00:00hi everyone welcome to the ACNC podcast
00:02this is Thor Nolan I'm here today with
00:04nathaniel popper New York Times
00:05journalist and the author of the book
00:08just out today digital gold Bitcoin and
00:11the inside story of the misfits and
00:12millionaires trying to reinvent money
00:15welcome to Daniel thank you for having
00:18so I just wanted to kick off with an
00:19article you wrote in the New York Times
00:21recently about what you describe as an
00:23experiment with Bitcoin happening
00:25playing out in Argentina where people
00:28are trading pesos for a Bitcoin and
00:30vice-versa instead of actually into
00:32other currencies could you talk a little
00:34bit about why you think that phenomenon
00:36is happening I mean one of the things
00:40you comment on is that it's the only
00:41place where ordinary people that you you
00:43think it's the only place where ordinary
00:44people are using Bitcoin for real
00:46commercial transactions yeah I mean I in
00:50the course of writing this book I
00:51traveled to most of the places where
00:54Bitcoin has caught on in any significant
00:58way and I was always on the lookout for
01:02people actually using Bitcoin you know
01:05people who weren't just speculating on
01:07the price of Bitcoin or working on it
01:11for sort of political or technological
01:15reasons I wanted to see people using it
01:18in some ordinary way and in Argentina as
01:21I mentioned as you mentioned it is
01:22really the one place where I saw that
01:25happening where I saw ordinary people
01:28who didn't have any political
01:29motivations didn't really understand the
01:31technology using Bitcoin because it
01:34allowed them to do something they
01:35couldn't do with their ordinary currency
01:38they couldn't do in the ordinary
01:39financial system and so to me it was
01:43really the the most interesting
01:47experiment for Bitcoin and the most
01:49interesting place to look at understand
01:51how it might be used if this did catch
01:55on more and I think the the Argentinian
02:00experience is clearly a little unusual
02:03and so it would be easy to say that you
02:07know Bitcoin is catching on there
02:09because it's just a totally screwed up
02:13the totally screwed-up currency it is a
02:15you know a largely a totally screwed up
02:18country you know it's had hyperinflation
02:21multiple incidents of hyperinflation
02:23they've defaulted on their debt all of
02:26this and so that that that is certainly
02:30why it's being used there but I think
02:32that despite all the unusual elements of
02:36what's going on in Argentina when you
02:40look at it there are a lot of lessons to
02:43be drawn for how it might be used
02:45elsewhere once once the technology once
02:49the protocol wants to code once the
02:51infrastructure is improved it will it
02:54will be able to compete in other places
02:57in similar ways and so Argentina was
03:00just fascinating and and the the center
03:03of that story for me in Argentina were
03:06the sort of working-class it coined
03:10money changers who make the whole thing
03:13work down there I mean a lot of people
03:15use Bitcoin to get money in and out of
03:17the country but when they need to get
03:20their money into pesos so they can buy
03:23something they can go to the grocery
03:24store they rely on on this this this
03:28money changer who frequently will come
03:30to their house to their work and give
03:33them pesos or give them dollars and just
03:35fascinating characters and they they
03:38sort of they they give a window on the
03:41most basic level and just how Bitcoin
03:44works and that was that was at the
03:46bottom of it that's what I was
03:48interested in this book and why I was
03:49interested in Argentina so I mean I know
03:51speaking of Argentina though there are
03:53plenty of places in the world that have
03:55hyperinflation what about the
03:58environment they're made Bitcoin take
03:59off I mean there could have been other
04:00alternatives I mean it's not like it's
04:02the only option it's not the only option
04:05and in fact people have lots of other
04:08ways of getting around the local
04:12currency and getting around the local
04:13financial system and frankly the most
04:16popular way to get around the peso is
04:20the dollar so there are already there's
04:23already a whole infrastructure and world
04:27Argentina who are changing between
04:29dollars and pesos that's that is
04:34something that sort of set the stage for
04:36Bitcoin I think that what Argentina has
04:40that a lot of other places don't have
04:42with dysfunctional economies is a very
04:45well educated literate tech-savvy
04:50population that that knew how to embrace
04:55this technology and that had the skills
04:57to do that and a comfort with the idea
05:01of a digital currency I don't know that
05:03that's the same conditions exist in a
05:05place like Venezuela or Zimbabwe
05:08so Argentina is somewhat unusual in that
05:12right well interestingly enough when sis
05:14kazar is who you talk about in the book
05:15and in the article is from Argentina and
05:19I know that inspired his interest in
05:21Bitcoin but he wrote an interesting post
05:22recently on LinkedIn about why Greece
05:26should not switch to Bitcoin and he
05:27actually it was really funny he actually
05:29said but if the euro is the problem
05:30switching to Bitcoin would be like
05:31trying to cure a headache with a bullet
05:33to the brain which I thought is really
05:35funny turn of phrase but why why would
05:38he make that argument at the same time
05:40so in one hand you see this phenomenon
05:41in Argentina and on the other hand
05:43you're hearing you know folks say that
05:45what country should not think of it as
05:47you know as a replacement for their
05:49currency or augmented currency I mean I
05:53think I think it's similar to the
05:56argument that the Internet in 1995 was
06:02not equipped to handle Facebook or
06:06Netflix you just you just didn't have
06:09the bandwidth at that point I mean the
06:11basics of the the technology of the
06:15internet existed in 1995 but you need a
06:19lot of stuff to go into it and to to to
06:24sort of create a foundation for it to
06:27allow to allow more significant things
06:29to be built on top of it and I think
06:31it's pretty clear that at this point
06:33bitcoin is not ready for primetime in
06:37that way there are there are sort of
06:41with the with the protocol with the
06:45number of transactions that can go
06:46through the system and significant
06:49improvements that need to be made before
06:51it can become that sort of work at a
06:54thing for larger economies and I think
06:59that when says it's interesting to hear
07:02him say that but I think it's widely
07:05understood among a lot of the people
07:08working on this that this there's still
07:11a lot of work that needs to be done and
07:13and sometimes there's a desire to see a
07:17technology like this you know embraced
07:20immediately people want this to become
07:22the global reserve currency next year
07:25and I think the people who are kind of
07:28really in the trenches working on this
07:30recognize that this sort of thing takes
07:325-10 years and once this often would say
07:36that to me when I was talking to him in
07:37the course of reporting on this book
07:39that you know if it takes 10 years if it
07:42takes 20 years that's that doesn't
07:44matter to me I just you know the
07:47important thing is that this eventually
07:48catches on and so sometimes people do
07:51become a little too focused on the very
07:54near-term right well may I take another
07:56theme there too is then you mentioned
07:57the analogy to the internet in the early
07:59days there's a similarity in the sense
08:01that the internet belonged to everybody
08:03and it was borderless and not tied to
08:05any one country in that vein one
08:08interesting theme that comes up in their
08:09Argentina story that you tell to is this
08:12tension between decentralized and
08:13centralized players and how a lot of
08:15people don't trust centralized players
08:16like banks but yet so many aspects of
08:20the Bitcoin ecosystem are in fact
08:21centralized I mean there are some choke
08:23points in there for better or worse do
08:25you have any thoughts on how that plays
08:26out well I think it's certainly one of
08:31the constant tensions in my book as I
08:35tell the history of Bitcoin and and
08:40because in reality many of the crises
08:44that have hit Bitcoin have been as a
08:47result of people trusting their bitcoins
08:51with some central institution that
08:54was essentially allowed to hold their
08:57money in the same way that a bank does
08:59but without any insurance and I think
09:01obviously the most notable case of this
09:04was mount docks which essentially held
09:08everyone's bitcoins and eventually lost
09:13or stole all of those bitcoins
09:16the jury's still out on exactly what
09:18happened there but that that has been an
09:22issue that people don't don't actually
09:27seem to trust themselves to use truly
09:30decentralized technology or perhaps they
09:33don't have the abilities to do so and so
09:36you know I think a lot of the focus and
09:39the in the developer community now is on
09:42on building programs that can allow
09:46people to get the advantages of the
09:49decentralized technology without having
09:51to deal with all the complications of it
09:53but I think that's a real issue and I
09:58mean I think it's always at the center
10:00of these debates about the internet and
10:03obviously we now have this with Google
10:04and Yahoo we have a decentralized
10:06Internet yes but you do have these
10:09companies that are essentially serving
10:11as the middlemen and that have the
10:14ability to track all your emails to give
10:17emails up that when they're subpoenaed
10:19and you know to a degree that does seem
10:23to defeat some of the original idealism
10:26of the project but you obviously have
10:28managed to maintain a lot of the
10:30benefits well I think it's interesting
10:31because one analogy that I've seen you
10:33use and I feel like I'm a collector of
10:35Bitcoin analogies I've heard settlement
10:36Network lots of different analogies and
10:39I think it's probably a better analogy
10:41than most is the financial version of
10:43email so I think in that sense I think
10:44that's probably one of the better
10:46analogies ever used and that you came up
10:48with so maybe email is a better video
10:51maybe email is a better way of thinking
10:53of it than even saying internet because
10:55everyone uses email it bypasses you know
10:57there are central services but it
10:59bypasses sort of a single central player
11:01I don't know what else about email why
11:04would you say what else would you say it
11:05makes it the financial version of email
11:07well it's just it's it's a way to send
11:10wings that you have control over often
11:12oftentimes people get get focused on the
11:16idea of Bitcoin as a currency because
11:19that's the easiest thing to grasp
11:23everybody understands money everybody
11:25understands gold and that's true even in
11:28the title of my book digital gold but
11:30it's it's more than just a thing it's
11:33more than just a token it's a way to
11:35move things and so I think email conveys
11:39that that you're moving something but
11:42the email itself is a thing that's
11:44valuable as well and so that to me is
11:48why that that metaphor makes sense and
11:52obviously it's something that everybody
11:54understands and can use and and really
11:57it is just a way to move money as
12:01quickly as email moves information and
12:04of course both of them are built on top
12:06of the internet and rely on that that
12:09foundation but do something new on top
12:13of that I think I totally agree with
12:15that and it's frictionless and cheap I
12:16mean the one of the analogies anecdotes
12:18that really stuck out in your article in
12:20the New York Times recently was about an
12:23artist who if you had used if he had
12:25someone had sent him euros to Argentina
12:27he would have lost 30 percent of his
12:29profits which is just insane and and he
12:33ended up using Bitcoin for that reason
12:35which i think is another example of the
12:37cost of that because the fact that it's
12:39so expensive to move things is is huge
12:42yes and the costs are much greater in
12:47Argentina 30 to 40 percent cost in the
12:50u.s. it's pretty expensive as well but
12:53it's not necessarily quite at the place
12:56where Bitcoin can easily compete or you
13:00know clearly beat the alternative but in
13:02in Argentina right now it can I think
13:04you know part of what's interesting
13:06about Argentina is that the what the
13:09work going on there it seems like it may
13:12end up improving the Bitcoin protocol
13:14Bitcoin software to the point where it
13:17can compete in places where
13:19you know the the margin is smaller do
13:22you think though the situation Argentina
13:24is a stopgap or do you would your sense
13:27from you know your observations there
13:28that it's actually going to be people
13:29are converted and they're going to
13:30continue doing this especially as the
13:33protocol and the technology evolves I
13:35mean I think I think the specific
13:37situation in Argentina is going to
13:39depend a lot actually on what the local
13:41government does the the the real problem
13:46with with transferring money
13:48internationally there is this artificial
13:52exchange rate that the government
13:54creates and that's where you lose most
13:57of your money when you bring when you
13:59bring currency into the country is the
14:02artificial exchange rate between dollars
14:04and pesos and so if the government does
14:07away with that if the government begins
14:09to deal with inflation then the
14:11advantages of Bitcoin or begins going to
14:13become a lot less significant now I
14:17think part of what's interesting that
14:19you're seeing in Argentina is that
14:21people are starting to use it for more
14:23than just the just the international
14:27transfers I mean that was the first big
14:29for the use case but as people are
14:32becoming familiar with it and more
14:35programmers are becoming aware of it
14:36they're seeing the other ways in which
14:38it might be used and one of the really
14:40interesting projects are going that's
14:42going on right now is actually being led
14:43by one sis's company Zappo they have
14:47teamed up with local social network
14:50called taringa which is you know this
14:53local sort of reddit Facebook site and
14:57they're they're using Bitcoin not as a
15:01way of transferring large amounts of
15:03money but actually as a way of allowing
15:05for really small payments on the social
15:08network and so you know micro payments
15:11is something you hear a lot about with
15:13with Bitcoin that it might make it
15:15easier to make micro payments then as
15:18possible with credit card networks and
15:21so the possibility for micro payments to
15:25take off perhaps you know if the
15:27government's policies change on exchange
15:29rates and nobody is using it any longer
15:31to bring money into the cut
15:33you know the the usership on taringa
15:36will take off so I think you know once
15:39people start thinking about Bitcoin they
15:41start thinking about the different ways
15:42in which it might be used and and
15:47yeah I'm not at all I wouldn't argue
15:50that Argentina is the future of Bitcoin
15:53or Argentina is paving the way for for
15:56Bitcoin you know broader adoption by
15:58ordinary people I just think it's a
16:01great experiment to watch because it's
16:03the place where people are trying that
16:05right now and maybe in two or three
16:07years if the policies change there's
16:09those sorts of experiments we'll go
16:10somewhere else I agree and I think it's
16:13interesting because the entire theme of
16:14what you've been talking about and in
16:15your book as well is about the role of
16:17people and the players behind this
16:18ecosystem and one debate that I've seen
16:21play out and that I myself have strong
16:22opinions about on both sides is whether
16:25the people really matter actually
16:27because um you know in the case of
16:30trying to figure out who Satoshi
16:31Nakamoto is for example do we really
16:33need to know in terms of what youth were
16:35actually getting out of it but yet in
16:36your book you paint a picture of a lot
16:39of different characters and interesting
16:40people involved with the evolution of
16:42Bitcoin clearly you would make the
16:45argument that people do matter in that
16:46context and so I'm kind of curious to
16:48hear why you you think that's the case
16:50well I think you know at the simplest
16:54level Bitcoin is not a thing that exists
17:00unto itself Bitcoin and one of the most
17:04fascinating elements of Bitcoin the
17:06Bitcoin protocol is that it's a kind of
17:09blank slate that people can write their
17:12their needs on to and their interests on
17:16to and that's that's really what I saw
17:19in the course of reporting out this book
17:21is that everywhere it went Bitcoin was
17:24used in a slightly different way and so
17:28what Satoshi had in mind for Bitcoin you
17:33know he talked about something that
17:35could a kind of money that could exist
17:37without central bank's that's that's
17:39frankly not the way it's being used
17:42right now it's being used in all these
17:44other ways I mean he did talk about
17:46micropayment so there that was there at
17:50the beginning but but to understand the
17:53technology you have to understand the
17:54way that people are using it to
17:56understand it in the abstract is
17:59somewhat useless if you just describe
18:01Bitcoin this is what happened for the
18:04first two years somebody described it
18:06and everybody thought it was idiotic
18:08every nobody you know there was there
18:10was maybe a hundred two hundred people
18:12using it and everybody thought they were
18:14crazy so it wasn't it didn't exist unto
18:19itself it needed to get those people who
18:21were using it and those people who began
18:23using it weren't all using it in the
18:25same way each person sort of used it
18:28according to their ideas about in their
18:31needs and you know initially the the
18:36ability to buy drugs online the the the
18:41kind of political promise of Bitcoin was
18:43really important and that was driving
18:46the use of it and that drove because the
18:49way in which the software evolved
18:52because this is open-source software in
18:54it and it has become something different
18:56than what it was when it began and so
19:00you know all of this together it just
19:02tells you that that the technology is is
19:05I mean the code in itself it could could
19:10have just disappeared it was the people
19:12using it that that made it happen and
19:15that made it evolve in a different way
19:17that it has evolved the people are what
19:21made this matter the people are are what
19:25turned this into something that might
19:28influence the world the code in itself
19:31would have died a quiet death if it were
19:36not for all of the people in this book
19:39and that's something that's very useful
19:43for the people to think about who are
19:46who are using the technology and trying
19:47to improve it because you you have to
19:51think about where people are and what
19:54their needs are and and almost everybody
19:56who influenced the course of Bitcoin
20:00was somebody who looked a little bit
20:02more dispassionately at what the
20:05technology was and why people were
20:07interested in it and how they might use
20:10the technology to provide another
20:12service and you know Charlie Shrem is
20:16and was one interesting case of that he
20:19was a very you know for all of his his
20:23failings and foibles he was a very
20:25practical guy who saw that we're really
20:29hard to buy bitcoins at that point and
20:32he made that possible when sis is a
20:35later version of that and when sis as an
20:39entrepreneur is fascinating because he
20:42is so good at telling stories and I
20:44think that's a big part of the reason he
20:46has managed to influence Bitcoin the way
20:49that he has in the way and that he has
20:51managed to build the companies that he
20:53has because he can build stories and
20:56tell those stories and convince people
20:57that those stories matter and in doing
21:00that he's been one of the most
21:01successful evangelists for Bitcoin but
21:05in doing that he's also himself
21:07influenced the story of Bitcoin that's
21:10great well thank you Nathaniel and
21:11that's the Daniel popper from The New
21:14York Times and the author of digital
21:15gold thank you again
21:16Nathaniel it's great talking with you
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