WBD626 Audio Transcription

WBD Live - NYC: Junseth on Ordinals with Junseth

Release date: Friday 3rd March

Note: the following is a transcription of my interview with Junseth. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.

Junseth is an OG Bitcoiner and the former co-host of Bitcoin Uncensored. In this live interview, recorded at Pubkey in New York, we discuss the latest Bitcoin phenomenon - ordinals. We also talk about the philosophy of Bitcoin: what it’s for, what it can be, and how it’s still the only blockchain that adds value to society.

“Bitcoin for the first time gives you the sovereign and particular right to your finances to spend, to trade, and that’s something we didn’t know that the government couldn’t take away from you. Bitcoin is the manifestation of the God-given right to have your value.”

— Junseth

Interview Transcription

Peter McCormack: How good is Junseth at singing?  

Junseth: Hey, everybody.  I heard people paid for this!

Peter McCormack: So, we always have him on the podcast but we don't actually want to talk to him about Bitcoin.

Junseth: No.

Peter McCormack: We just want to hear him sing. 

Junseth: This is a big room.  Have you ever done a live show?

Peter McCormack: We did a little one in Nashville last year; that was like a first test.

Junseth: All right.

Peter McCormack: Now, we're preparing to do a run; this is the next proper test.  There's a little special thing about this one this evening.  So, does anyone know the reason why I started a podcast; does anyone know who inspired me?

Audience member 1: Rich Roll.

Peter McCormack: The mother fucker's here!

Junseth: Oh wow!

Peter McCormack: So, for those who don't know, have you ever seen one of those creepy films where someone tries to steal somebody's life?  I couldn't do the vegan ultra-athlete version so I did the fat degenerate Bitcoin version.  But I met Rich in Italy five, six years ago?

Rich Roll: It's all a blur!

Peter McCormack: Rich had put on an event, it was a yoga, meditation, vegan retreat.

Junseth: He looks very flexible to me; I've never seen him before.

Peter McCormack: He looks younger than me.  And it was an amazing thing, and at the end of it, he might have said this to everyone, but he was like, "If you're ever in LA, look me up".  So, I got back to Bedford and immediately booked a flight to LA.  I said, "Hi, I'm here!" and I was like, "I want to be a podcaster, how do you do it?"  Rich sent me a course and the equipment I needed, I went on Amazon and bought it all.  And then, coincidentally, Luke Martin's here behind him, I contacted Luke and I was like, "I want to make a show", and Luke said, "Let's do it", and both people are coincidentally here so I'm very proud of that.

Junseth: Nice.

Peter McCormack: It's very cool.  So, this is our first one of these live events; I feel under a lot of pressure with Rich here because he's my podcast idol.

Junseth: He looks very non-judgmental though, Peter.

Peter McCormack: He is, he's here judging me!  So, this is the first of many live events we want to do.  I think it's a really cool thing to get out and see some of you.  We asked Junseth to come in.  You all know Danny, producer Danny.

Danny Knowles: What up!

Peter McCormack: Jeremy's on the camera somewhere.  We don't really have any house rules but we've learnt what works and what doesn't; I shouldn't run the ticketing on the door is one of the things.  But anyway, listen, what we're going to do, me and Junseth are going to have a chat about Bitcoin and some Bitcoin stuff, I'm going to go totally off script with all of it, and then we'll open up the floor, we'll do some Q&A, and if you don't have many questions, we'll go back to --

Junseth: Singing!

Peter McCormack: We'll do a bit of Bitcoin karaoke.

Junseth: It's fun.

Peter McCormack: And then we'll go from there.  So, how have you been, Junseth?

Junseth: Good; I'm enjoying this tradition, oh.

Danny Knowles: Before we start, can I just shout something out, we're filming everything, so if anyone doesn't want their face on camera, can you put your hand up and we'll try and make sure you're blurred out in the video.  We got one!  That's good.

Peter McCormack: Yeah, and if you haven't got a seat, I'm sorry.  I think a few people have turned up without tickets and walked in, but so be it.

Junseth: This isn't great for my OPSEC.

Peter McCormack: Steal the CD, I believe in that.  How are you, man?

Junseth: Good.  I feel like this is becoming a tradition now, so like this is, what, episode four I think I've done with you.

Peter McCormack: Four or five.

Junseth: Five, four.

Peter McCormack: Junseth is the original Bitcoin podcaster; if you've never listened to Bitcoin Uncensored, it's still the original, still the best Bitcoin podcast ever.

Junseth: Best podcast ever!

Peter McCormack: Ever!

Junseth: Yeah, it's been a while though; I think we haven't done it since 2017, and then we, Chris and I famously didn't talk for many years and then we came together on your show and did a show together, and then --

Peter McCormack: In Miami, Florida?

Junseth: You came to Fort Lauderdale, we huddled in a room, took our clothes off.

Peter McCormack: We took our clothes off!

Junseth: Sat there at a little table about that big.

Peter McCormack: The thing that makes this weirder, we didn't used to video our podcasts then, so we literally just took our shirts off and made a show.

Junseth: That's true.

Peter McCormack: Yeah, Junseth is an inspiration to all who did it, but yeah, this is like number four, man.

Junseth: Yeah.  This is fun though; it's weird to see a lot of people in the room.

Peter McCormack: It's weird to see people who actually care.

Junseth: Yeah.

Peter McCormack: So, we were going to talk about Bitcoin and democracy, but I think it would be ridiculous if we didn't actually start with Bitcoin and ordinals because this is the hot debate.

Junseth: Oh, yeah, everyone's talking about ordinals, yeah.

Peter McCormack: Everyone's talking ordinals; I had a hot discussion with Rob Hamilton today.

Junseth: I heard.

Peter McCormack: Lucky there was a table between us, got a big feisty.

Junseth: I heard you were an ass.

Peter McCormack: No, I was factual.  Shall we explain what ordinals are to everyone in the room?

Junseth: Yeah, sure.  So, ordinals, as I understand them, and I guess Rob is here so he can correct me if I'm wrong, but ordinals are basically inscriptions, pictures that you put that are permanently in the blockchain and they're contained in the signature header, I believe, or in the header of -- Rob says, "Kind of" -- but they're in the signature section, so they're permanent, but they're prunable.  There's a lot of controversy because a lot of people think that this is blockchain bloat and that this is not what Bitcoin's for; I think you might be one of them.

Peter McCormack: If you say one side is completely against it and one side's completely for it, go to the centre ground, I'm just to the left, I'm just kind of against it.

Junseth: Why are you against it?

Peter McCormack: I think what it is is that the more I've done this show, the more I've made this show, it's been about how, if we're trying to create the best form of money, if the goal is let's create the best money, and as I go round and do podcasts and films and meet people, I always say, "We're trying to make the best form of money", I was asking myself, "Does this make Bitcoin better money, net better or net worse?" and I think I just come out on net worse.

Junseth: Yeah.  I think it does nothing, I think this is a Beanie Baby, I think it's a point in time.

Peter McCormack: By the way, how many Beanie Babies do you own?

Junseth: I have a lot of Beanie Babies, I'm a Beanie Baby collector; there's actually a Financial Times article about my Beanie Baby collection. 

Peter McCormack: This is a true story.

Junseth: I've been collecting Beanie Babies for a really long time.  Back in the 1990s, as a kid, I was making my dad run around to get the Ty Beanies and everything else, but for me Beanie Babies are an important reminder, particularly about collectables, that you don't become attached to things.  I remember back in the 1990s, I would watch these people go buy Beanie Babies and they would tell me like, "Humphrey the Camel is going to pay for your college someday", they'd say this to their husbands or their wives like, "That's why I'm collecting all these", and they didn't.

Now, I have this little blog I run, it's a Beanie Baby blog, and I get emails probably three to five a day of people sending me pictures of their collections and asking me how much they're worth, and the answer every time is $5 to all of them.  I'm not kidding, they have stored these things for 25, maybe 30 years, and they have these 3x4 plastics bins, they'll have like 10 of them filled with the same Beanie Baby, and every day, 3 to 5 of these emails.  So, Beanie Babies for me are this important reminder that you don't have stay attached to things, and for me, it's been an important lesson, particularly as a lot of this NFT stuff has happened, and now ordinals have happened, I think a lot of people look at the ordinals.  There are people making money on this, they're selling these satoshis at a premium and they're making money selling these satoshis.  I think there's a lot of FOMO; it's easy in the space to get excited and feel like you're missing out. 

But I look at this stuff and I'm like, "I've seen this before; this is just Beanie Babies".  It's temporary, might last five years, might be ten years, doesn't matter, ordinals to me aren't important and they're just a blip.  I also think it's a really good thing because Bitcoin is supposed to be an antifragile system, and if ordinals are bad, then this doesn't work; if ordinals break Bitcoin, Bitcoin is broken.

Peter McCormack: The thing I push back about against that is I think ordinals came by mistake.

Junseth: It doesn't matter.  If you find a hole in Bitcoin, I think as a good bitcoiner, it's your obligation to exploit it, stick your finger in it and wiggle it around.

Peter McCormack: Maybe fix it.

Junseth: It's up to someone else to fix, you don't know what the fix is; here's the thing, there's no specific fix.  If you think about the fixes to ordinals, we can fork, that's a terrible option; what are going to do, like reduce the chain size?  I don't know, maybe add some opcodes and allow drivechain or something like that?  I don't know.  What's the fix?  The only way that we'll know is by fighting it out in the community, so it has to be a public battle. 

Not just that, it could very well be that people are going to dedicate themselves to the fight for or against ordinals, and what we find out is that the fees in maybe the next bull run or whatever the hell it is, that the fees start taking care of it.  These things are going to be very expensive to mint in a world where people are using the chain.

Peter McCormack: Let's have a show of hands, who likes ordinals? 

Junseth: Gays!

Peter McCormack: Come on!  Who thinks they make Bitcoin better money; so not a single person?  I think they're too embarrassed to say.

Junseth: Who thinks they make Bitcoin worse money?  Oh, okay, two. 

Peter McCormack: So people just don't want to put their hands up!  Who doesn't like putting their hands up?

Junseth: Who's neutral on ordinals?  There you go. 

Peter McCormack: Yeah.

Junseth: I think that's the right position, I think neutrality on this is just sit in the middle and just watch it happen.  There are a lot of things in Bitcoin that I've watched over the years that have been big fights; way back in the day, Counterparty XCP was a big one, Colored Coins, Luke Dashjr putting the Eligius prayer in the blockchain many years ago, go look at those discussions in Bitcoin Forum, people were really, really mad.  I put Genesis One in the blockchain many years ago.  Lots of people have done this, you can write messages on Bitcoin; for years you've been able to do this stuff.

Peter McCormack: You should try and break it.

Junseth: Bitcoin is there to break; try to break it, I dare you.  I talk about the regulation of New York, people come up to me, like, "Oh, New York's about to regulate Bitcoin, they're not going to let miners in", I'm like, "Okay, great.  There's never been a better time for governments to regulate Bitcoin than now, try it, go ahead, let's see what happens".  If Bitcoin breaks because of regulation; if Bitcoin breaks because of ordinals; if Bitcoin breaks because Luke Dashjr puts a prayer on it; if it breaks because XCP does whatever; if it breaks because of these, this doesn't work, it's not an anti-fragile system.  Either this is money or it's not, and if it's a precious little baby then it doesn't work. 

There's no other chain that's tested, and that's the thing, this is why Bitcoin maximalism for me is sort of a bit of a sacred cow because no other chain has been tested or will be tested to the degree that Bitcoin is and has been, and there's absolutely no other chain that can withstand the scrutiny of Bitcoin.

Peter McCormack: It goes back to what Harry Sudock says.

Danny Knowles: "Everything's good for Bitcoin".

Peter McCormack: "Everything is good for Bitcoin".

Junseth: Everything's good for Bitcoin; he's right.

Peter McCormack: Apart from Bitcoin dying.

Junseth: If Bitcoin dies, it's good for us, we should know.  A lot of us have dedicated a large portion of our time to caring about this, and it's stupid to care about it, it's cash money.  This here, we're in a bar, we're at Pubkey, shoutout to Pubkey, and this is a bar dedicated to cash money, we call it Bitcoin, but that's kind of stupid.  Have you ever been to a bar, like, "We're really into cash money, bro', that's what we're into", that's what Bitcoin is, and the reason that we're all into it is because no one else thinks it's cash money but us; we all know the secret, this is cash money, it's great. 

So, we come here together, we high-five each other about how we know it's cash money, well, if there's a world in which Bitcoin is treated as cash money by everybody, if everybody understands that, this is kind of gay, and I mean that in the pejorative sense, like, "We're going to Pubkey, like yeah, Bitcoin".  No, we're just going be like, "This is what I buy and pay my taxes with and stuff", and if that's what we do, that's what we do, but if not, then this is a subculture right now, and it's a subculture because we are touching this dirty stuff; it is dirty, it's money.

Peter McCormack: It's definitely a subculture.

Junseth: At the moment.

Peter McCormack: Yeah.

Junseth: But it doesn't work if it remains a subculture.  I think everyone here is hoping that Bitcoin, someday, is not a subculture.

Peter McCormack: Yeah, I think you can make plenty of solid arguments that the tentacles are kind of stretching out beyond being a subculture.

Junseth: I think it has to.

Peter McCormack: Yeah.

Junseth: If this works, it has to, and I don't really care how it comes in.  Ordinals are really interesting, because if you look at the way that the community's responded, we have a bunch of these new people coming in, previous to this they were in "beep" coins, they were in shitcoins.

Peter McCormack: You can say "shit"!

Junseth: I know that, we don't swear in this podcast!  They were into shitcoins, they were on Ethereum or whatever, they were doing their NFT stuff.  I know a couple of guys that are doing the ordinal stuff, they're shilling on them, they're selling them, they're car salesmen -- Clubhouse, we were sitting the other day, someone described it like, "One of these guys has a trench coat, he opens it up, like, 'Want an ordinal?'" so these guys, they're shilling their ordinals, and these Ethereum guys are coming here, they're buying them.  I've heard that a lot of them are sitting in the background being like, "Yeah, we're going to dump these on these dumb bitcoiners at some point", and all the bitcoiners are like, "Welcome to Bitcoin, we're not buying that shit, but welcome, we're glad you're here".

What these Ethereum guys are doing is they're now being tricked into running full nodes, they're running full nodes, they're supporting the network, they're buying Bitcoin, literally, they're paying more money for a satoshi than a satoshi is worth, like you can sell a satoshi for like 100 satoshis, weird.

Peter McCormack: Yeah, but that's no different to people collecting $1 bills with serial numbers on them.

Junseth: Yeah, but isn't that weird that we have numismatism in Bitcoin?

Peter McCormack: Yeah, but hold on, you collected Beanie Babies.

Junseth: Yeah.

Peter McCormack: Everyone has a thing they collect.

Junseth: Yeah, but I collected them after they were popular, so that's what you want to do.  If you want to buy ordinals, if you want to buy a sub-10,000 ordinal or a sub-500 ordinal, wait 20 years, do what I did, and then they'll be worth nothing!  This is a weird moment in Bitcoin's history because what we're seeing now is fees on the blockchain are going up.  We've always known that fees have to go up, we don't know how. 

The drivechain guys think that drivechain's going to drive fees up and we need to have merged mining, maybe they're right.  Other people have other solutions, other people don't care, they're neutral on it.  I tend to be, with regard to fees, the way that I am with everything in Bitcoin, and I think, "There are more things in Heaven and Earth than even you can conceive of, Horatio", is that the famous quote?  I have that attitude towards Bitcoin.

There are all these problems that we have in Bitcoin, there are all sorts of them, thousands and thousands or problems whether it's fees, whether it's the construction of transactions or whatever the heck is it, the speed of downloading the chain, so many problems, and the solution is not the one that you've conceived of.  If you've conceived of it, so has someone smarter than you, and there are a lot of people smarter than you.  I don't know who you are, maybe you're Albert Einstein, maybe I'm wrong, but for 99% of us, there are a lot of people who are smarter than us, and they've already conceived of this.

So, the solutions are not going to be simple because even the smartest people here don't know them.  We complain about something like fees, it seems like the solution might be, I don't know, Drivechain where you have merged mine, or the solution might be requiring that a normal transaction of higher fees, or something like that, whatever the case is, you might have a thousand solutions, a standard transaction might have higher fees, something like that.  So, maybe those were the solutions, but who thought, who in this room thought that maybe the solution was allowing us to put a picture of Dick Butt on the blockchain?

Peter McCormack: It's 50 Bitcoin for that Dick Butt.

Junseth: I know that, and American HODL's here actually in the audience, he was offered that Dick Butt for 1 Bitcoin and he refused to buy it, so he feels stupid, I'm putting him on blast!

Peter McCormack: I tell you one of the things that I did find interesting was when Rob earlier was explaining to me that there is a big difference between NFTs on Bitcoin than on Ethereum in that the NFTs, the jpeg is on chain whereas it's just a hash on something like Ethereum pointing to a database record.  So, do you think this will actually steal market share away from these?

Junseth: I don't care, it's so stupid, it's so dumb.  It doesn't matter where they are.  There are actually on-chain algorithmic NFTs on Ethereum; who gives two farts?!  The Rocks, they're algorithmic, they're random, they're inscribed on chain on Ethereum, fine, okay.  People keep telling me about all the great uses of ordinals, like, "I could inscribe JavaScript code on an Ordinal in Bitcoin and then you can own the satoshi".  I'm like, "Okay, if I have the satoshi, then I'll own the JavaScript, it'll be mine?"  Well, no, I have the satoshi with the transaction, anyone can see it, it's on the Goddamn blockchain, this is stupid.  I can go download the Dick Butt; but for some reason, if HODL had bought the satoshi that is associated with the Dick Butt, then someone will pay 50 Bitcoins for it; it's stupid. 

This isn't going to last forever, it's a temporary moment in Bitcoin's history, and I don't know if it's just the time, the amount of wars that I've sat through in Bitcoin, the fights I've watched, but I just can't give two wits about it.  This is going to be so short-lived, even if it's five years from now, this is a moment in Bitcoin's history.  People are just excited that they found a way to do something with Bitcoin that we didn't think you could do, but you could always do some weird stuff; if you wanted to pay enough, you could have encoded images into like P2SH transactions or anything else, it's just it would have been $100,000, it just would have been really expensive.

You want to put all the Bitcoin Uncensored episodes on Bitcoin?  You could do it; it would take you a few years probably in different transactions and you'd have to fill up entire blocks and it would just be very, very expensive, but because of the way that we've done the SegWit discount, the ordinals are cheap and it's a moment in history.

Peter McCormack: An irrelevant moment in history.

Junseth: An irrelevant, irreverent, hilarious moment that has created the funniest political factions I've ever seen, like, "Should we or should we not put dicks on the blockchain?" that's the question.  This is a commons, and commons are made for putting dicks on, Rome knew it, we know it. 

I've said this on Bitcoin Uncensored, this is what a commons is, I said on Bitcoin Uncensored many years ago, and you can go back and listen if you can find the episodes, which are hard to find, they're collectables, I said, "A blockchain is a commons, and the commons that will be the best commons, the one that you will bring your sheep to feed on the grass of will be the one that manages how many dicks are on their blockchain".  And Ethereum, full of dicks, there are dicks everywhere on Ethereum.  Bitcoin's getting some dicks now, but it's a temporary moment in history, and Bitcoin has the best dick management, and that's why this blockchain matters.

Danny Knowles: I love that there are people in the bar just having a drink listening to this!

Junseth: Thanks for coming, everybody!

Peter McCormack: Rich, you're so proud of me right now, aren't you?! 

Junseth: But it is a commons, and the thing is, commons are for the lowest common denominator, which means it is for the dicks, that's where we it goes, it has to go there.

Peter McCormack: Do you think part of this is a period where nothing really much has happened?

Junseth: We're bored, yeah, bitcoiners are bored, this is graffiti.

Peter McCormack: Yeah.

Junseth: Yeah, and we like graffiti, some graffiti is art and some is Dick Butts!  No, it is, bitcoiners are bored right now, there's nothing happening, the price is stagnant.  This is like the, what is it, the idle hands are the Devil's playground, leave a bunch of techno nerds who have infinite amounts of time, who probably have more money than they should because they've been holding Bitcoin for too long, and you give them time and a platform that they can do anything they want on, you get Dick Butts on the blockchain; that's just the way it works every time that Bitcoin's bear market -- bear markets are for building; some things are very relevant.

There may be things that ordinals are good for, I don't know, there might be, probably not, maybe, maybe it's more than jpegs.  I'm happy that the technology is there, that people can explore and try things.  Maybe we see inscriptions of, I don't know, anchor links for torrents, but you could do that in OP_RETURN.  There are all sorts of ways, like there are ways to have written things on Bitcoin before; this is the first time that anyone seems to have been excited about it, I don't know why, but this is just a period, and yeah, you're right, it is because we're bored.

Peter McCormack: But do you think, therefore, there are other things we could or should be working on?

Junseth: Well, Casey did the ordinal stuff and Casey decided to spend his time doing that.  This is an anarchic kind of weird place and every developer gets to spend their time doing the thing they want.  If pictures on the blockchain are a thing that one developer thinks are important, and honestly, it's probably important for the reason that I think no one had realised, that this might be the effects of the SegWit discount. 

In Bitcoin, irony is important, particularly when attacking the chain in a sense.  When you do something that people will disagree with or think of as like a problem, it's very important to do it with irony; I think images are a good way for this to have happened.  What other sorts of attacks could this cheap block space have caused; what developer saw it?  Luke Dashjr saw this, he's been advocating for smaller blocks for a long time.

Peter McCormack: Agreed.

Junseth: It doesn't mean you couldn't put images on the chain, but it would mean that ordinals would be much more expensive to put on the chain.

Peter McCormack: Has he blocked ordinals on Knots?

Danny Knowles: I would imagine so, but I don't know.

Junseth: He's got some kind of filter that he's been trying to get people to deploy in their nodes to prune this space.  It's interesting because it brings up other discussions and stuff that we've already discussed, stuff that we discussed on Bitcoin Uncensored but also like other people have discussed. 

One of the features of Bitcoin is its immutability; this is a thing that we've talked about.  Bitcoin is this thing that it moves forward, can't really move back, you can't unglue things from it, once it's in there, it's in there permanently, that's the idea; this is probabilistically true, it's not definitely true but it's more than likely true to the 12:9s.  So, Bitcoin is impossible to unwind, it's immutable, well, certain parts of it are.  What if everybody pruned these parts of the transaction threat; what if everybody did?  What if everyone pruned OP_RETURN?  There are elements of the blockchain that are more immutable than other parts, which I think is another interesting discussion and one that's worth having. 

Meanwhile, all of these people that are into ordinals, again, are running completely full nodes and that to me is interesting that there may have been 10,000 new nodes added or maybe 20,000 new nodes added in the last two weeks, and that just strengthens Bitcoin.

Peter McCormack: Can we get a node count?

Danny Knowles: Yeah.

Peter McCormack: Yes.  Look, you've been doing this for a long time, you've been around for a long time, do you still have passion and conviction for it, or do you tend to sit back and look at it more as an observer these days, like a commentator?

Junseth: I've always viewed myself as John Madden of Bitcoin.  Bitcoin Uncensored, again, was coloured commentary, colour commentary, I didn't mean to offensive racially, so Bitcoin Uncensored was colour commentary for the most -- I always felt like we were sitting in a stadium watching all the players on the field, those players being like Bitcoin, shitcoins, everything else, and just watching them fight and then just pointing at them and laughing.  I still think that that's the proper role, particularly for non-technical people.

I'm not a super technical person, my biggest competency is fart jokes, and Dick Butt jokes now I'm moving into, but that's my competency.  Chris was more technical than I was on the show, but I understand Bitcoin at a more philosophical level.

Peter McCormack: Do you care?

Junseth: Do I care about what?

Peter McCormack: Do you care about some of the ideas people have for Bitcoin, it growing, it becoming money that's adopted wider?

Junseth: I don't care what Bitcoin does.

Peter McCormack: Do you care What Bitcoin Did?!

Junseth: I do care a lot about what Bitcoin did.  I feel very much like the biographer in some ways, or one of the biographers of Bitcoin.  I know that we have something very important, I'm pretty sure, and I don't think that there are any of us that can command it to go in any direction one way or the other.  We're here to kind of serve it in some sense, like Bitcoin is this thing, it's amorphous, we don't really know what it's for.  There are a bunch of people who looked at it, it's like Jed Clampett putting his thing in the ground and up comes up oil, that's kind of what happened with Bitcoin, we see this thing, we're like, "That's weird; what is that?" and you kind of taste it, and you're like, "Oh, it takes like money, weird", and we don't know exactly what it's good for. 

El Salvador's trying to see if it's good for nation states; is it?  I don't know.  I was talking to a gentleman today, said that the crime in El Salvador's way down; is it because of Bitcoin?  Maybe, I don't know.  There are a lot of experiments that we're running and a lot of people are running that are going to teach us a lot about what Bitcoin will do.  There are a lot of things that we've done in the past that teach us what Bitcoin can do, and there are a lot of people just throwing shit at the wall now.

We don't know what Bitcoin is, it's this pseudo invention that I think probably, if Satoshi didn't do it, someone would have done it at some point, put all of these components together, it would have been constructed very similarly, and many of the things that are in Bitcoin would be in whatever that was, so it would almost exactly alike.  I don't know what it will do, and there's no one here powerful enough to direct it in any given way.

So, this thing will, I don't know, maybe it'll do remittances, we don't know; maybe it'll remove the government from remittances; maybe, as the libertarians say, it's going to remove money from the hands of the government printer, maybe; maybe it removes the state from money completely; maybe it puts in the hands of sovereign individuals all of the power, we don't know.  We theorise that these are things that it can do, and we are at the beginning stages of some of the experiments that may make that stuff possible.

Peter McCormack: What would you say it has done then?

Junseth: Bitcoin made it really easy for people who were addicted to drugs to get them more easily, it's true though.

Peter McCormack: But actually, there is a spin on that which is a highly relevant point, you make the joke for people who are addicted to drugs to get them, but actually, what it did is it did remove crime, a lot of crime from drug -- and the Drug Policy Alliance.

Junseth: Other than that evil man, Ross Ulbricht?

Peter McCormack: Yeah, but it took away the person-to-person interaction --

Junseth: The way that money works right now is that the government prints it and they give it to the banks basically to distribute; libertarians and others call this evil, I think it's somewhat neutral, I don't know how else you would do it.  That's called the Cantillon Effect, like basically those that are closest to the money printer, they get the most from the effects of printing money, they basically get to thrive and grift off of, not numismatic value, what's it called, the printing of money, they have the profits of printing money. 

Bitcoin is sort of a reverse Cantillon Effect where those who have been shut out of the money system, they needed something, whether it's immigrants, whether it's people who are buying or selling drugs, so Bitcoin had this weird thing where the people that had most access to it were the people that had the least access to the Cantillon Effect as a whole.  So, it's got this weird thing where like prostitutes got it first, drug dealers got it first, people in the inner city needed it most and got it first, and it's kind of like trickled up and now we're at the stage where it's like family offices are like, "Do I need this in my portfolio?" which is weird because that's the end of the chain.

Peter McCormack: Well, the interesting thing of that is I spoke to somebody recently, they worked on the institutional side, and they said, "Look, there's zero interest from the institutions now.  They took a look and they don't like it", and I think the problem for institution is, for it to be relevant, they have to take a big bet and to take a big bet is a huge risk.  So, it continues to bubble up for those, I mean, most of those have got the smallest amount of money because they've got the least at risk.

Junseth: Yes, but more than that, institutions, when they take a big bet, we're not talking the size of bet that many of us might think of, it's not like, $10 million.  I remember way back, when Bitcoin had a market cap of $5 million, I was on a bus with a banker from Goldman Sachs, a good friend of mine, and I was talking to him about Bitcoin and I said, "Oh, if I were Goldman, I would take a small position in this, it's $5 million, it's so small".  So, he laughs, and he's like, "If we were going to do anything, we would short the whole thing, but there's no money in it", and I didn't realise then how much money they were dealing with, like $5 million is tiny.  And now, what are we?  We're like nearly $1 trillion market cap, but you still can't make easily like a $5 billion, $10 billion, $20 billion bet, $0.5 trillion market cap probably, right, at the moment?

Danny Knowles: Yeah, $450 million. 

Junseth: We were at nearly $1 trillion at one time.

Peter McCormack: We were over, we were like $1.2 trillion at one point, $1.3 trillion, yeah.

Junseth: So, we're small, like these institutions can't make a bet on this yet.  The thing is, back then, when Bitcoin had a $5 million market cap, people at Goldman were laughing, and now they're actually taking seriously the possibility that, at some point, they might have to make a bet.  They're look at it seriously and deciding that they don't like it, fine; that's a really different position than, like, "Ha-ha, that's so small, we can't do anything".  Now, it's like, "Maybe, at some point, we'll have to make a bet and put this into our portfolio".  It's a very different position, and Bitcoin's just kind of knocking away, knocking away, at all of these little financial institutions, and at some point it's going to be required that these financial institutions have some exposure, lest people won't give them their money.

Peter McCormack: It's probably weird for some of the people in here to hear that, Bitcoin being a $5 million market cap because they weren't around then.

Junseth: I thought that was huge, I had $10!

Peter McCormack: How was it; was it fundamentally still kind of the same; was the community still kind of the same or are we in a very different place now?

Junseth: No, it was weirder.  Here's the thing, to come into Bitcoin early, you have to be kind of nuts, and what's been strange to me is to watch adults walk in to Bitcoin and have people come in here who look respectable, they have suits on.  Women came pretty late compared to the men, the men came first, then women are getting here, there are a lot of them; we're getting really competent women now in Bitcoin that are doing things.  This is an asset that was high risk, the most retarded people got in first, they bought a lot of it, and they held and now those same people that are like billionaires now, are like peeing in bottles and holding them in hotel rooms; that's the level of person that was early. 

Now we have people who actually they manage funds; there are people putting together insurance companies, real financial products are coming to this space run by real adults, and Bitcoin is seeing an evolution from the non-professional to the professional class, and I think that's really strange.  It's probably necessary and good, but it's weird, because again, like Bitcoin Uncensored, the whole idea, our idea was that we were the only ones that knew anything about this, so you had to invite us and we'd come in our underwear, and then you're Goldman Sachs, like, "Well, you can't wear that in here", like, "Then you don't get to hear about Bitcoin".  Then they would be like, "Okay, fine, only you can wear underwear into the boardroom".

So that was the idea, it was like, "You tell us that us that we're stupid for playing with this thing, good on you, great, you're right, we're stupid.  Oh, now you want to hear about it?  Great.  We'll talk to you about it but you have to let us do our thing because you guys are the actual rubes".  But the rubes are here now and the professional class is here, and they still haven't figured it out, they have to go through their shitcoining; shitcoining has to happen before you Bitcoin, I don't know why, it's a necessary thing, everyone has to go through it, and so all the professionals are here and they have to shit on Bitcoin for a few more years because they have to lose all their money first, just like all of us did. 

They have to find out why Ethereum is total BS, they have to find out why Ripple is stupid, they have to find out that all of these things that they think are done on blockchain either can't be done on blockchain or Bitcoin can do, and it's going to take them a while.

Peter McCormack: I was in the Moxy the other night just as we'd finished a day, and I was just sat in the bar on my own and some girl came up, she wanted to charge her phone and she says, "Oh, what are you working on?"  I said, "I'm just doing a bit of work, I've got a podcast".  I said, "What do you do?"  She said, "I work in film".  I was like, "What kind of films do you make?"  She said, "We're making a film about AI and the cross-section with blockchain", yeah.

Junseth: Told you, HODL. I've been predicting this next pump is going to be AI projects.  Every pump with Bitcoin has come with a level of stupidity, and another stupid thing, so the last couple of pumps ago, it was ICOs where everybody was going public, they weren't going public but they were selling you crap, and all of those went to zero; this last one, it's been NFTs.  So, we've been debating what the next one is; I think it's going to be blockchains that promise rides to the moon, literal rides, and do AI.

Peter McCormack: We found out what it is, didn't we?

Danny Knowles: What's that?

Peter McCormack: The IFO.

Danny Knowles: The IFO, the Initial Farm Offering.

Junseth: Farm?!

Peter McCormack: Yeah, Initial Farm Offering.

Junseth: Farm stuff is getting big now, people like that; none of these have anything to do with blockchains.  And you know what's funny, there's a company out there called Masterworks; have you ever heard of this?

Peter McCormack: Yeah.

Danny Knowles: Yeah.

Junseth: Masterworks started offering fractional art, every art piece is an LLC, you can go on their website and buy it, and I look at this site and I was thinking, I was like, "Oh, this is a blockchain company".  It's very clear to me, I haven't talked to the founders, but I guarantee you, if you talk to them, I'll bet you $1 million that that idea started out as, "Hey guys, we could do like fractional ownership of art on a blockchain".  Then, as they walked through it, they realised that there actually is a business there, but it's using the traditional structures, wrapping them in an LLC and then putting a market online and letting people trade fractional ownership in art; that's what you can do.

You can do the same thing with farms, you can do the same thing with everything, but for some reason, this notion of the blockchain enabling this has persisted to this day, and it's absolute inanity because it has nothing to do with any of these business models other than it reflects the business model, it looks like that business model.  Maybe that's where Bitcoin or blockchain has contributed in that it opened up the minds of entrepreneurs to be able to do this fractional-ownership stuff.  I think there are a lot of uses for fractional ownership of a lot of things, but you don't need the blockchain for it, you just need a MySQL database.

Peter McCormack: So, where do you hope things go then, because you've been through a lot of this, multiple cycles, you've been through all the different kind of shitcoin projects, all the narratives that proved wrong; what do you kind of hope would happen now; what's your advice?

Junseth: My thing here has always been I feel like I see the future in Bitcoin.  When Vitalik coined the term "Bitcoin maximalist", it was actually a day or two after he had a debate with me and Chris on Skype.  We've always said, and I'm fairly certain because the description in that article is basically of the debate, that he was talking about us, so we always said that we were the first Bitcoin maximalists for that reason.  I think the reason that I latch on to this notion of Bitcoin winning ultimately is because it's so clear to me that none of this other stuff has any value, and it's just going to take so long. 

So, what do I want?  I want to be right about that.  I think that once we can move past all of the money grubbing, grifting and lies about what blockchains do, once we can cut away the brier of that just shit meadow, I think that's when we can see this technology actually begin to change the world.  Until then, I think we are in a world where I fear for the possibility of a 1990s Albania where we see trillions of dollars flow into what amount to Ponzi schemes and the entirety of economies getting crushed because people are chasing wealth.  If you want to know what that looks like, just look at this last time; this last time around, people were putting their money into these Ponzis, obvious Ponzis, LUNA.  And was it Mike Alfred who had the tattoo?

Danny Knowles: Novogratz.

Junseth: Mike Alfred always confuses me. 

Danny Knowles: He confuses a lot of us!

Junseth: Yeah, Novogratz with the LUNA tattoo on his arm, and this was like a professional class investor that people have for many years told me is very smart.  Maybe he is, maybe he's the smartest guy in the world; I've been in the rooms with him and the shitcoining has always bothered me because I thought a smart person would be beyond that, but he loved LUNA so much that he a put a tattoo of it on his arm.  And thousands and thousands of other people did this; there were millions and millions of dollars locked up into this. 

Peter McCormack: Billons.

Junseth: Billions, I didn't want to say it, but billions of dollars.

Peter McCormack: Yeah, what was it, $40 billion market cap at the top? 

Junseth: As much as Madoff.

Peter McCormack: Yeah.

Junseth: Madoff's Ponzi was, what, $40 billion-ish, and there are some major differences, like for example, Madoff took money from people who were wealthy; LUNA took money from people who were wealthy that week because they were people like me living in their mum's basement.

Peter McCormack: Sorry, I'm going to challenge you on that; Madoff took money from people who weren't wealthy as well.

Junseth: A lot of them, yeah, there were people that weren't wealthy, but they had their money with him for like 20 years, a lot of them, but a lot of the money he took was people that were wealthy.  When that collapsed, families that were previously very wealthy lost everything, royal families lost money on Madoff.  In Bitcoin, there were some people like that, but in Madoff, I think that was probably the majority.  In LUNA, it probably is the minority of people putting money in were these big whales who came to Bitcoin with billions in their pocket and were just really excited and put all their money into LUNA.  A lot of the people in LUNA were these people who came, they were retail, they put a little money in, they got rich, all of a sudden they had millions of dollars, and then when LUNA collapsed, they lost everything.

Well, I worry about the world where we have a LUNA come along and people with real money finally get here and start throwing their money in.  And when this all collapses, this Ponzi, we see a huge just destruction of wealth, and I think that that could very well happen in the next few cycles if we continue to see the scams perpetuate like we've been seeing.

Peter McCormack: Well, that is what Elizabeth Warren said.

Junseth: Yeah, but she's crazy.

Peter McCormack: Potentially, yeah, it depends how you see it.  Look, I think she's factually wrong on a few things, but her point was, if these crypto projects get so big and they collapse, you could cause systemic risk throughout the economy, and it's a fair point to make.

Junseth: She's correct, but if she cared, she would learn what the technology does.  When she talks about Bitcoin, she sounds like a geriatric idiot who stuck her face in a toilet for five years and brought it up and decided to equivocate on something that she's never heard of; someone said, "Bitcoin", and she's like, "I'll have an opinion on that".  I don't fucking know where she got that or heard --

Peter McCormack: The truth of this is, because we've been diving into this, the truth is most of these senators, their opinions come from their staffers.

Junseth: I agree, but what she needs to do, if she wants to actually have an opinion on this that makes sense, that allows her to propose regulation that would matter, these people need to actually learn what the tech does.

Peter McCormack: I disagree with her, but my empathetic side is that I know how many different issues they're having to deal with, they cannot learn every issue, so they have to have staffers who kind of come up with their opinions and policies.

Junseth: Oh, yeah.

Peter McCormack: And they represent them.  So, we could say she should learn that, but there are so many things she should learn.  I'm saying I think if we need to turn this ship around, it's about educating the staffers.

Junseth: That actually might be true, that might be the attack vector.  I mean, I'm not a lobbyist but I imagine that if you are it's probably a pretty good suggestion; the staffers do need to learn it.  The thing is, the rule, "You have to shitcoin before you Bitcoin" I think is pretty hard and fast, which means we're many years away from getting competent staffers because they will have to shitcoin, they have to believe that everything is possible.

Peter McCormack: Well, they already are with the US dollar.

Junseth: That's what you believe!

Peter McCormack: All right, listen, let's open it up to the floor.  We've got a lot of people.

Junseth: Nice.

Peter McCormack: If anyone wants to ask a question please put your hand up, and if nobody asks a question, I'll go back to Junseth.

Junseth: Freddie Mercury in the back? 

Audience member 2: Don't you hate it when that happens?  In Brooklyn, it's actually really good camouflage.  But my question for you is, talking about the real wealth destruction, Junseth, that could really destroy capital, what order of magnitude of wealth are you talking about?  From just friends of friends working in the industry, hearing about the number of people who lost tens, if not hundreds of millions of dollars in FTX, not to mention LUNA and the various other shitcoin collapses over the last 12 months, I'm curious, what order of magnitude of rug pull do you think would lead to that?

Junseth: So, this is what scares me, is that every time Bitcoin gets bigger, the risk gets bigger.  How long have you been here; how many cycles have you been through?  I don't like to call them cycles because I think that's stupid, but they kind of have been cycle-y for the last ten years, so how many have you been through?

Audience member 2: Class of 2017.

Junseth: Class of 2017, all right. 

Peter McCormack: One!

Junseth: Yeah, one big one, right? 

Peter McCormack: It's like most of us.

Junseth: Yeah, if you've been here a little longer, what you would have seen is basically every one of these cycles ends because of something happening, something collapsing, Mt. Gox collapses, leverage happens and everyone is leveraged out to the tits, and all of a sudden everyone loses everything and whatever.  In this last cycle, we find out that FTX was basically propping the market up and leveraging and all of these wrapped Bitcoin-type things are just like paper Bitcoin.

So, there's this leverage and leverage, and it's somewhat unregulated.  So, what happens is every time Bitcoin pumps, the leverage enters a system and it gets bigger and bigger, and this time it's, what, 10X bigger than the previous time.  So let's say we do this again, we go from $1 trillion to $10 trillion, the amount of leverage in $10 trillion in a system that's like $10 trillion is going to be magnitudinously larger than at $1 trillion.  I don't know, if we get to $100 trillion, I don't know if that's possible, I don't know what the upper limit is, think about it at that point, LTCM was, I don't know, like $3 trillion and we thought that was going destroy the American economy.

If there's enough leverage in the system where, let's say that we get to $100 trillion and it is in fact mostly weird leveraged bets that got us there somehow, I think Elizabeth Warren's right, that's a huge systemic risk.  I don't know what that looks like, but it scares me because, at that point, the FOMO is all of America, everyone's in, your mum's in, your dad's in, my dad's in, I told him not to do it but he did it anyway because he's an asshole.

Peter McCormack: A bit like the housing bubble where everyone was in.

Junseth: Exactly, but at many magnitudes larger, and it's weird to think that that's a possibility, but I think that every time I've watched Bitcoin go up and I've watched more and more people get in, and I've watched my friend's 65-year-old mum insist that she get to buy and just the number of people that start to come here, the number of old people that come into our Clubhouse rooms are we're doing those and say they want to liquidate their 401(k) at the top or that they want to sell their home and mortgage their home at the top, I just see leverage on leverage.

Everyone seems high impetus to get into leverage the top and low impetus to get into leverage at the bottom because we're stupid.  I think leverage on both sides is probably pretty stupid, but we're stupid.  So this is for some reason what we do, we get into leverage at the top, we don't at the bottom, we're scared at the bottom, and I could just see it getting really, really scarily bad.

Audience member 2: So, then is there ever an escape velocity or does the cyclicality just continue and you're basically making a case of the same sort of inhale, exhale continues as Bitcoin stills gaps up; or is there eventually a point where a hyperbitcoinised world has a lower time preference and people don't lever long into bullshit Ape jpegs?

Junseth: Call it the forever pump.  I dream of a world where there's an ever pump, I dream of it, I think that it would be really cool if Bitcoin just kind of like got into its groove and was going up at 8%, 9%, 12%, 15%, 20% per year for a while, it would be great.  But the problem is Bitcoin's behaved a certain way and I don't know that it's going to continue.  I don't believe in universal promises, I don't believe that the Lord of the Universe is going to force Bitcoin to act the way it's always acted, I think it could change in any given moment, but so far, it's acted this particular way. 

The only thing that I can think is that it's probably going to continue acting that way a for a little while and maybe there is an ever pump on the other side of this where we just all sit back and Bitcoin goes forever up and we just all become multibillionaires as it does that, that's great, or maybe there's not that world, and I just don't know.  But what I do know is that the behaviour that I've seen in previous pumps scares the hell out of me; when I think of Bitcoin doing this again two or three more times, and Bitcoin becoming a $10 trillion or $100 trillion, I'm not a money guy, I don't know how high that could go, but the higher it goes, the more scared I am.

I see the misbehaviour now with people taking all of this extra money that they have and putting it into jpegs and Monkey Butts and whatever the hell it is that they're buying.  I see collectables like Rolex watches going up unprecedented amounts; I see my Beanie Babies now worth quite a bit more than they used to be; I see all sorts of things, baseball cards, Pokémon cards.  There's no world in which the S&P 500 should be outpaced by Charizard Shadowless First Edition.

Peter McCormack: If you go back to Jeff Booth though, he says when money isn't scarce, everything else is.

Junseth: Yeah, so people put their money in rocks, and that to me, I don't know what that misbehaviour means.  All these bitcoiners like to say, "Oh, that's Weimar Germany", I don't know, I'm not historically knowledgeable enough to know whether this is a perfect echo of Weimar Germany, but it's misbehaviour and I don't know why and I don't understand it, but I think it means something.

Peter McCormack: Well, it's a reflection on massive QE which has been running since 2008.

Junseth: Maybe, maybe not, I don't know what it means.  You might be right, but we've been printing money for centuries, we've always had some sort of money printing since the early 1800s, whatever it is.

Peter McCormack: But if you track, there were always periods of surplus, periods of deficit.

Junseth: Sure.

Peter McCormack: We've only had deficient now for two decades. 

Junseth: That's true, and maybe this is the extent of a giant deficit, maybe this is what happens, maybe everyone's right about Weimar Germany, I don't know.  But I cannot conceive of a world where over multiple years, Charizard First Edition Shadowless Pokémon cards outpace the S&P, and that weirds me out, especially by how much it's outpacing. 

Collectables are collectables, they're not supposed to really be stores of value for long periods of time; there are maybe exceptions to this, like maybe art is an exception, I don't know.  There are sort of like these objects that we've kind of used as bank accounts, houses, art, whatever, maybe those are exceptions.  Maybe Bitcoin sucks the monetary value out of that stuff, I don't know, but I don't think that the exception should be a Pokémon card or a Royal Blue Beanie Baby or Peanut the Elephant; this is weird to me, and it doesn't seem like good behaviour, not just by people but by an economy, like an economy shouldn't behave that way.

Peter McCormack: Yeah, that's the point.  I think it's a reflection of the economy rather than people; people have always collected.

Junseth: Degenerateness shouldn't be rewarded, if that makes sense.  Oh yeah, beer.  Is it orange pill; is that what she said?  Oh yeah, that's great, my favourite too.  But yeah, degenerateness shouldn't be rewarded to this degree, and what's interesting right now is like, generally, when you look at a gambler, the gambler walks into a casino, he takes his $100,000 and that gambler pulls the lever on a few things.  Over the course of a night, he loses that $100,000, it might take 40 hours or something like that, or maybe longer, maybe it's a week, but he loses that money over time.  Degeneracy is supposed to be that, you lose the money that over time you put in, or at least you break even, best-case scenario. 

But what I'm watching now is an economy where degeneracy is rewarded to a degree that I'm uncomfortable with.  I see peopling aping in, if you will, to these ordinals, doing all sorts of things that should not inure to you huge benefit, but it is, and then the people buying from those people aping in or selling them are then turning around and selling them for more to the next idiot, and those people are turning around and selling it for more to the next idiot; it's degeneracy that I've never seen and it should not be rewarded to that degree, I don't think, in a logical world.

Peter McCormack: But it's happening at a time where degeneracy is being rewarded from within government, and this isn't conspiracy, you can go and look at the trading records of every senator, almost every senator within US Government, their trading records.

Junseth: I don't know how to drink this.

Danny Knowles: Not like that!

Peter McCormack: You're meant to tap that in.  But the trading records of every senator, almost every senator in government --

Junseth: That didn't work!

Peter McCormack: -- had outperformed the S&P.

Junseth: Well, for different reasons though.

Peter McCormack: Yeah, they have good information.

Junseth: Those people are trading in non-material public information, right?

Peter McCormack: Of course.

Junseth: Yeah.

Peter McCormack: But what I'm saying is is you're seeing open corruption from what you would probably class as now celebrity politicians.

Junseth: I agree.

Peter McCormack: And you're also seeing that there's no punishment for the mistakes they make in government.  You're seeing massive mistakes from within the Fed or the central bank in the UK, and we're now at a time where it's rubbed in our faces that there's a group a people making group decisions for them against us.

Junseth: Yeah.

Peter McCormack: And the implication for us is people can't afford houses or education.  Like in the UK, people can't afford to feed their children or heat their home, they have to make choices, and so I think it's no wonder, if you have degeneracy within your government, you're going to have degeneracy amongst your electorate.

Junseth: But it's a different kind of degeneracy.  There's degeneracy that is legal, that's codified in law, like, "If you behave this way, you will make money", and then the senators, they make that rule for themselves, they go out, they make money by making bets on things of value.  Whereas, the degeneracy I'm talking about is literally like the casino says, "Hey, everybody, if you come into our casino, we're actually paying out 63% to you.  We are going to go bankrupt.  We're rewarding you for coming and pulling the lever", and everyone who's against gambling is like, "I don't know about that, I'm not going to go in there".  And then everyone who does it, walks into the casino and comes out with bags of cash and like, "They're being honest, bro', it's true, they're giving you money.  Put $100,000 in, you get like $400,000 back", and that's a different kind of degeneracy. 

Maybe it's like the politicians rewarding us for allowing them to steal, I don't know, but it's a different kind of degeneracy, and it's a kind of degeneracy that scares me.

Peter McCormack: Where's HODL?

Junseth: Yeah.

Peter McCormack: He would say that's the nihilism of our time, right?

American HODL: Yeah.

Junseth: Nihilism's rewarded in some ways.

Peter McCormack: Who has a question here for Junseth?

Danny Knowles: Come on up to the mic.

Audience member 3: Hey, guys, quick question.  Since you're a Bitcoin OG and all of us in the room like Bitcoin, maybe other stuff, I'd be really curious to hear what is your biggest argument against Bitcoin?  You already kind of alluded to it, but not as like what is its fatal point, but if it would fail, what's the worst thing about it?  I think, for people that are passionate about something, it's also good to think of what is the thing against it and talk about that; I'd love to hear from you as someone originally in this?

Junseth: So, I'm not a libertarian in any way, and I talk to libertarians all the time and they like to tell me about hard money and say stupid, Tropeic words that they learned from Mises.  The libertarians are funny because they've been poor their whole lives and then they put a bet on Bitcoin and then some of them got very rich and they go, like, "See, I told you", and you're like, "You've been poor for like 80 years, asshole!"  So, I do wonder, there's a lot of thought in the world about the idea of a deflationary currency not being great for an economy, and I wonder what a world looks like with a deflationary money, and if deflationary money is in fact what we need. 

Bitcoin is money, I don't think there's a doubt about it, but it's a difficult world to think of where you have this inability to pull forward time preference, and how do you take loans out in deflationary currency, especially when it deflates this much; how do you take loans out?  You have a kid, you have to send them to school, how do you pull forward your inability to pay for school without taking out a loan; you can't, so how do you do that in a Bitcoin world?  So, you have people that just don't go to school because their parents can never afford it; what do you do?  You can't buy a house, we just all live under bridges, or do houses collapse and now they're $4?  I don't know, but I feel that loans are an important part of an economy, and I struggle to understand how we do it.

Maybe Bitcoin is money, and maybe what we find out is that debt money, which we've always called fiat money, is also money and that they're just opposite sides of the same coin and the government will issue fiat so that they can pull forward preference, and maybe that's what we use to issue loans, I don't know.  But I do wonder about the possibility that maybe you can't run a world on deflationary money; that one weirds me out regularly.

We all, I think, can acknowledge, when you think about time preference and spending habits, it's very difficult to conceive of a world where money is flowing freely and we're all buying good things and bad things all the time with this thing that we know is going to be more valuable tomorrow.

Peter McCormack: Do you think Bitcoin might just be this thing that sits on the sidelines like it has been now, it's just an asset people might buy and sell and never really fulfils the full utopian dream but never really goes away?

Junseth: Yeah, I think it could be that, I think that's possible.  I don't have a utopian vision, I really am like a watcher, I'm sitting on the sidelines and watching it.  Do I think Bitcoin will eat the world?  It could, I don't know, it has potential, it's certainly capable of it.  Do I think that's a good thing?  I don't know, I don't know what a Bitcoin world looks like.  I know that it doesn't look like what Saifedean thinks it looks like, but it looks like something; is it good?  Maybe.  Is it going to stop wars?  Probably not; libertarians, shut up, it's not, people fight.  Is it going to defund governments?  Maybe.  The question that we talked about me coming to answer was what Bitcoin does for democracy --

Peter McCormack: Yeah, this was a setup!

Junseth: Yeah, that's a question.  Does it give sovereignty back to the individual; what democracy are we talking about, like shitty UK democracy or real American -- American democracy's a very different thing because the country that we are in was set up on behalf of the sovereignty of the individual; we want to be sovereign.  We were out in the woods; we were killing bars and shooting ducks and feeding our families.

If you read Gordon Wood, he talks a lot about the American democracy and the American experiment, and it's important because the American revolution's different than all other revolutions.  What we said is, we looked at King George and we were like, "He's oppressing us".  Meanwhile, we were the freest people in all of the world, maybe more than the UK, because he wasn't here, there was no one watching us; we just had to pay taxes.  But philosophically, we were so opposed to the notion of being controlled that we revolted and said, "Even that much touching of us is too much.  We want utter freedom because that's what we built.  We left you, we came here for freedom, we got our guns, that's what we want.  We don't want anything to do with you; philosophically, we're opposed to that".

So, American democracy was rooted in this notion of utter impure sovereignty, so maybe does Bitcoin give that to the world?  Maybe, maybe it does; maybe that is a completion of the American experiment; maybe it defunds governments; maybe it brings us back; maybe this is like the end of the American revolution and the whole world gets to be America, I don't know; maybe this adds to our understanding of freedom, this notion that in America, we've codified the things that you're free to do, we've codified the idea that there's like this God-given right; well, there's a God-given right to freedom of speech, there's a God-given right to protect yourself.  These are things that, in a state of nature, you have the right and ability to do no matter what, no one can stop you from doing them, and we never ever had that with money. 

Bitcoin, for the first time, gives you the sovereign and particular right to your finances to spend, to trade, and that's something we didn't know that the government couldn't take away from you.  Bitcoin is the manifestation of the God-given right to have your value.

Peter McCormack: Who's up?  There's 50 of you in here.

Audience member 4: Gary Gensler, thank you! 

Junseth: That was a good joke.

Peter McCormack: Yeah.

Junseth: For anyone off camera, that wasn't actually Gary, I know that you're wondering.

Peter McCormack: Kind of a looks a little bit like him.  But that self-sovereign point, it's kind of an interesting point for me as a British person coming across to America.

Junseth: I'm so sorry, man.

Peter McCormack: It's okay, we forgive you.  But you have two forms of democracy whereas we don't; you have a vote, you have a ballot vote and, like Balaji says, you have the ability to vote with your feet.  So, even if you're unhappy with the vote in your state, you can move from state to state.

Junseth: Yeah.

Peter McCormack: So, for me, as somebody from the UK, it's like we only have one form of democracy, it's pretty shitty, and Bitcoin opens up this whole new world where you can rethink and you can leave a country with your money intact.  There's the big story in the Ukraine war, somebody left the war with their money on their hard drive.  Do you think this opens up, therefore, opportunities throughout the world, like this is going to ultimately deliver more forms of democracy in countries where -- we know that half the population of the world lives under authoritarianism, do you think this could open that up?

Junseth: Bitcoin allows for the undermining of regime in certain ways. Think about it this way, let's say Bitcoin's a sideline clown show, right, it just sits there, it doesn't really reach the size that we all think it can, whatever, that doesn't matter; let's say Bitcoin's $1 and the blockchain is still chugging along and you're still able to get as much of it as you can, if you have wealth in Ukraine, you can still put it into Bitcoin, and on the other side, sell that Bitcoin and have the same amount of wealth wherever you want. 

So, it is a teleporting transport mechanism for value, which by the way makes it useful, which means that it won't be $1, but that is a use case for it.  So, you can do this with Bitcoin and that to me is extremely remarkable and it empowers people to undermine bad regimes when they get bad enough.  I don't think we've seen this yet, I don't know if we'll ever see it, but it's kind of like the American affinity for guns; we have guns just in case, and the result is that the government doesn't do things just in case we use our guns.

Peter McCormack: I just, as an observer, fundamentally disagree with that.

Junseth: Yeah, because you don't know anything about guns because you're a UK guy.

Peter McCormack: No, I do, I just think you've had plenty of opportunities to use your guns to oppose the government, it's not happened --

Junseth: We're never going to do it until it gets too bad, that's the point, it's like the government can push as far as they want, and there is this mechanism that's an elastic mechanism that snaps at some point and brings us right back.  So, the American sensibility is pretty simple, you can take it as far as you want, keep going, keep going, but there's a point where it's going to get snapped back because it's just too far; I don't know what that point is.

Peter McCormack: But we have that in every country, we have that in the UK and we don't have guns. 

Junseth: You can believe you have that in the UK, I don't believe you do.

Peter McCormack: No, but we do, you have it in every country, you can have a revolution without guns.

Junseth: You can certainly have a revolution without guns.

Peter McCormack: Yeah.

Junseth: But America's very different in that --

Peter McCormack: I think it's a story some Americans tells themselves to justify --

Junseth: I think that foreigners like to think that.  I don't think you can own Bitcoin without guns to be honest.

Peter McCormack: No, I do, as an observer coming across, I think it's a story some Americans tell themselves to justify endless gun massacres.

Junseth: Yeah, well, I don't want to get into a huge gun debate because you'll lose, but I think that that's --

Audience member 5: Because you've got the guns.

Junseth: We got the guns.

Peter McCormack: We're in the New York, nobody's got a gun.

Junseth: No one's got a gun in New York.  I don't have a gun on me in case there are any feds here.  No, but I do think that that is, at least for me, I don't remember exactly what we were saying, but the sovereignty really matters, Bitcoin is sovereign money in that way, like you get to have sovereignty over your finances, and I think that's something that we've never had; particularly in the digital world, we've always had to allow someone else to house our money, hold it and make it easier for us. 

Holding your own money, as bitcoiners know, is the hardest thing in the world.  Contained value wants to explode, it wants to get stolen and it wants to get hacked, it wants you to make a mistake and lose it, and it is the hardest thing in the world.  It's a responsibility that frankly makes me understand how we constructed the financial system the way we did.  It actually leaves me in awe at the fact that we take our money, we take our contained value, we take millions, and sometimes billions of dollars, and we put them in these buildings and we let those people have that money, holding it for us, and they don't lose it; that blows my mind.

Peter McCormack: Right, any more questions?  Come round anyway.

Audience member 6: I wonder what your thoughts are.  So, as a bitcoiner, I followed the hodl pathway, so I believe that my time horizons have shifted to the long-time long horizon, far out horizon.  Four trips to El Salvador have shown me something that's very important about Bitcoin as they get to the next stage, and that is spending Bitcoin, spending satoshis and spending them for just about everything you do has a dramatic effect on circular economies.

I'm trying to figure it out myself, but if you think of a supply chain as a linear process where somebody grows a crop, coffee let's say, puts it into the combine, it gets distributed around the world, supply chains have gotten very efficient, much as social media's gotten very efficient around communications between people, and the sacrifice we make is we give up our privacy.

Junseth: Of course.

Audience member 6: We do social media for convenience and we pass our valuable data over to --

Junseth: Whomever wants it; we don't usually care, China or whoever else wants it, yeah.

Audience member 6: Exactly.  But in a circular economy, it's much different, because instead of the end result being a shareholder that gets a payout from Starbucks, let's say, for the profits of Starbucks making that supply chain efficient, in a circular economy, and this happens now regularly in El Salvador, and the effects are pretty dramatic in terms of a rising economy and a much more positive attitude by the people that are in that economy about the future, they can educate their kids now, they can do things, so I'm just wondering what your thoughts are on this spend Bitcoin versus hold Bitcoin forever.

Peter McCormack: That's the longest question ever!

Audience member 6: I know. 

Junseth: Well, like I said, this is the deflationary problem.  It's hard to imagine, to conceive of a world where I want to underload my Bitcoin because it's going to be worth more tomorrow than today.  Meanwhile -- Oh no!  You nearly killed us!

Peter McCormack: Good catch.

Junseth: That was a good catch, well done. 

Peter McCormack: Get that man a beer.

Junseth: I hate to give him credit, but Roger Ver said, I think in 2014, right before Vitalik went up and pitched us Ethereum, he was talking about, at the 2014 TNABC, the North American Bitcoin Conference, he says, "If you want to spend Bitcoin, spend it and then just buy back what you would have in Bitcoin immediately", and I always thought that was an interesting piece of advice because it was one of those things that kicked me in the nuts.  I was like, "How come I've never thought of that?  How stupid that if I'm going to spend and I want to have my Bitcoin, I can just take the money that I would have spent on the hotdog if the hotdog is for Bitcoin, and immediately buy the Bitcoin back and be no worse for wear". 

That removes that problem of the timing, but there are a lot of things I think right now that make it really difficult to spend, the tax treatment in America of Bitcoin, all sort of other things.  What we need for Bitcoin to do is we need Bitcoin to disrupt in a way that causes governments to deal with the consequences of doing things like spending.  And for me, until that stuff's worked out, until we have maybe more privacy, maybe via Lightning Network or something like confidential transactions, a lot of that stuff, until that stuff is kind of worked out, I think the best move for me is to just hold and wait until those things are worked out.  I know that these things are coming, and that's the alpha that I have in Bitcoin.

I think a lot of people find it hard to hold.  There are a lot of things about Bitcoin that are hard, and that's why, for me, I think the compensation of holding Bitcoin is in waiting for those things to get worked out and knowing that most of the public doesn't even know those questions exist, and that to me, where's the value in Bitcoin?  The value in Bitcoin is as those things get worked out, Bitcoin is better and better money.  So, hodl, spend, do what your heart tells you I guess, but for me, until Bitcoin is kind of like cooked and finished, I'm holding.

Peter McCormack: I think you need to do both because we need to support Bitcoin companies as well, so you have to spend a little.

Junseth: I don't think that Bitcoin companies are companies that accept Bitcoin.

Peter McCormack: No, you know what I mean though, it helps support things.  Like this Pubkey is supported by bitcoiners coming down here and spending it.

Junseth: 100%, I think this is great.

Peter McCormack: Yeah.

Junseth: Bitcoiners come down here, but what do you spend at the bar?  I gave my credit card!

Peter McCormack: Yeah, but I know some people do, like at the football club, we have a number of transactions --

Junseth: I think it's great, I think someone said this recently about one Bitcoin business, and the Bitcoin business does a business where they allow you to bid on NFTs and such, and they only accept Bitcoin.  Well, that's stupid, you should accept whatever form of money someone wants to pay you.

Peter McCormack: Yeah.

Junseth: Unless you don't believe in Bitcoin or something, then don't take it, whatever.

Peter McCormack: But it's useful to have companies like OpenNode and IBEX.

Junseth: Absolutely.

Peter McCormack: We need transaction processes to keep that going.

Junseth: There are companies that require that you pay in Bitcoin, Lightning is a good example, you want to do things, you want to create this economy where you want to open up a channel, whatever, you need to pay them in some kind of medium.  Well, this is going to be a Bitcoin channel; Bitcoin channels, what you're putting at risk is Bitcoin, that's what you're putting in there.  It's sort of like yield.

So, there's this idea that those types of companies can exist, but I think a majority of Bitcoin companies should support the infrastructure of Bitcoin.  And I talked about it earlier, insurance, I think insurance in Bitcoin is an important thing, but that's a capital market, it's not trading in Bitcoin, it's trading in dollars.  I think maybe the biggest Bitcoin company in the world is the oil markets.  I think the energy markets are in fiat, and there are a lot of ways in which Bitcoin can touch that.

Bitcoiners are eating up energy in all sorts of places, wherever there are subsidised energies, there too also is a Bitcoin miner.  The energy companies, maybe someday they'll accept Bitcoin for payment, but the reality is what they're doing is they're accepting fiat right now.  So, the Bitcoin company, the mining company, is paying the energy company; well, I think that makes the energy company a Bitcoin company.

I think all of these markets all over the world, there are ways in which Bitcoin is going to start touching them and making those companies very wealthy, and they're going to be wealthy in fiat, and Bitcoin's the reason for their wealth.  So, those are Bitcoin companies and that, to me, the idea of like a circular economy that's all Bitcoin, that's a dream that's far off, I'm excited about that world where maybe Bitcoin's a little bit more stable, maybe tomorrow it's not going to be worth 300% more than it is today, but the world in which the circular economy is Bitcoin is far off; right now, I think we have to accept that Bitcoin companies are fiat companies, and wherever Bitcoin touches fiat companies, we are bitcoiners, we're joining the world.

Audience member 7: Let's fucking go!

Junseth: Thank you.

Audience member 8: Are you familiar with Mark Moss's Three Revolutionary Cycle theory?  I know you are because it's been on your show.

Junseth: Not supremely.

Audience member 8: Just like the political, financial, technological revolution all converging at the same time, right now.

Junseth: Never heard of it, but that sounds pretty good.

Audience member 8: Well, in short basically, every 250 years or so, a political revolution happens, a financial revolution happens around every 80 years, and a technological revolution happens around every 50 years, give or take a few years, and for the first time since I think the Industrial Revolution, they're converging now.  So, I wanted to know your thoughts on Bitcoin being like the catalyst of these three revolutionary cycles converging where we're going from a peak centralisation he says, it's like a pendulum and we're swinging back to decentralisation.  Obviously, the financial part speaks for itself with Bitcoin, and the technological part speaks for itself, so it has like a little piece of all three, and I wanted to know your thoughts on that.

Junseth: I nearly always reject anything that talks about cycles, and I don't believe in cycles, I don't believe in them at all because it's like astrology.  So, I think those are types of revolutions that can happen; technological revolution has been happening, I think it's a continual process.  Apple starts in, what, the late 1970s, early 1980s and grows to where it is today; I think the personal computer's a technological revolution. 

All of this stuff, like computers generally, I don't know where you would pinpoint the revolution for any of these things happening.  The Industrial Revolution starts in Pawtucket, Rhode Island, it's these little mills that have leather bands between things and are using water basically to run these looms and such.  I don't think you can point to a moment where that is a revolution, it's a revolution for 100 years.

Audience member 8: Right.  Can I just add? 

Junseth: Yeah.

Audience member: So, the technological revolution part is, he uses the iPod as a good example, like it's a great technology but it's not a technological revolution.  So, a technological revolution is something that changes the course of humanity and it drives financial markets.  So, 60 years ago, we had the microprocessor which led to computers.  60 years before that, we had I think it was the steel and engines or oil, something like that.  60 years before that, electricity.  So, it's not just a new technology, it's something that changes the course of humanity and leads financial markets.

Junseth: But there are all sorts of these, like you have the air conditioner, the invention of the air conditioner's one of the greatest moments in human history; for the first time, you have the entirety of Latin America and South America opened up to business, there are all sorts of these moments.

If you look at GDP over history from like year zero to now, it's not like we have a lot a great data from year zero, but you can kind of chart it out, and then you hit the Industrial Revolution and it's a parabular, that's how it is.  To me, everything is much more gradual, I don't believe in these moments of revolution where you can say, "This is the invention", like the combustion engine, the train, all of these things come at moments where there are sort of these conglomerations of inventions that exist and are out there; someone at some point would have invented the train, whether it was the original inventor or it happened a little bit later.  But these things are all on the table, and they're on the table because of this gradual move towards progression, towards progress.

When you look at the chart of something like GDP, there are not moments where it just pops way up, what you see is it's just gradual, year after year, it's gradual no matter what's invented.  There's no moment where you can circle and go, "There's the revolution, this is the year where everything changed".  It's literally the most gradual chart you've ever seen, and then it is up and straight up, but it's up and straight because it's a parabular; that's how progress always works. 

I say the same thing with Bitcoin, Bitcoin is a new invention, I think it's revolutionary, I think it's incredible, but you see the adoption, what's happening in the wake of Bitcoin coming up, there's scam after scam after scam that completely mute the effect of Bitcoin and what it could be doing for humanity; it's stealing money from people, all of these scams that people are leveraging their money into or taking money from people. 

That's the result of this revolutionary technology, Bitcoin exists, these scams persist, they're going to persist for a long time, people will take money.  Bitcoin is going to advance the world at a slightly higher rate than it was before, and it's going to be amazing for all of us.  Think about like a 2% change, that means the world's GDP, the things that we would have done double.  Instead of 72 years from now, or whatever it would be, a doubling of what we have today just because Bitcoin improves things 2% worldwide, is going to happen over the course of the next, what, 36 years; if it's 4%, it's even better.

So, these nominal changes in history, they increase the parabolic effect of any moment of the future.  We get a future that looks very different much faster, but I don't think that you can point to a point in history easily and say, "This is the invention that changed the world".

Peter McCormack: All right.  So, there's a crypto meetup down in the bar, I think we should go and fight them.

Danny Knowles: Before we close out though, let's give a massive shoutout to Pubkey.

Peter McCormack: Yes, thank you, and Thomas.

Danny Knowles: They've let us record at their spot all week, and I think if you live in the city, make sure you get down here and support these guys.

Peter McCormack: Yeah.  So, a big thanks to Junseth.  If he offended, well, if he didn't offend you, I don't know who you are, but if he's offended you, then that's just Junseth.  Thank you all for coming in; thank you to my friend, Rich Roll, for coming in; thank you to Luke for coming in; thank you to everyone in coming.  Thank you to Jeremy for doing all the camera work all week.  Thank you all for coming.  This is the first one of these; we've learnt a lot in a very short amount of time.  If you've got any feedback, good or bad, just drop me an email, you know I'll reply.  Let's go and get a drink.