#1142 Michael Shellenberger | Bitcoin Debate

Michael Shellenberger is the bestselling author of "Apocalypse Never" and "San Fransicko." He also is the founder of Environmental Progress. In this conversation, we discuss bitcoin and why we don't see eye-to-eye on it. Topics include common core values, confiscation of wealth, security of assets, use cases for bitcoin, and Cyprus banking crisis. ======================= With a Messari Pro subscription, you gain access to exclusive industry-leading long-form daily research reports, daily crypto news & insights in your inbox, advanced asset screeners, curated sets of charts and metrics and so much more. Try Messari Pro today! Get up to 25% off their Messari Pro membership by visiting www.messari.io/pomp and entering promo code "POMP" at checkout. ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp =======================

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

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Michael Schellenberger is the bestselling author of Apocalypse Never and San Fransicko. He also is the founder of Environmental Progress. In this conversation, Michael and I discuss Bitcoin and why we don't see eye to eye on it. I really appreciate Michael's views on a whole bunch of topics, but him and I have different views on Bitcoin. And so we thought it'd be very interesting to jump on and have a civil conversation, what he thinks, what I think, counterpoint and counterpoint. I hope that you enjoy these types of conversations because I really enjoy having them. And the beauty of America and free speech is that we can have conversations with people we

• 0:46Anthony Pompliano?

  disagree with, and then we can fight like hell to protect what they're allowed to say, even though we don't agree with them. Here is my conversation with Michael Schellenberger.

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• 2:44Anthony Pompliano?

  all right guys super excited I've got Michael Schellenberger here with me Michael you tweeted out and said hey I want to come on and talk about Bitcoin and cryptocurrencies with people within the industry and I thought a great place to start would maybe just be like what is your current understanding maybe positive or negative about Bitcoin and cryptocurrencies

• 3:05Speaker 06

  yeah well first thank you for having me on I am someone that cares a lot about

• 3:14Speaker 06

  public policy and that means I care about having good conversations and discourse and and also being able to talk with people that I might disagree with which is what I think the case is here and you know I want to depersonalize it because I do think I suspect that you're a Bitcoin investor correct do I have that right of course you know and so like you know I want to depersonalize it and just take it that kind of a public policy perspective you know I think it's worth asking whether I'm a Bitcoin investor cryptocurrency investor I'm not

• 3:56Speaker 06

  although my my son and wife bought a little bit of Bitcoin it's so but it's such small quantities that are sort of trivial to even mention

• 4:08Speaker 06

  But yeah, I mean, my view is probably pretty close to Elizabeth Warren.

• 4:14Speaker 06

  I am viewed as, you know, people on the far left think I'm pretty conservative at this point. I think of myself as a moderate on a lot of different issues, actually, but on crypto, I don't think that there's a purpose to it. I don't, at this point, I don't see any reason it should be regulated because I don't think it's like a real thing.

• 4:37Speaker 06

  I think it's basically a pyramid scheme built on top of a criminal, you know, digital enterprise built on top of a kind of beautiful digital art project.

• 4:52Anthony Pompliano?

  So let's unpack a little bit of this, right? Because I think it's very

• 4:55Speaker 06

  That's my core view.

• 4:56Anthony Pompliano?

  Okay, that great starting point. One of the ways that I always kind of start these conversations is like, forget Bitcoin, blockchains, crypto, kind of the whole nine yards. And if we just think of like the legacy financial system, my guess is that we probably have some common understanding and common thoughts. I actually think even the Elizabeth Warren and kind of her perspective. A lot of people arrive at maybe three core beliefs. The first is that the average American citizen is worse off financially today than they were in the past from a purchasing power standpoint. So inflation's been eating away at people's purchasing power. Why?

• 5:38Anthony Pompliano?

  Up for debate, but definitely they have less and less purchasing power kind of over time. There's proponents of minimal inflation that would argue, hey, we need kind of 2% inflation because it's, it is able to stimulate economic activity. It's able to stimulate velocity of money. And so a little bit isn't that bad. But I think that's kind of one core belief that a lot of people, both inside and outside of the Bitcoin community have, which is this like loss of purchasing power. And I'll come back to that in a second. The second thing is, I think that there are a lot of folks who look at the legacy financial system and they say, various players, whether they are oversight organizations, whether they

• 6:19Anthony Pompliano?

  are the major banks, whether they are individual market participants, they are doing things that run counter to kind of the benefits of the whole. The opportunity isn't evenly distributed and people aren't able to actually, you know, kind of have a fair shot, if you will, in that financial system. And I think, you know, Elizabeth Warren's probably been one of the biggest proponents of critiquing Wall Street and the various banks and things like that.

• 6:47Speaker 06

  Right.

• 6:47Anthony Pompliano?

  And then the third thing that I would say is, I think most people would raise their hand and say, yes, I believe in the US Constitution, right? And kind of all of the things that that encompasses from freedom of speech, private property rights, and those things that tend to be, you know, I'll say non-controversial, but I'll caveat it with like, I'm sure someone somewhere has a problem with the US Constitution, but it doesn't sound like you. And so, would you agree that like, those three things are probably common ground when it comes to, you know, before we get into the Bitcoin conversation?

• 7:23Speaker 06

  Yes.

• 7:24Anthony Pompliano?

  Okay. So the reason why I start there is, I look at Bitcoin very differently, right? Than most people, or maybe than, maybe publicly it appears. Where there is a very large portion of the Bitcoin community that looks at it as a speculation tool, right? Kind of to your point, is people are saying, hey, if I buy this, and I close my eyes, and I wait for a period of time, the price is going to go up, and I'm here to get rich, right?

• 7:52Speaker 06

  Right. My wife and son.

• 7:54Anthony Pompliano?

  Okay.

• 7:57Anthony Pompliano?

  And look, if I'm really honest, I think that, to some degree, like, that speculation component is true in all financial assets, right? There's even people who buy their home and they're like, look, I need a place to live, but also I'm buying this one because I think it's going to go up in value, right? So there's definitely-

• 8:12Speaker 06

  Talking to me right there.

• 8:13Anthony Pompliano?

  Okay, so 100%, there's a bunch of people who I think are buying Bitcoins and don't even understand really what it is, they just think they can get rich quick, right?

• 8:21Speaker 06

  Well, yeah, or you, yeah, more generously, you think it, more generously, you just think it's a valuable asset. I mean, if I'm being nicer to, I've teased them because of course they lost money. But um it's more like, yeah, some people they view it as a quick thing. Some people may view it as like a long-term asset to hold like gold, which I suspect is your view. Um, but there's other people like me who just think it's a digital art project with a crime, an easy way to money launder built on top of it with a pyramid scheme built on top of that. So I think that, you know, I appreciate starting with some core values, which I totally share with you. I'm sure you and I share a lot of core values.

• 9:06Speaker 06

  I think there's an ideological agenda here too, which is basically um anti-statist. And I know this because um um someone who I have a lot of respect for uh uh Balaji, uh, my last name, right, Shunivasan?

• 9:23Anthony Pompliano?

  Correct.

• 9:24Speaker 06

  Um, uh, and I, as soon as we met, we started arguing about cryptocurrencies.

• 9:30Anthony Pompliano?

  Blashe wasted no time. He he just gets right into the debate.

• 9:33Speaker 06

  I mean, I'm I'm not a PhD in libertarianism, but I feel like I have a like a pretty solid bachelor's in it. Um, and there's some of the ways in which it's different from classical liberalism and from libertarianism. But I mean, um, or I'm sorry, from like Randianism, but um, you know, I mean, I think that there's a kind of a, I think there's a sort of, it's not a values difference because I think we all value public safety and and freedom and democracy. Um, you know, there's still a kind of, I think there's a libertarian fantasy that is tied up with seasteading that's tied up with a kind of idea of getting away from the nation state

• 10:13Speaker 06

  that I think is absurd because I think it doesn't deal with Hobbes. It doesn't deal with just the reality of the human animal and the ways in which we um that it's just the strong preying on the weak unless there is a centralized. State to protect the vulnerable. So I mean, you know, I think there's that going on, but I ultimately just kind of go, I don't think there's, I don't think it's a very important, I don't mean to be mean about it, but I don't think it's also even very particularly important, except for the fact that you get the pyramid schemes and the crime and on the crime stuff, I kind of go, well, I kind of, part of me agrees with the classic crypto point, which is just that people use cash, they

• 10:57Speaker 06

  use fiat currency, to borrow your language, to commit crimes. That's true. I do think digital makes it easier to money launder. And then there's the pyramid schemes. So in some ways I go, the real question for public policy is just whether it should be regulated. And now having spent some amount of time looking at, and I wrote two pieces, both of which I think are very accurate and got at the issue around SPF and FTX. You know, you sort of saw somebody who was very close to getting regulations that would have helped him.

• 11:35Anthony Pompliano?

  Yeah.

• 11:35Speaker 06

  And so I'm skeptical of regulating it, in part because I don't, I don't think that what is called cryptocurrency is a currency. I think there's only national currencies, or what you would call fiat currencies. I think everything else is sort of seasteading libertarian bullshit with kind of mafia criminal money laundering built on top of it and pyramid schemes built on top of that. And the only real public policy issue is just to warn people.

• 12:00Anthony Pompliano?

  Okay.

• 12:01Speaker 06

  You know, that this is going on. There's not much, otherwise I think you're just, otherwise, you know, I don't think there's, so I don't think there's like a regulatory agenda. I just mostly kind of think it has to be kind of denounced. So that's why I kind of come out.

• 12:14Anthony Pompliano?

  Okay. So, so let's, um, let's kind of dig a little deeper on this. The, the reason why I start with kind of the common ground on those, you know, three beliefs is that my personal belief, and I can't speak to anybody else, but my personal belief.

• 12:24Speaker 06

  Yeah.

• 12:24Anthony Pompliano?

  Is that Bitcoin specifically, if you take Bitcoin away from all of the other cryptocurrencies, which I would actually agree with you, many of them are not currencies. They are Ponzi schemes and all kinds of crazy nonsense, whatever, right? We're talking about something that is, by almost every single person who looks at it, Bitcoin is decentralized, right? Meaning that there is no one person that controls it. There is no one person who can make unilateral changes. It's very different than kind of these centralized either currencies or organizations. Bitcoin actually embodies and codifies the American ideals better than any technology in the world. And I'll give you kind of two examples. The first is when I talked about

• 13:02Anthony Pompliano?

  free speech and the ability to kind of have the protection of the US Constitution, in the financial system today, you do not have free speech, right? There are many court cases that prove that software is free speech and all this stuff. And so, again, there is reasons why people will argue you shouldn't have the free speech, you shouldn't be able to do what you want with your money, whatever. But I think that Bitcoin ultimately says, although you may be sympathetic to a government or not, anyone in the world is able to send economic value to anyone else without asking permission of a third party. Now, in the United States, actually, I would argue, we've been pretty damn good about protecting people's free speech and allowing them to conduct economic transactions as long as we didn't

• 13:45Anthony Pompliano?

  deem them to be financing terrorists or money laundering or kind of breaking the rules, right? For the most part, you or I can go to the ATM, we can get money out, we can go and buy stuff, we can swipe our credit card, we can send money to people around the world, and like, we kind of go about our day. Other people around the world, you know, in fact, hundreds of millions, if not billions of people, can't do that. And sometimes that's because their governments are kind of oppressive. Sometimes that's because there are companies that are doing things that, you know, either take value from them, stop them, whatever. Or it could actually be because their currency is inflating so quickly. If you look at somewhere like a Turkey, as Zimbabwe, Venezuela, whatever, where literally the prices are changing in the store on an hour-to-hour basis, right? And so it just makes it nearly

• 14:27Anthony Pompliano?

  impossible to be able to express your economic view if literally the price is changing on a day-to-day basis. So I think that's like one piece of this Bitcoin story is the ability to take the ideal of free speech and codify it in a piece of technology, and then hand it to anyone in the world with an internet connection, right? The accessibility of this is a kind of a key component. The second thing is this idea of private property rights. So if I was to ask you, you know, what property do you own? You would tell me a list of all the assets that you kind of have on what would be the equivalent of your like, personal balance sheet. You say, hey, I maybe have a house, I've got some stocks, I've got some cash, I've got, you know, whatever other kind of assets you own. But if you actually go and you break that down,

• 15:10Anthony Pompliano?

  the odds of you being able to defend your personal property is very, very low. For example, if a bank was to say to you, we're not going to give you your dollars back. You, yes, do have a legal path. You can go to court, you can go and try to fight it and do all this stuff. But what we've seen is in many countries around the world, Cyprus, back in the 2012, 2013 timeframe is kind of the quintessential example that Bitcoiners point to. They basically just said, look, we're just going to tax this because we need it. And they were able to take that currency, that hard earned economic value from citizens without any kind of real rhyme or reason or legal precedent. And so if you then were to go and say, well, let me look at my house, for example, there are people who lose their homes every single day.

• 15:53Anthony Pompliano?

  And sometimes that is because of actions of their own. Sometimes that is actions of other organizations. And sometimes there's things like eminent domain where literally pieces of their personal property are then confiscated by the government. And I don't think that this is so much a anti-government view, which again, there are definitely people in every community, right? There's literally people on both sides of the aisle who think the government is bad or whatever. But I do think that this is very much an individual rights story. And if there's one thing that we've seen over time in this digital era, it's that individual rights are being decreased rather than increased. And sometimes there is a strong argument for why that's happening,

• 16:37Anthony Pompliano?

  kind of the greater good and kind of all of those, those different points. But when it comes to your ability to have freedom of speech and express your views without being inhibited by governments, organizations or other individuals, and then also the ability to own and defend your own personal property. I would argue that in the digital realm, Bitcoin is the only asset where you actually have ownership of an asset that is not subject to other organizations, governments or other individuals who can then come in and unilaterally confiscate it without your kind of agreement.

• 17:13Speaker 06

  Yeah, but but I mean, just okay. Well, let's take there's I think there's I heard two

• 17:19Speaker 06

  arguments there. One is Bitcoin is more secure than other forms of wealth.

• 17:29Speaker 06

  And that's in part because governments can confiscate it. And you gave the example of Cyprus. Now, that Cyprus example is really interesting. I mean, it really only dawned on me when you start talking about it now, because it sort of goes the story that you sort of tell goes, well, you could have your assets taken just like they did in Cyprus. And that shows that your assets are not really secure in the bank or in some financial institution. Without ever looking at like, well, why did Cyprus do that? And Cyprus did that because, of course, they wanted to avoid a financial crisis. So avoiding financial crises is like

• 18:09Speaker 06

  avoiding catastrophe. I mean, it's like avoiding a hurricane or avoiding, you know, the collapse of what just occurred in Sri Lanka, you know. So the story that gets

• 18:20Anthony Pompliano?

  But should individuals but should individuals have their hard earned wealth confiscated to pay for the sins of their government or their central bank?

• 18:31Speaker 06

  Well, I think there's a very that's a that's a kind of values question.

• 18:39Speaker 06

  Before you get to it, there's a more interesting, I think, practical question, which is, I come from a long line of pacifists. And my my some members of my extended family and certainly the members of my family in the past would say, wait, why should I have to go and die and fight and kill in a war that I did not create? Why am I responsible? Either for going to some other country to fight or having to defend my own country physically. Um, I didn't sign up for that. And I actually have a lot of, uh, I still have a lot of respect for pacifists. Um, it's a super courageous position because

• 19:24Speaker 06

  the result was often that you would end up still being sent to war, but not with a gun. Or you'd have to, or you'd be basically, you know, imprisoned or persecuted or tortured or killed or whatever because of your position. So when I, I can respect the honor and courage and having an anti-government position that says, why should I have to defend my country physically? Or why should I have to spend my money defending my country from a military attack or a hurricane or a financial crisis? But that's what nation states do. That's what it means to be a nation state.

• 20:07Speaker 06

  Is that you conscript your young men to defend your territory? And you're gonna confiscate your people's wealth to defend yourself against a financial crisis. That's what every nation state does. If it doesn't do that, it's not a nation state. So it's an anti, so the whole Cyprus example. You know, and it's preying on a kind of ignorance of people. Cause it makes it sound like the Cyprus government was just whatever, as opposed to like, no, actually, there's a whole context there of why the Cyprus government did that. Um, now in terms of the security of Bitcoin. I mean, I find the other thing as a newcomer to this space sort of shocked that that whole rap that you just gave

• 20:52Speaker 06

  never mentions the fact that that dude lost a hundred twenty seven million dollars of Bitcoin because he left it in his car. I mean,

• 21:00Anthony Pompliano?

  Yeah, but that's like saying.

• 21:01Speaker 06

  Bitcoin is not, Bitcoin is as secure as gold.

• 21:04Anthony Pompliano?

  No, but, but that's like saying, I always think of the security of an asset as the further away from the spigot, the less secure it becomes. So I'll use dollars as an example, then I'll use Bitcoin. The dollars that are-

• 21:15Speaker 06

  And answer the Cypress example while you're at it.

• 21:18Anthony Pompliano?

  Yeah. So, so the dollars that are created, you know, Treasury, Federal Reserve, like the Treasury's never been infiltrated, hacked, robbed, anything like that. Now, when the dollars leave and they go in a physical truck and they're driven somewhere, there's plenty of armored trucks that have been robbed. And when it sits in a bank, there's plenty of banks that have been robbed, right? And then if you have the dollars in your wallet or your pocket and you walk down the street and someone, you know, hits you over the head with a wrench, they take the money from you as well. So the further you get away from kind of the creation point of the currency, the less secure it becomes. So that's dollars. With Bitcoin, same thing. The Bitcoin blockchain, where the actual Bitcoin is held in terms of this public ledger, that is not ever been hacked before. Now, if you go and you put

• 22:01Anthony Pompliano?

  your Bitcoin on a physical hardware wallet and then you leave the hardware wallet on the counter at McDonald's, right? Or you leave it in your car and someone robs your car, then yes, of course, but that's the same thing as if you left the $5, you know, sitting in your cup holder and you left your car unlocked, right?

• 22:16Speaker 06

  Well, let's pause on that. Let me, Anthony, let me pause on that one.

• 22:19Anthony Pompliano?

  Okay.

• 22:20Speaker 06

  Because if I, if I lose my, because of course, the big case for Bitcoin and other, you know, digital assets is that they are more secure, for example, than having your money in a bank. But the only example that you have is Cypress, and I'll let you get to that because I interrupted. But the other example is the credit card. Well, I mean, if I leave my credit card at the supermarket or at the airport, and of course, I've done that many times, as most of us have, and somebody picks it up, this has actually never happened, but if somebody picks it up and they start spending on it- The credit card company will actually, at this point, I believe they do not hold me accountable for it, especially if I call right away and I'm like, I lost my credit card. They're like, they put an end to it, whatever. That's a much more secure digital asset.

• 23:05Speaker 06

  So, so, so in that case, given that like a credit card versus a hard drive with Bitcoin or some other digital asset on it, clearly the credit card is more secure.

• 23:15Anthony Pompliano?

  But, but it's not.

• 23:16Speaker 06

  And then you're left with Cyprus.

• 23:17Anthony Pompliano?

  But, but it's not because the credit, the credit, the credit card is not an asset, right? The credit card is you're spending someone else's money and they're just saying, you don't have to pay us back. But it's not actually more secure, whereas with Bitcoin.

• 23:28Speaker 06

  The bank account.

• 23:29Anthony Pompliano?

  Yeah. So with Bitcoin, if, let's say I put on a hardware wallet and I leave it in my car and you take the hardware wallet. You have the hardware wallet, but you don't have my Bitcoin because you still need the private key, right? And if I just have the private key in my head, then I still own that Bitcoin. Unless you have the private key, you don't have the Bitcoin, right?

• 23:46Speaker 06

  The, Anthony, that might be, that might be fine, but I think the point is, is that like, my assets in my bank account are really freaking secure. They've been, they're more secure than Bitcoin, they're more secure than cash, they're more secure than gold. Like, there's no, there's no real, now my, you know, both of my parent, my, both sets of my parents have been scammed recently. And it was like annoying, but like, they didn't like lose like a significant sum of money. And when that happens, usually there's some sort of lawsuit or some sort of reconciliation. The bottom line is that we have more secure, our assets are more secure than they've ever been at a physical and technical and, and, and monetary level in human history.

• 24:31Speaker 06

  So Bitcoin doesn't, neither Bitcoin nor any digital asset system offers greater security outside of some frankly outlandish political scenario like Cyprus, which I want to give you a chance to answer to, and which is even a case where it's like, just to turn it all back on, you know, like if you, if Bitcoin were actually really worth something, the Cyprus government would find a way to take that too. Because that's what nation states do. They will just take your assets. If they need them to defend the nation state. So I mean, that's I that let me so we can pause and let you answer the Cypress question.

• 25:08Anthony Pompliano?

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• 25:53Anthony Pompliano?

  They offer clients the deepest pool of liquidity, and they have 100% uptime track record through all the volatility spikes. LMAX Group's liquidity relationships and ultra-low latency technology means that LMAX Digital is the market-leading solution for institutions across crypto trading and custodial services. LMAX Digital: secure, liquid, and trusted. Go learn more at lmaxdigital.com/pomp. Again, that's lmaxdigital.com/pomp. So during the 2008, 2009 global financial crisis, did any banks go bankrupt? Yes, right? If your bank went bankrupt and you had more than $250,000 in an account,

• 26:33Anthony Pompliano?

  there's no insurance, and people lost money. And so they put their money into an FDIC-insured bank account, and even though it was FDIC insured, they still, the bank failure, ended up losing their money. So, yes, on the...

• 26:49Speaker 06

  Wait, wait, I don't know. I'm not, I'm not even sure I'm understanding. Like, if you had your money in an FDIC-insured account during the 2008, 2009 financial crisis, you did not lose your money?

• 27:00Anthony Pompliano?

  No, that's not true. If you have more than $250,000 in one account, you lost, and the bank went bankrupt, they only, the FDIC insurance only applies to $250,000 in the account. So if you have $300,000, that $50,000 difference is not insured. You will lose that if your bank goes bankrupt.

• 27:17Speaker 06

  And who, and how much was lost? Okay, well, I'm being educated then. So in 2008, 2009... How many consumers lost how much money from bank failures?

• 27:27Anthony Pompliano?

  That's a great question. I don't know what that answer is, but it'd be interesting to find out. And I think what we could probably find out is 2008, like a number of bank bankruptcies. We'll do a little, little Google sleuthing while we're going. So there was 25 bank failures in 2008, according to fdic.gov. And I'm sure each one of them frankly has a whole bunch of different details. But when you look at the total assets of those banks in 2008, I'm looking at a bank failures in brief.

• 28:04Anthony Pompliano?

  There was $373 billion that were in those banks that failed during, of the bank failures in 2007, 2008. So again, that doesn't mean that everyone lost all the money. If all $373 billion was in FDIC insured accounts with less than 250 grand, then it would have all been protected. So I don't know what the number or difference is. But the point is that in 2008, there was 25 bank failures. In 2009, there was 140 bank failures. And in 2010, there was 157 bank failures in the United States. And so again-

• 28:41Speaker 06

  Yeah, but don't- Yeah, go ahead.

• 28:43Anthony Pompliano?

  I was gonna say, I think that there's probably a power law, right? JP Morgan has, you know, way more assets in them than obviously some small bank. And you can imagine credit unions and kind of all these smaller organizations. But I think it goes back to this Cypress example, which is, you know, if you have more than $250,000 in an account and FDIC isn't covering the additional amount, to some degree, you made a mistake, right? It's your fault, whether you think you made the mistake or not. There's a personal responsibility. You took your money, you put it into a bank, you thought it was safe. The bank ended up not being safe. It's not your fault that the bank failed, but you made the decision to put the money in and you chose an organization that ended up ultimately failing. The government provides that $250,000 FDIC insurance, is kind of a safety net,

• 29:27Anthony Pompliano?

  and you put more money in there than kind of protected. And so again, personal responsibility, that's your fault. I think the example in Cyprus, which is you didn't choose an organization that failed. It's not the banks that failed, right? It was actually the government and they needed the revenue. And so they were confiscating. Now, to your point, I understand very much the pacifist view. I don't know if you know this, I was actually in the US Army. I deployed overseas. There's a whole bunch of stuff we could unpack in terms of people's perspective on war and all of these things. And many of the misconceptions and probably we've seen more eye to eye than you would think. But in the United States, we have a voluntary military force.

• 30:08Anthony Pompliano?

  And I actually think that if there was some massive financial calamity and we went out to the citizens and we said, hey, there is a, I don't know, a billion dollar shortfall. Use a relatively small number for finance. And we need a billion dollars donated in order to keep the US financial system up. I think a lot of people would say, hey, you know what? I'll throw them 20 bucks, right? I'll throw in a hundred dollars. Like, I don't want bad things to happen. But when it becomes less about the individual's choice, just as it's a volunteer military force or voluntary kind of propping up of their own economy. And it becomes a, we are going to use a monopoly on violence and power in order to confiscate your wealth. And in the United States, what would be a violation of the US Constitution? That's where I think people say, hold, hold on a second here.

• 30:53Anthony Pompliano?

  Why would we ever put ourselves in a position to allow people to do that? And the one last thing I'll say on this, and then I'd love for you to respond, is I actually agree with you. This is like a point 00001% chance of happening in the United States. Like, the United States, in my opinion, is the greatest country in the world. If you could pick anywhere in the world, you'd want to live in the United States. We have democratic political system. We've got a capitalistic society. We tend to have the most free society when it comes to a whole bunch of different things around speech and all this. So it's not me predicting it happening. I'm just saying that Bitcoin affords certain things when it comes to security and the anti confiscation or the anti censorship that other currencies don't allow.

• 31:38Anthony Pompliano?

  There's no other currency in the world that would allow you to hold it. And if, for whatever reason, someone wanted to confiscate it, allow you to not let them do that.

• 31:48Speaker 06

  Yeah, well, so just to finish the Cyprus issue, I mean, so I my my point is much simpler, which is that if the United States or Cyprus were being invaded, it wouldn't be a voluntary military force to repel the invaders. Similarly, when you're under a financial crisis, which is what they were under, or if we were, of course, the government would seize people's assets. Like, that's what happens. And you can like, kind of go, well, that's not fair or whatever. But like, you live in a nation state. The government is not like another corporation. Like, the government is responsible for, like, protecting us from external harm. That's Hobbes.

• 32:33Speaker 06

  And like, there's a sort of sense I get from when I hear people talk about this that kind of goes, well, what right does the Cyprus government have to take my money in a financial crisis? It's like, you are a citizen of the nation state of Cyprus. And when they're having a financial crisis, they're going to use the assets they have available to protect their nation state. They're not going to become a ward of whatever. They're not they're not going to be invaded by another country, and they're not going to let their currency collapse, so.

• 33:02Anthony Pompliano?

  But Cyprus was hired. Cyprus was hired by the citizens, right? The the in the United States, I, as a citizen, I am paying for the government. I'm paying for the local government. I'm paying for the state government. I'm paying for the national government.

• 33:15Speaker 06

  Hiring is not the correct word.

• 33:18Anthony Pompliano?

  Well, of course it is, because I hired the state of North of New York.

• 33:21Speaker 06

  No, because hiring is optional. Hiring is something that an employer of a of a, I mean, hiring, like, you're paying your taxes. Well, that's not the same thing as being as hiring somebody.

• 33:33Anthony Pompliano?

  But but here's a good way, and I think maybe this is a difference of perspective. I hired the state of New York when I lived there, and they provided me services. And when I chose that I didn't think I was getting my money's worth, I voluntarily hired a different state government, and I moved to Florida. Right?

• 33:51Speaker 06

  You're just, I mean, you're just using like inappropriate language from the private sector to describe your obligations to the nation state.

• 34:01Anthony Pompliano?

  But, but it, but it-

• 34:02Speaker 06

  Because they're not the same.

• 34:03Anthony Pompliano?

  But see, this is a difference. My obligations to the nation state is the government is here to represent the people. The people are not here to serve the government. There are hundreds of thousands of people who fired California and New York in the last 24 months, and they hired Texas and Florida, to the point where they literally lost political seats because people said, "I am paying money and the services that I am getting do not fulfill what my needs or desires are." And so I think this is like, one of the big things here is, it's personal choice. Like, you can vote with your dollars and you can vote with your feet. And what we saw over the last 24 months is, usually just domestically, I don't think, actually, there was one talk track of people were gonna like repeal their citizenship,

• 34:48Anthony Pompliano?

  they were gonna move to some crazy country somewhere around the world. I actually don't buy that. I don't think people are gonna do that. I think the US passport and US citizenship is kind of the light on the shining hill. Everyone wants to become a US citizen, for the most part. Yes, there are some people who say no, but there's a lot of people who want to become US citizens. But I 100% think that if a government is not fulfilling the needs and wants and desires of citizens, they will move, they will take their dollars elsewhere, and they will fire. Right? Again, and when we go to the ballot box, if you're an incumbent and you don't get reelected, you got fired by the people.

• 35:27Speaker 06

  Yeah, but you're misdescribed, you're using inappropriate language from the world of capitalism to describe the relationship between citizens and their government.

• 35:37Anthony Pompliano?

  But we have a capitalistic society-

• 35:38Speaker 06

  There's a reason why we don't mix those two languages, because it's inaccurate and misleading. If you are a, if you want to live somewhere, you're almost certainly gonna pay taxes, and it's not optional, whereas it is optional about whether you hire somebody. And you can just use, you're just using confusing language when you describe the process of electing new governments, throwing out old politicians.

• 36:03Anthony Pompliano?

  But isn't that hiring and firing-

• 36:04Speaker 06

  You have a perfectly fine language for that.

• 36:06Anthony Pompliano?

  But aren't we hiring new politicians and firing old politicians? Like, they have a job-

• 36:10Speaker 06

  I mean- I mean, I think the fact that you wanna kind of die on that hill of using inappropriate um market language to describe um politics and democracy and governance um doesn't help your case, cuz it actually, it suggests that there's a kind of hardcore libertarianism there. Look, man, I mean, if we go to war with China, I don't care where the fuck you're gonna move to in the world, like, the US government is gonna find some way to like, if you have some ability to serve in that war, they're going to grab your ass and make you fight for America. And similarly, that's gonna include grabbing all your Bitcoin. And being, that's just what it would be to be at war, and you know that as well as anybody, because you served in the military.

• 36:53Speaker 06

  But I think that, like, there's this idea that, like, oh, God, you know, the Cyprus government, they took their people's money, and what right do they have? Well, the right they have is that they're the government, it's the nation state. And yes, if they don't respond to what the people want, then that nation state, that government will either be overthrown democratically or through violence or some other means. But that's politics, that's not consumerism. Bitcoin is trying to sort of, and this is metaphorical here, I mean, it's sort of introducing inappropriately a kind of political agenda and passing it off as a kind of digital revolution. It's not what it is. You know, it's, um, you know, there's a lot of beauty in the Bitcoin, in the initial Bitcoin paper.

• 37:37Speaker 06

  There's something really artistic and interesting about it, and certainly blockchain technology is super interesting, and I don't know anybody that wants to get rid of it. But the claim that this is some alternative currency to like the dollar, or the euro, or the yen, is just wrong. It's literally um false advertising. And even the word cryptocurrency is false advertising. And the reason for that is that you are a citizen of the United States. And if you wanna go and renounce your citizenship and go and be an Israeli, or a European, or a Brazilian, or whatever, yeah, you can do that, but then you're gonna have obligations to that nation state. And there is no seasteading, and the reason is, is that that's just being a pirate. Yeah.

• 38:20Anthony Pompliano?

  I don't, I don't think that anyone in the, well, maybe not anyone, but I don't think the majority of the Bitcoin community thinks that there's no obligations, right? In fact, what I think we're seeing is that politicians around the country, I've spent a bunch of time with many of them, both at the local, state and federal level. They're competing to get Bitcoiners to move to their areas and to their kind of ecosystems because there's more tax revenue. Right? This is one of the fastest growing sectors of the economy, both in terms of job creation, in terms of economics, and then obviously from taxation as well. And so that's why you see states like Texas, you see states like Kentucky, Florida, Ohio, et cetera, all competing to try to get these people to move there. But I think-

• 39:01Speaker 06

  Yeah, because they compete for Herbalife conferences too.

• 39:04Anthony Pompliano?

  Yeah, but, but of course not on the same size nor scale as to what we're seeing from these politicians.

• 39:11Speaker 06

  And real estate agents like to sell to drug dealers. I mean, so what?

• 39:15Anthony Pompliano?

  But if they want to sell, but if they want to sell to drug dealers, right? The, the US banks launder more money than the Bitcoin ecosystem, right?

• 39:24Speaker 06

  So it's make it harder than not easier. I mean-

• 39:26Anthony Pompliano?

  Well, Bitcoin does make it harder, but this is the thing.

• 39:28Speaker 06

  Thing is doomed because honestly, you're going to have guys like me who are going to fight on, on the right and the left to, and especially as shit goes sideways in terms of the economy. That are going to fight to not allow Bitcoin to move from the black market economy into the mainstream economy. That's why I don't want to see it regulated. It's not, it's actually not a thing. All we should do is warn consumers to stay the hell away from it. It, it is part of a radical political agenda that the vast majority of people are not on board with because we actually prefer to have functioning nation states that have-

• 40:04Anthony Pompliano?

  But that's not true.

• 40:05Speaker 06

  Militaries that protect us-

• 40:06Anthony Pompliano?

  The White House disagrees.

• 40:07Speaker 06

  That can defend it. And so-

• 40:10Anthony Pompliano?

  The White House disagrees though. 14% of US citizens, according to the White House, own this asset.

• 40:16Speaker 06

  Yeah, because they don't understand what it is because they've been scammed. I mean, people buy Herbalife and they buy-

• 40:21Anthony Pompliano?

  But not 14%.

• 40:22Speaker 06

  Bernie Madoff and-

• 40:23Anthony Pompliano?

  Not 14%.

• 40:24Speaker 06

  SPF was the, SPF is the face of crypto.

• 40:27Anthony Pompliano?

  Not, not 14%, not 14% of the US population.

• 40:32Anthony Pompliano?

  Owns the asset 150 plus million people around the world does more transaction volume than Mastercard in a given year.

• 40:41Speaker 06

  The biggest, it's a huge financial scam and it's crashing.

• 40:44Anthony Pompliano?

  But what's the scam? This, this actually, this will be interesting to talk about.

• 40:48Speaker 06

  There's no use value.

• 40:50Anthony Pompliano?

  But, well, okay, so hold on. So if you were to ask me.

• 40:52Speaker 06

  Criminal activity.

• 40:53Anthony Pompliano?

  If you were to ask me, what is the use cases for Bitcoin? Right? I would argue there's a store value, just buy it and hold it for a long period of time. The second, and no different than gold, a house, I could literally say that.

• 41:05Speaker 06

  You can do things with gold. Gold you can do things with. Gold has a lot of purposes.

• 41:09Anthony Pompliano?

  Well, no, no, but, but I'm just saying that there's store value. I could, it may be a bad store value, but I could go outside and I could buy a bunch of rocks from somebody who's a rock dealer and just hold them in my house and say, I think that in the future is going to be worth more money. So store of value.

• 41:21Speaker 06

  More valuable than your Bitcoin, sure, those rocks.

• 41:23Anthony Pompliano?

  Okay, so hold on. So store value. The second thing is medium of exchange. The nice thing is that, uh, rather than debate.

• 41:30Speaker 06

  If it has no value, then this exchange is pointless.

• 41:33Anthony Pompliano?

  But I would argue that, uh, you think, let's say, for example.

• 41:37Speaker 06

  Why run, why run, why run away from the use question? Let's talk about that some more.

• 41:41Anthony Pompliano?

  Well, because I'm walking through it.

• 41:43Speaker 06

  If you can scam people into paying money for it.

• 41:47Anthony Pompliano?

  But see here.

• 41:48Speaker 06

  That's the only way it's useful. Otherwise it has no benefits in terms of digital transactions, zero benefits.

• 41:54Anthony Pompliano?

  So you're saying that 14%.

• 41:58Anthony Pompliano?

  So according to your, uh, kind of, uh, thought process here, 14% of the US, uh, population has been scammed. These are consenting, these are consenting free individuals. Who come together.

• 42:11Speaker 06

  Family, my family.

• 42:14Anthony Pompliano?

  You're saying your wife was scammed?

• 42:16Speaker 06

  Yes, I am.

• 42:17Anthony Pompliano?

  All right. So in all, in all seriousness, you have store value, you have medium of exchange. The third thing, which we talked about earlier was speculation. I actually think that is a use case, no different than a bunch of other assets.

• 42:26Speaker 06

  No, if there's no use to the, if it's, if it's completely just.

• 42:32Speaker 06

  Funny money, like Herbalife at the end of the day, or in Tupperware, my mom was Tupperware, you know, pyramid scheme, it was great. We ended up with Tupperware at the end of it. Or you end up with a bunch of Herbalife. Yeah, it's more Herbalife than you need for yourself, but who cares? You have some Herbalife. With Bitcoin, you have nothing. I mean, at worst, and then even worse than that, though, you've basically legitimized and normalized money laundering so that it's easier if you were to make Bitcoin successful, it'd be easier to get drug money to be able to buy that big house in Miami.

• 43:06Anthony Pompliano?

  It's harder. Like, if you go talk to, and I've talked to FBI, DOJ, any of these folks, you go talk to them. They would prefer people use Bitcoin over any other currency in the world because it is easier to track. What criminal wants to conduct criminal transactions on a public ledger that is immutable? It never can be changed. And people can go back and look all the way from the beginning, every single transaction that was done. That's how all these guys are getting caught, is because they're using-

• 43:30Speaker 06

  I mean, I mean, there's just billions and billions. I mean, just, just people can Google crypto billions stolen crime, and you just end up with too many news articles than you can read.

• 43:44Anthony Pompliano?

  But hacks, hold on. Hacks are different than money laundering. The former CIA director did a study, and he estimated that point oh, or I'm sorry, point four, less than half a percent of all transactions on the Bitcoin blockchain have anything to do with nefarious purposes. So not just money laundering, any nefarious purpose, point four percent compared to, they estimate $2 trillion a year in fiat currencies. And so when you-

• 44:11Speaker 06

  Well, yeah, because, yeah, but that's not relative.

• 44:14Anthony Pompliano?

  Why is it not relative?

• 44:17Speaker 06

  Well, you're, because there's a lot more fiat currency.

• 44:19Anthony Pompliano?

  Okay, but how, how much more fiat currency? Eighty, there's 80 trillion dollars?

• 44:23Speaker 06

  I mean, Anthony, there's no- There is no utility to this thing.

• 44:30Anthony Pompliano?

  Okay, would you, would you argue that there is utility? If you buy your house and you live in it, there's utility from living in it. But also a use case of buying your house is the belief that it's going to go up in value. So if I buy Bitcoin and I just hold it.

• 44:45Speaker 06

  You can't then go get rid of the house part of that story and then go, well, because it's also a speculative asset.

• 44:51Anthony Pompliano?

  Of course I can.

• 44:51Speaker 06

  Things that are only speculative assets. Tulips had value, Herbalife has value, Tupperware has value. Pyramid schemes, even Madoff, I think that they ended up, people ended up getting back like 80% of, you know, their money. Crypto ultimately should be zero. Like if people were rational, it would have like zero value, except for maybe some value as like an art project. But it would really have zero value.

• 45:15Anthony Pompliano?

  So you, so just so I'm clear, you think that anti censorship, anti Caesarship, private property rights and expression in the digital realm of free speech, those have zero value.

• 45:27Speaker 06

  Well, like I said, I would give it a little bit of, of value like as a Burning Man project.

• 45:33Anthony Pompliano?

  All right. So we're not at zero. So we got some value.

• 45:36Speaker 06

  Like one of those things, like the Burning Man. It's like a kind of like display of kind of digital interestingness and, but it's also very wasteful in terms of, I mean, I'm not opposed to energy consumption. But I just don't think, it just doesn't, it's not, it's just, I, I, look, I just don't think, I think in general, you just don't, there's no point to it. So it's like, it's like, you can talk about all these other benefits, like the speculative value or the, or the exchange value. But if you don't have, if it's not a thing, you know, if it's just a bunch of bullshit. And it's, or it's an art project, then it should be valued at an art project value, not at anything beyond that.

• 46:15Anthony Pompliano?

  Well, how do you respond to the fact that the, that Bitcoin has been the only disciplined, independent central bank over the last three years during all this chaos and uncertainty?

• 46:28Speaker 06

  Um, it's, it's not a central bank.

• 46:33Anthony Pompliano?

  Why not?

• 46:33Speaker 06

  You might want it to be.

• 46:34Anthony Pompliano?

  Why is it not?

• 46:35Speaker 06

  That's a fantasy, but that's not what it is. A central bank is the Fed or the European Central Bank.

• 46:42Anthony Pompliano?

  Well, those are human, human led central banks that have two activities, right?

• 46:45Speaker 06

  No, it's just, that's just, that's just word salad that you're using in the same way that people say cryptocurrency when it's not a currency.

• 46:52Anthony Pompliano?

  Well, currency is anything that people transact for goods or services, right?

• 46:56Speaker 06

  Nope.

• 46:57Anthony Pompliano?

  No, what, what is a currency?

• 46:59Speaker 06

  I mean, it's not a national currency.

• 47:01Anthony Pompliano?

  Well, national currency is different than a currency.

• 47:04Speaker 06

  Yeah, I mean, um, I think that the point is that it's, it's meant to mislead.

• 47:11Anthony Pompliano?

  No.

• 47:11Speaker 06

  That language.

• 47:13Anthony Pompliano?

  Take the central bank example.

• 47:14Speaker 06

  Here's the things that are meant to mislead.

• 47:16Anthony Pompliano?

  Okay.

• 47:16Speaker 06

  The word currency, the word central bank in reference to digital assets. Cyprus, um, claims that there's more fiat currency, uh, crime than, uh, than, uh, than crypto, uh, uh, digital asset crime. These are all things meant to distract people from the fact that there's no there, there, that there's no, there's no product of value here. It's just a kind of fantasy. It's a postmodernist, media-driven pyramid scheme on top of a criminal enterprise on top of an art project slash nothing burger. You know, and I, look, I mean, this is why it's good to talk.

• 47:59Speaker 06

  And unfortunately I have to go back to working on this article I'm, I'm working on. But I mean, um, the great thing about free speech and we agree, we agree on all these things. I can tell you that your product is worthless. I mean, that's the best part of it.

• 48:12Anthony Pompliano?

  Yes.

• 48:13Speaker 06

  And you can disagree.

• 48:15Anthony Pompliano?

  But I also can, and free speech is I can fight for your right to say that a hundred percent like we, we are fully aligned.

• 48:20Speaker 06

  Right to, and I'll fight for your right to sell, you know, nonsense.

• 48:27Anthony Pompliano?

  No, I, I, I think that, um, I, I don't think that we are going to come to, uh, uh, eye to eye in terms of what Bitcoin's value is. The one thing that I would say is, um, your view of the world in terms of many of the things that you've described today. I actually think align much more with the Bitcoin or view of the world than you may realize. Uh, and.

• 48:48Speaker 06

  No, I have many. Like I said, family and friends.

• 48:52Anthony Pompliano?

  Yes.

• 48:52Speaker 06

  Malachi is like probably one of the smartest people I've ever met.

• 48:56Anthony Pompliano?

  I agree with that.

• 48:57Speaker 06

  It's not a, um,

• 49:00Speaker 06

  you know, um, he's just trapped in a really bad idea. And, and ideas are really powerful. I mean, people get trapped in all sorts of bad ideas. I've been trapped in bad ideas. I've just been working my way out of them by writing two books about those bad ideas. But ideologies are powerful.

• 49:21Speaker 06

  But reality is more powerful.

• 49:23Anthony Pompliano?

  I think that's, I think that's a great place to leave it, Michael. Thank you so much for taking the time to do this.

• 49:28Speaker 06

  Appreciate you, brother.

• 49:28Anthony Pompliano?

  I really enjoyed it and hopefully we'll meet in person at some point.