean Adams?

  But it is likely that the Chinese political parties will optimize, political party that is, will optimize for pragmatism. And I guess as you look at these civilization areas, Europe, America and China, which is the best positioned in the decades to come to accrue some level of dominance?

• 52:31Speaker 02

  You know, my last book I argued was. I had tried to describe how powerful contemporary China is in my previous books. Again, getting in trouble because you know, there's this intellectual environment now where if you're describing how Chinese, the Chinese economy and Chinese society is actually quite effective at producing some positive outcomes. You're not necessarily praising the regime because by the way, some of these outcomes would not be regarded positive by us. Let us take the case of the pandemic where individual freedom was trampled upon. And we can talk about that a little later. But in terms of the outcomes that the regime decides,

• 53:15Speaker 02

  the country is able to reach them and deliver them on a consistent basis. And it's organized around a single political authority. And that doesn't seem to be a significant organized resistance yet to that single political authority. So I was just describing as a matter of fact, not as a matter of value. Whether you like it or not, but in fact, you may actually describe a very powerful and efficient China as a way of warning everyone else. If you don't like how Chinese society is and how it works, then you should be, you should be very careful and very afraid because it is powerful and it's not collapsing next year. As you know, many analysts are saying.

• 53:58Speaker 02

  So I did investigate that possibility in previous books, and I think particularly my book on the Belt and Road gives a very objective picture, which has resisted very well. The book came out already three years ago. There are many books three years ago saying that China would collapse before 2020. I'm not going to give examples, but there are many books. And mine said that China would would do well for the foreseeable future. And you know, in January, February, I was saying that China is going to respond very well to the virus and other countries in the West are going to be in trouble. So I think it's it's resisted well the test of time so far. But actually, in the in the most recent book, I sort of come out defending that American society still fundamentally is in a better position.

• 54:43Speaker 02

  And one of the reason is, one of the reasons is, I think, this precisely this

• 54:50Speaker 02

  ability to unleash the energies of creativity, of fantasy, and also a certain ability to to change. You know, what is remarkable, let us say about the present moment is, people ask me all the time, is anything going to change with Biden? Well, if you're talking about the structure of the global system, not a lot is going to change because it changes slowly and because the US is not as powerful as it was. So it cannot command changes in the global system. But if you're talking about the level of symbol, language, and the level of storytelling, the change is dramatic.

• 55:30Speaker 02

  So you go from Trump to almost an anti-Trump, who's going to be talking about the opposite things that Trump talked about. He's going to be talking about climate change all the time, and he's going to be talking about working with Europe all the time. So American society has this incredible ability for sharp turns, which should not simply be impossible in Europe and China. I think that's that's a quality, that's an that's an advantage.

• 55:54Speaker 02

  And I also expect American society to evolve towards a much greater curiosity about the rest of the world.

• 56:03Speaker 02

  And potentially more open to cultural difference than either China or Europe are. China, Europe are very convinced that they have the best model. I think the new America that is developing now. Where neoconservatism is in crisis, where Americans are not quite sure anymore about what is exactly the best model for society to organize itself, this sort of crisis of nihilism that exists in America today. I think it could be interpreted positively as a way to being open to different possibilities into the world.

• 56:40Speaker 02

  I see that more in America than I see in Europe, India, or China, where really this evangelical appetite is very strong. So I'm hopeful about America, let me put it that way.

• 56:53David Hoffman?

  Bruno, I recently wrote in an article in the Bankless Newsletter, a line where I said, "The world seems to be falling apart at the seams." And we've taken our time to go through some of the regions of the world. And you've described your perspective on their dispositions, right? There's an American disposition, there's a European disposition, there's a Chinese disposition. And one of the reasons why we've taken our time to characterize these dispositions is because we want to get to the inevitable question as to how do these different dispositions play with crypto? How do they interact with a crypto world? Because there's plenty of political implications with crypto as well. But before we get to that point, I want to ask, are these the divisions? Are these seams between America, Europe, and China?

• 57:38David Hoffman?

  The seams that we see being stressed right now under this current world order that seems to be highly unsettled? The world seems to be really unsettled right now. We seem to be moving into a chaotic state. Are these the divisions that we see being tested right now? Or are there other divisions that we need to be paying attention to as well? And maybe are these contributing to the disorder and chaos that we see in the world right now? What's your perspective on this?

• 58:06Speaker 02

  Right, I think this is a main cause, that you have this radical difference between different regions of the world, and they are not converging to the same model. They have all become very self-confident. They are all committed to affirming their way of seeing things and doing things. So there's an inevitable clash between systems. By the way, in this case, the bloc that has recognized it has been actually the European Union, that published a document a year ago saying that China is a systemic rival. So this idea of systemic rivalry, idea of a rivalry, a competition between different systems, is important.

• 58:47Speaker 02

  You have a world that is radically new in the sense that it is a technological world with multiple poles of power. And I think that's the first time it happens. We had a world with multiple poles of power before, but fundamentally before the modern age. You have to go back to the 15th century, have the Ming Empire, Ottoman. You have the start of the Mughal Empire in India, you have the Absburg Empire in Europe. So you have multiple sources of power, but they are separate from each other, distant. They are not daily involved in the affairs of each other.

• 59:30Speaker 02

  And one of the reasons they are separate is that technology still is not a fundamental force. Then with the modern age, you have fully technological societies in the process of technological development, which tends to accelerate. But it just so happens that when technology enters the stage, you have a relatively more organized world because technology enters the stage essentially in Europe. So Europe takes over the world, develops colonial empires. But the rest of the world has essentially to follow suit and it has essentially to subordinate itself to European power.

• 1:00:12Speaker 02

  So what happens now in the 21st century is that you combine these two worlds that I just described. A world where technology is everywhere and constantly accelerating, but where power is divided between multiple poles. That's a world you have no experience of and it's a world potentially very dangerous. You have these gigantic civilizational spaces which are powerful, which are confident that they control technological forces, are confident that they can actually control the technologies of the future. But they are very different among themselves and they are in competition and they are on the same level of power distribution. That's very clear now, you know, if we stick with the three we talked about.

• 1:00:54Speaker 02

  European Union, United States and China are, when it comes to GDP, within the margin of error. Let me put it that way, the differences are so small that you can no longer affirm your power unilaterally over the other blocs. Redically new and very dangerous world where everyone is as technologically advanced as everyone else and power is divided. We really haven't had anything so potentially chaotic as this. So you have reasons to be concerned, obviously. Your second question, no, we couldn't, if you wanted to have a full analysis of the situation today, we would have to add a number of other actors.

• 1:01:37Speaker 02

  Certainly Russia, certainly India, Japan. We would have also to be interested in Turkey and what's happening in Turkey. Also the development of an autonomous, sovereign, self-confident civilizational space in Turkey as well. So it's even worse than we've described it so far because it's more complex and the pieces are actually more numerous. And change is happening in all these regions as we talk. On top of everything else, as if this is not enough what I've described so far. We now seem to have another actor which has joined the stage. Because so far we're talking about a system of states or civilizations in competition. But with the pandemic, when I think about what the pandemic brought that is new, you have a new actor.

• 1:02:22Speaker 02

  And that's, you know, we can call it the environment. Dangerous environment, an aggressive, dangerous environment, and it's not going to go away. We didn't, we weren't particularly aware of it. When international relations scholars talked about world politics, they talked about a system of states. And the threat came from other states. I think what the pandemic brings that is new is that the threat actually came from the external natural environment. And this condition is not going to go away because after the pandemic we'll have other pandemics and then we're going to have climate change, which will reproduce that model very precisely as well.

• 1:02:59Speaker 02

  So it's a new world, completely new and extraordinarily chaotic compared to what had before. So we have a genuine system of states rather than having an organized hierarchical hegemonic West. And on top of the system of states, we have a threatening, dangerous external environment.

• 1:03:17Ryan Sean Adams?

  So Bruno, this new challenger that has entered the game, right, with the external environment, as you mentioned, it presents challenges to the nation-states, which many see are sort of cracking at the seams already, but also a new hero has kind of entered the game, at least we think so. And your articles seem to indicate that this could be a possibility too, when you talked about the crypto state. Let's turn our attention to talking about maybe what we might call the crypto civilization. Is it too early to talk about what the successor to the nation-state might look like?

• 1:03:57Ryan Sean Adams?

  And could that successor be something digital, something like a decentralized nation like a Bitcoin or Ethereum? What's your take?

• 1:04:07Speaker 02

  Well, my thoughts on this are very tentative, and I have lots of questions for you guys. But let me throw some thoughts on the table. So first of all, what I was interested in my piece was, my recent piece on crypto, was, well, we look at all these powerful blocks operating in a dangerous external environment. Are we still missing something? It's already a very complex picture, but are we still missing something? And it seems to me that if we are really in the middle of radical historical transformation, then we shouldn't assume that the most powerful state in the world, the United States, is going to be replaced by a state that is organized in fundamentally the same way.

• 1:04:52Speaker 02

  A modern state with a bureaucracy, with an army, with a president, with a political authority, and so on, right? The principles activating the Chinese state might be very different, but it's still a state like the United States. Isn't there a chance, actually, if we are in the middle of such important transformation, and also technological transformation, that both China and the US will be superseded by a radically new kind of state? And we've seen that in the past, in history. Certainly, a tribe was completely different from the state that we have today. Bureaucracy is not something that always existed. And other structures of the modern state are fundamentally different.

• 1:05:32Speaker 02

  So is it possible that we are on the cusp of actually more radical innovation when it comes to state structures? And it seemed to me that crypto is clearly where this can at least be discussed and theorized, even if your final conclusion is that it's premature or that it's not going to work, but it can be theorized. I remember something that Peter Thiel told me at once, that really Bitcoin is the only, I can't quite remember his exact words, but you know, if you believe in the sort of great men and great women theory of history,

• 1:06:09Speaker 02

  where completely new unpredictable innovation is introduced into human history. Over my lifetime, I think probably you'd have to say Bitcoin.

• 1:06:24Speaker 02

  I don't quite see anything else. Everything else is development, is evolution. But Bitcoin comes out of nowhere. Just a paper, a nine-page paper that is thrown into a message board like many other message boards. And just a few years later, look at what has happened. And look at the enormous amounts of wealth that are traded every day. Look at the value of Bitcoin, you know, that if I bought some Bitcoins in 2011, if I have kept all of them, I don't even like to think about that. Now, how did this happen, right? This is kind of has to be thought about. And I'm puzzled that so much talk about Bitcoin,

• 1:07:08Speaker 02

  but there hasn't been the kind of really ambitious attempt to place it in a larger context. Something really important is happening and we don't quite know what it is. Now, what I think is interesting about crypto and Bitcoin is it's not just about the technology, right? Because there's usually some attempt to think about some of these changes as being about digital. You know, Facebook just makes things that happen in the real world digital. But if that's true of Facebook, it may well be true of Facebook. Just, you know, life was digitized. It's certainly true of, let us say, you know, books have been digitized.

• 1:07:52Speaker 02

  I don't quite see a radical change there. It's just a book happens to be in digital form. But Bitcoin is not that. In Bitcoin, there's an idea. And then, actually, the digital technology is the way to make the idea work. It's not the other way around. And that's, I think, what explains the radical innovation. Something completely new entered the world. And it doesn't happen all the time. It's extremely rare from the point of view of previous history. And the idea, when it comes to crypto, is

• 1:08:23Speaker 02

  I think that different ways to think about, certainly that you can eliminate trust from social activities.

• 1:08:33Speaker 02

  But also, in my piece, I'm interested in this. I couldn't quite develop it there. That, in fact, it's a pure a pure record of history of time. Because what Bitcoin does is to replace the human authority with just a perfect record of events. And the record of events is the authority. So rather than having someone tell you, yes, he is, X is married to Y, you actually have a completely inviable record of events. And everyone can go and check that X is married to Y. And you don't need someone to tell you that.

• 1:09:14Speaker 02

  So in sort of direct access to social activity and social reality without any intermediary. Anyway, any way you think about Bitcoin, the change is quite radical. And the possibilities it opens are enormous. Now, I have many questions about how this is gonna work. And let me put two questions on the table. And then, and maybe you guys can discuss them as well. First of all, you know, I've been curious since the beginning, since I started thinking about Bitcoin, about the idea of

• 1:09:46Speaker 02

  Well, it just seems that we have a certain problem here in the sense that if Bitcoin is replaced by something else, then this sort of perfect universally accepted record disappears. If you have another cryptocurrency or another crypto technology. And that's obviously an ever-present threat. Isn't it the case that Bitcoin has to remain the only one? Because otherwise it loses its inace capability. That's my first question for you guys and how do you solve that? And why has Bitcoin survived and not been replaced by actually better technology?

• 1:10:29Speaker 02

  Because my understanding is that Bitcoin from that point of view is actually rather primitive. And even Ethereum has still to some extent stayed within the framework of Bitcoin. Would you say that? And if it didn't at all, wouldn't that be a problem? Okay, first question that you guys can help me think about. And then the second question is the political question. So I think I just got here a newsletter by Dan Hau. This guy you probably know very well. And you know, he's making an argument that is very common these days. That there's no way existing states can get rid of crypto. I think Ray Dalio said the other day, just last week. So the question is very hot right now. That they would try.

• 1:11:15Speaker 02

  And you know, in this case, I find the arguments coming from the crypto space rather naive. For someone like me who thinks about politics and has also political experience and thinks about political philosophy all the time. It seems to me that if states want to get rid of it, that potentially they could. Because they have the monopoly of physical violence and in the end, that's what determines things. So you have to address this question if you want crypto to survive. We're certainly reaching the point where states are getting nervous. And where China in particular might be tempted by the possibility of just getting rid of the whole thing altogether, at least within its borders. And other states are getting nervous

• 1:11:57Speaker 02

  as well. So I see emerging the possibility of a real clash between crypto and existing states. And this is something that has happened in the past. If we go back to my framework, tribes, modern state, and so on, there's been a clash between the new form of state that was emerging and the old form. Usually, the way it worked is actually that it was more the effect of butterfly and chrysalis that the new state would emerge from within the old state. There was more like a metamorphosis of the old state, you know what I mean, rather than a clash on the battlefield. And it seems to me a much more plausible model that I would recommend to crypto people to think about, how the United States, let us say, could transform

• 1:12:42Speaker 02

  into a crypto butterfly from within, rather than, you know, as Balaji would, you know, Balaji, I've talked to him quite a bit about these things. He has a kind of a model where where a crypto state would emerge somewhere in some geography. I see it more as emerging from within an existing state, and the best candidate would be the US, right?

• 1:13:05David Hoffman?

  Yes, yeah. And I think I have an answer that touches on both of those things. And the answer that I have for the first question, and the question is, does crypto have to remain under like one monolithic blockchain? Right now, that's Bitcoin. And of course, the answer depends on, well, are we judging a blockchain by its market cap? And people in the crypto world tend to do that. So I think we will do that here on the podcast. And then the other question is, can states get rid of crypto? Can they ignore it? Can they remove it from the relevancy for their citizenry? And the answer, I think, to both of these questions lies in the fact that, you know, crypto systems, and Ryan and I on the Bankless Podcast call these nations Bitcoin, there's a Bitcoin nation, there's an Ethereum nation.

• 1:13:48David Hoffman?

  These are inherently opt-in nations, which is makes them extremely unique. When you are born in America, You are an American citizen before you, as a baby, have the ability to comprehend what that even means. It's not an opt-in system. If you want to become not an American, you have to opt out. But these crypto nations, these digital nations are inherently legitimized by the bottom-up acceptance of people from the world who make them real, right? Bitcoin is just a technology, but there is a massive community around Bitcoin that makes Bitcoin BTC, the asset, valuable. And that's going to be the same thing for all

• 1:14:30David Hoffman?

  cryptocurrencies. And so I think that answers a little bit of both, is there's no way for a nation to stop a system from people volunteering their energies into the system, right? Like, these are, in the same way that no one has really been able to stop the Internet or to stop torrenting on the Internet, it's trivially easy to volunteer some sort of your personal energies into bootstrapping the legitimacy of these nations. And so, to that reason, there doesn't really need to be just one cryptocurrency. But it is a liquidity, begets liquidity effect, where the more people volunteering their energies into one,

• 1:15:13David Hoffman?

  they're opting into one crypto nation, that makes that crypto nation more legitimate, and that can beget more and more legitimacy, and all of a sudden, we have a stronger and stronger nation. But, I mean, me and Ryan on the Bankless Podcast, I think we extend our perceptions of legitimacy to both Bitcoin and Ethereum as legitimate nations. And combating that, when it is a bottom-up revolution from the nation-state, I think is extremely difficult.

• 1:15:42Speaker 02

  Let's stay with the first question. Let me put it this way. If you think about crypto as pure technology, then you could have a phenomenon where people move towards new technologies and new offers. Why can't Bitcoin be compared to Netscape?

• 1:16:02Speaker 02

  Where suddenly the model just collapses and people move to something else. But if they move to something else, then obviously the instability becomes a problem. And this takes us back to the role of political power, which in traditional states, stability of currency is provided by political power that a state can say, well, this is going to be the currency. You have to accept it. And everything else cannot be accepted to pay taxes, for example. And that provides a certain stability to the currency without which a system might not work. So that's, and that takes us to the second question, which is kind of similar. Again, the role of political power, you know, if it comes to, if it comes to a clash between crypto and the state,

• 1:16:46Speaker 02

  the state has political power and crypto doesn't.

• 1:16:49Ryan Sean Adams?

  Let me kind of build off of what David is saying, Bruno, and get to kind of your questions, right? So like on the question of does there only have to be one? I think David's spot on about sort of the ability of individual sovereign individuals to kind of opt into these systems. That makes them special. And we do have, of course, multiple nation states with different value systems and different strategies, almost as we were describing when we were talking about like the difference between Europe and America and China. And it's kind of, well, you know, the best strategy will win, independent of whether you ascribe to the value system or not. It's sort of a Darwinistic, you know, some societies and some civilizations will last and others won't. I think the same sort of effect goes on with multiple crypto nations.

• 1:17:34Ryan Sean Adams?

  You might have the Bitcoin nation, you might have the Ethereum nation and both have different strengths and weaknesses. Just as we have multiple currencies for these nation states, we have Ether and we have Bitcoin. And just as we have multiple store of values even that humanity has valued across the ages, you know, at one point in time, we had more of a silver standard and then we moved to a gold standard. So I do think that these things will remain fluid and dynamic. And every chain has a certain strategy. But I think your gut reaction to all of this and your framing of this. This is is the right framing, which is these are not technologies. These are political movements.

• 1:18:18Ryan Sean Adams?

  The the political movement of Bitcoin is is a kind of an Austrian fixed supply sort of 21 million only kind of movement. I would say the political movement of Ethereum is a bit more of the bankless movement almost that we want to do more without centralized intermediaries. Whether that's a central bank or whether that's a, you know, Wells Fargo or Bank of America, for instance. That's what we're really doing in kind of our our community, our quarter of the world is we're using these decentralized finance protocols and actually living off of them. Like so, we're we're migrating our money from our bank accounts and we're living on crypto native assets like Ether and stable coins like DAI.

• 1:19:03Ryan Sean Adams?

  And we are no longer keeping our wealth in the existing system and we can do all of that without the

• 1:19:11Ryan Sean Adams?

  without the cost of nation state infrastructure, like a military, like a government system. So that is the piece that is really revolutionary from a nation state perspective. To the to the second point, that nation states getting rid of crypto. I think that is an interesting question and something that like we sort of in the crypto community sort of call the the final boss, right? When is the final boss going to peek its head up and, you know, do something? Or like you could think of Lord of the Rings, the Eye of Sauron just sort of turns on on crypto. These are analogies we use. I like Raul Paul's answer. So we had Raul Paul on the podcast recently. And he he just thinks it's sort of a it's a game theory thing between nation states.

• 1:19:54Ryan Sean Adams?

  So it's it's basically like if you, which all the nation states are right now, are printing money. Like there's like there's no tomorrow, modern monetary theory is kind of the the zeitgeist for sure. Well, if if you're a nation state that sort of defects from that strategy and starts to acquire harder assets like maybe maybe a Bitcoin. Even if another nation state decides to outlaw it, then the nation That does not outlaw is going to accrue some advantage versus the nation state that that does outlaw, right? It's it's almost like i- if you are an authoritarian state and you ban communication protocols like the internet,

• 1:20:36Ryan Sean Adams?

  well, your society suffers and your progress suffers and you can't afford to do that for long. So it it seems more likely that there there might be some kind of a metamorphosis where the nation states realize that after banning if if some other nation, particularly in the multilateral world that you describing does not ban, then they will accrue a significant advantage. Therefore, they they can no longer ban it, but they may try to commandeer it. They may try to take crypto networks and start using them. And that's actually ma- maybe closer to what the the future might bring is sort of a emerging together. We even see like central bank digital currencies. We're seeing that in in China. They've got their own approach. But maybe the US, maybe the more liberal democratic approach

• 1:21:22Ryan Sean Adams?

  is to issue a central bank digital currency on something like Ethereum, something that is open source and available, you know, to the world and is on completely non-sovereign, neutral technology stack versus a China that's kind of controls all of the transaction knows exactly and can like freeze them at a whim. So those are, those are, I guess, some ideas. I I'm not sure if any of those resonate. What's your, what's your feedback?

• 1:21:49Speaker 02

  I I I can't help thinking that this is not the whole story. And I can't help thinking that Bitcoin Nation and Ethereum Nation and the crypto space as a whole is gonna need a lot more political savvy to navigate the next few years and decades. That's kind of what I worry. On one hand, I worry. On the other hand, I think it's gonna happen. Because I think you have a question of political power, which is going to become central very quickly. On the one hand, you know, I don't really buy the idea of stable coins. I think they are not. They are not cryptocurrencies at all. They're just like digital currencies or digital tokens. It's not the same thing that we're talking about here. But you do need an element of stability.

• 1:22:33Speaker 02

  So I still can't quite understand or accept, and maybe this is a naive question. Why a fork within Bitcoin is a mortal threat. But a fork between Bitcoin and the new cryptocurrency X. It's something that the system can deal with very well. Because after all, you have the record of of of social activity. You have assets that people have worked towards. And if suddenly there's a stampede out of Bitcoin towards something else. For whatever reason, you know, financial markets are like this, we know. Uh, I think you need some kind of stability to the system, which I don't think is gonna be. Uh, provided by collateralization. Uh, or or or sort of real world assets.

• 1:23:17Speaker 02

  I think it has to be provided by the very political character of the network. So in the end. Crypto has to be embedded in a political system. The taxes are gonna be paid through crypto, and that's what provides stability to fiat. And it will be the necessary element to provide stability to to crypto. But once it gets to that point, you have this real battle of giants between crypto and existing states. They're already getting very nervous and they'll get more and more nervous. And at that point, you're gonna need some kind. Of communication between the two spaces, which is gonna be difficult. It's gonna require a lot of diplomatic news. That in the past before as well.

• 1:24:02Speaker 02

  Uh, and I do think that states have the ability to root out the whole thing. Uh, I don't quite buy this idea that, you know, because the market, uh, where they are competing and the. And and cryptocurrencies exist, and if one state, uh, moves against it, others are gonna benefit. That market can be just sort of, uh, completely destroyed by by a powerful nation state. And so it doesn't matter anymore. And people can be put in jail and and their, you know, their real world assets can be confiscated. This idea that you'll be totally anonymous and you'll be transactioning cryptocurrencies and living in a part of the world where the state doesn't know where you are. I don't think this is a plausible model for most people.

• 1:24:44Speaker 02

  Maybe, you know, we're talking about cypherpunk to cyberpunk. You're gonna be living anonymously in some neck of the woods in the developing world. Doesn't work for everyone. And second, I think, you know, in the end, they're vulnerable points and choke points that states can just appropriate. Haven't we seen that with China in the last five, six years, you know, exchange? Or even, you know, just talk about energy. We talk about actually the processors that you use for mining and so on. There's so many choke points that a state could just seize.

• 1:25:22David Hoffman?

  Yeah, yeah, absolutely. And that's partly the bankless thesis as to why we are so interested in Ethereum is because making, turning things into protocols is a way to reduce a choke point or reduce the total number of choke points. However, that will never ever change the fact that, you know, people are, the globe is not on crypto now as infrastructure. And in the future, we hope them to be on crypto and at some point, they will have to transcend from one system to another and that will require going through a choke point. And that's kind of why we wanted to get you on to talk about your perceived dispositions of these different arenas of the world because the dispositions of China, of a Europe, of America will help define what those choke points look like.

• 1:26:04David Hoffman?

  Like you described Europe as like this, you know, this region of the world that is really into automation and perhaps outsourcing the management of things to algorithms or protocols or just a rules-based society. And to me, that actually resonates really well with using Ethereum as a public infrastructure. Like what is Ethereum other than a massive interoperable property rights management system that you could tap into as little or as much as you wanted? And then there's also the issue of America, which America is. In this post-truth fantasy land, but also in a world where crypto is offering one canonical version of reality, like there's only one Bitcoin and there's only

• 1:26:49David Hoffman?

  one version of the truth that Bitcoin offers. And same thing with Ethereum. Ethereum is a truth machine. If it isn't state on Ethereum, then it doesn't exist. And maybe that's exactly what America needs right now. And so there's different dispositions to what these choke points will look like. And if you tell me that there's going to be a spectrum between a nation-state completely locking down and going full banning on crypto and just doing everything to diminish it. And on the other end of the spectrum, there's the nation-states that are going to be crypto-powered or running on crypto, running on Ethereum. I think we're going to see it all. I think we're going to see the entire spectrum of how people integrate with crypto and how nation-states leverage this technology.

• 1:27:32David Hoffman?

  But I think the point that Ryan was making and what Raul was talking about on this podcast is as soon as any nation integrates crypto just a little bit, that opens the door. And it doesn't matter if one side of the world completely goes on an outright ban because, you know, the rest of the world only needs to legitimize it a little bit, and then a little bit more, and then a little bit more. And it's just a kind of a death by a thousand cuts. And we're seeing that today with BTC, Bitcoin, the asset, being integrated into the balance sheets of so many American companies. And so it's going to be harder and harder for the American nation-state to "ban" Bitcoin when an increasingly large part of its corporate treasuries is accepting it and have political influence in how the

• 1:28:16David Hoffman?

  Americans and how the American governments treat it.

• 1:28:19Ryan Sean Adams?

  Yeah, I'll just add one thing to what David was saying, and then I'd love your response and these thoughts, Bruno. But it's just also this, we've described probably a world of rivalrous nation-states right now. So like, you know, Bitcoin or China and the US, neither are dominant. And then there's Europe in the picture, and of course, other countries that we didn't mention. Which credibly neutral

• 1:28:46Ryan Sean Adams?

  Infrastructure do they communicate on? Right now, payments are swift and that is completely US-controlled. Right now, the dollar is the reserve currency of the world and that is also completely US-controlled. So what is the neutral money system that all of these rivalist nation-states can trust? Well, it's not one that one or the other nation-state controls. It has to be something that none of them control and can't control. It has to be something more like TCP IP, the Internet for communication. It can't have a political bent. It has to be credibly neutral. And that could be another reason that something like an Ethereum and a Bitcoin take hold.

• 1:29:31Speaker 02

  No, I love that idea. I think it's a very promising one. Vitalik, the other day on Twitter, asked why it is the case that crypto seems to travel so well across civilizational spaces?

• 1:29:47Speaker 02

  By the way, when you asked me to come here on Bankless, I thought that was one of the reasons you're interested in this idea of civilizational spaces because clearly there's something about crypto that seems to operate outside. And there's very few things, if any, that can do that these days. So the world really is breaking apart into spaces that don't communicate. And so, for example, if you compare, let us say, crypto to the United Nations system, that's one way to think about crypto. The structure that stands above all these rival spaces and is neutral between them. And clearly, the United Nations has failed in that mission. I think we can say that very confidently.

• 1:30:32Speaker 02

  And so we need something else. So that's promising. I mean, that would also, I think, be one indication that crypto is emerging as a new kind of state. But for the time being, there's kind of an interregnum where crypto could be used by every state also as a form to communicate between them. But it would already be the case that crypto occupying the spaces in between these blocks would be preparing the way to replace them fundamentally because it's the structure that stands above all of them. I think that's true. I mean, crypto is a technology of social glue.

• 1:31:13Speaker 02

  That's why every state is very interested in it. And because in the end, and I think particularly Vitalik has written a lot about this. In the end, traditional states, they've done, depending on them, but the ones that have succeeded have done a relatively good job at providing social, the social infrastructure for common life as providing a form of social glue. But none of them has done an extraordinary work. It continues to be a difficult, a difficult job for them to do. Uh, continues to be difficult to provide trust at sufficient levels, continues to be a very scarce commodity.

• 1:31:55Speaker 02

  Uh, and so in a way, they're all, all looking for something that can, that can provide a cheap source of, of, of social cohesion. They're all interested in crypto because of that. Now, the question is, so far, they don't seem aware that in the end crypto could become a threat to their own existence, uh, if it does provide a better form of social connection than the forms they have provided, you know, they've provided, they've used religion for that, they've used nationalism for that, they've used education, but in the end crypto seems a pure technology of social connection than any of those makeshift solutions.

• 1:32:34Ryan Sean Adams?

  Maybe the, the, um, enduring state of this will be less a total replacement of crypto. Like with, um, a replacement of the nation state with crypto, but more an unbundling of some of the offerings or features of the nation state and kind of an outsourcing of those things to crypto, you know, maybe non-sovereign money might be part of that outsourcing property, uh, property, maybe a international payment system might be part of that, it's no longer a, a US SWIFT type system, might be aspects of, of property rights or like, you know, capital pool registration or even global finance.

• 1:33:15Ryan Sean Adams?

  Um, that might be the steady state relationship because there are absolutely things that crypto cannot handle politically. It's, it's, um, at its core, it doesn't have humans, it is like, like you can't code everything, it's not going to come into your community and take care of the elderly, it's not going to vote, it's not going to put in roads and schools and that sort of thing. Um, but, but that could be the steady state. Do you, do you see a world where that kind of exists?

• 1:33:42Speaker 02

  Right, but this is, I think, where a political philosopher would think about things slightly differently. Because, you know, we've seen that before with the emergence of the modern state, 15th, 16th century. You still had many other structures. You have the papacy above it. You had the Holy Roman Empire above them. And below, you had lots of structures, provinces, which were semi-sovereign municipalities. You had a nobility, you know, a count or a duke would be nominally in charge of a certain parcel of the nation-state. But at some point, which is difficult to date precisely, the nation-state becomes the seat of sovereign power, of ultimate power. And all the other structures can provide lots of public goods

• 1:34:24Speaker 02

  and they can still, even to the outside observer, look like real political units. But they have been seped of the real source of power, the ultimate source of power. And I think, you know, what you're describing, I would tend to interpret differently. At some point, 20 years from now, 50 years from now, 100 years from now, you know, states might still be around, but the real source of power is going to be in the crypto system in the sense that that's where people turn to, to resolve their differences. And if there's a conflict, that's where the conflict is resolved ultimately. It could be because, essentially, the activity of the courts

• 1:35:05Speaker 02

  has been subsumed into the crypto system with smart contracts. It could be because taxes are now ultimately in control of the crypto system, even if some functions may be delegated to treasury authorities and so on. But, you know, the political philosopher in me tends to think that there's always only one seat of final political authority. And at some point, one could imagine a transition.

• 1:35:35Ryan Sean Adams?

  This is so fascinating, Bruno. This has been a wonderful discussion. You've brought kind of the political philosophy lens on crypto and I think taught us a lot. And I think Bankless, Bankless community is really going to resonate with this, this podcast. So, thanks for, thanks for joining us. And my only hope is maybe one of your future books will be about the, the crypto civilization, the crypto nation-state. It seems like a worthy successor to your, to your fantastic books on these other nation-state civilizations.

• 1:36:08Speaker 02

  Well, I'm certainly thinking about it and discussing it with agents and publishers. So it could, it could happen. It's been a great pleasure. I've been a fan of the podcast and of you guys on Twitter for a long time. And I was really happy when I saw the invitation. I really enjoyed this hour and a half, which flew so quickly.

• 1:36:25Ryan Sean Adams?

  The best conversations always do. Bruno, thanks so much for your time. Bankless listeners, we've got some action items for you, of course. First, we will include a link to check out some of Bruno's books, including History Has Begun, book, The Birth of New America, if you are interested in more on that subject. Also, I have recently subscribed, Bruno, to your fantastic Substack. Of course, Bankless has a Substack, but Bruno's Substack, The World of Games Substack, where he posts his thoughts. And it comes out a few times a week. It's just, you know, fantastic way to keep up with geopolitical events as well and get into Bruno's political philosophy mind here. That's the second action item.

• 1:37:07Ryan Sean Adams?

  And then third, of course, guys, if you want to see Bankless rise up the charts, if you want to get the message in the minds and hearts of more folks, give us a five-star review on the iTunes podcast. David, we're getting pretty close to 200 or so. I haven't looked at it in a little bit, but we're moving on.

• 1:37:26David Hoffman?

  We're just, just shy of 150, which means the Bankless Nation has some work to do. Our trajectory has slowed down while the crypto world has been heating up. So we need your five-star reviews to make sure that we can get the Bankless Gospel and build out the Bankless Nation into the ears of so many more people.

• 1:37:44Ryan Sean Adams?

  Listens are going up and we need, if you are a listener, for you to hit that five star review so we go up on the iTunes charts too. Lastly, guys, risks and disclaimers, of course, none of this was financial advice. ETH is risky, so is DeFi and crypto. As we always talk about, you could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but thanks so much for joining us.