 This is Mises Weekends with your host Jeff Deist. Ladies and gentlemen, welcome back to Mises Weekends. As promised, we are joined by Saifidine Ammus. He is, for our purposes, most importantly, author of the Bitcoin Standard, the Decentralized Alternative to Central Banking. He's also a professor of economics at the Lebanese American University in Beirut, Lebanon, which is where he makes his home, holds a PhD from Columbia. Today, he's visiting his wife's family in Canada, so we're pleased to have him on East Coast time. So, Saif, thanks. Great to finally sort of meet you. Thank you, Jeff. It's a huge honor and a pleasure to be on this show with you. I'm a huge fan of the Mises Institute, and I've spent the last 10 years scouring your website and reading everything you guys. Well, not everything. 10 years is not enough to read all the content you guys put out, but I've learned from the Mises Institute more than I've learned from any school in your university, and I will forever be grateful to you guys. Thank you. Oh, thank you. So, I got to tell you, you kind of came out of nowhere. At least from my perspective, this isn't a criticism. You were not a big name in Austrian or crypto circles prior to this book. No, absolutely not. I mean, I was doing my PhD at Columbia. It was as you can probably guess, it was like a mainstream economics program. I only started really learning about Austrian economics towards the end of my time there. And then when I finished having learned Austrian economics, I realized, you know, I need to get, I need to be productive. I need to get a real job. And so I chose to get a job being in a teaching position in Lebanon because I just, after, you know, having been in academia all my life and been at university and then my PhD program, I really wanted to just be productive because I understood, you know, there's no way to be happy and fulfilled in your life unless you're actually being of service to other people. And so I focused on a teaching career in Lebanon and I was learning Austrian economics mostly by just reading things online. I'm definitely one of the many Mises fans around the world. Well, first, I mean, right from the get-go, the Bitcoin standard, what I love about this is you're using that not as a dismissal of the old gold standard thinking but actually as an homage to it. A lot of crypto folks like to imagine we're in a totally new world and gold is cranky. We shouldn't talk about it. But I view the title as your nod to gold. Oh, absolutely. I mean, I think, you know, if you read the book, the first seven chapters of the book, you know, they barely even mentioned Bitcoin and it could be a book about the history of money. It could be a book that's written by a hard money gold advocate. And that's essentially where I was up until 2013-14. And, you know, for me, Bitcoin is just a continuation of the same sound money principles of gold. And that's the point that my book is trying to make. Well, you know, when we look back at Manger and when we look at Mises, you know, the word we hear over and over is emerging. Things emerge. So in that sense, this is emerging in the digital age. It would be odd if money didn't take on a digital element today. In other words, Bitcoin is almost to be expected or predictable in that sense. Yeah. I don't know how much that is colored by the hindsight bias. I mean, it's one of those things that once you understand it, you think, wow, this is so obvious that it should have been there. But, you know, for many years before that, only a few people had been trying to build something like this. You know, a very small community of cypherpunks on mailing lists. Very few people had really thought that something like that would be possible. You know, the precursors were things like e-gold. You know, the idea of having digital payments backed by physical gold that is stored somewhere. But the problem with that was the fact that, you know, needing to put the gold somewhere means that the government can come and shut it down in order to enforce their monopoly. And Bitcoin really can be best understood as a workaround around that. You know, this is really the main advantage that Bitcoin has that it's just built so that it doesn't have an address that the FBI can come and knock down and prevent it from continuing to operate. Well, we'll get to some of the questions about Bitcoin, some of the features about Bitcoin. I guess we should get started. You know, why don't you just give us your basic case for why Austrians should be interested in Bitcoin, why they should support it, promote it, and also the devil's advocate position that I'm sure you hear critiques of Bitcoin from gold bugs and from Austrians. Yeah. So, I mean, first of all, let me say that, you know, I heard about Bitcoin about maybe 2009, 2010 pretty early on and I was quite skeptical of it working out up until 2013-14 is when I started really thinking, okay, this thing is worth paying attention to. And so I completely sympathize and understand with Austrian economists who dismiss it. And, you know, if you study the history of money, you see that the history of money has been for the past thousands of years, lots of cranks coming up and saying, you know, we have this new thing that's better than gold and it always never works out, you know, John Maynard Keynes being only the latest in that long line of cranks. So I completely understand and sympathize with the skepticism of Austrian economists towards Bitcoin. And I think it's a healthy thing to have. But, you know, after a while, it's worth paying attention to it. And I think the reason, you know, the reason that Austrian economists, I think, should really pay attention to it is that the, you know, the main criticism they might get or some of the main criticisms that, well, it's not physical. It doesn't exist and you don't hold it there. But, you know, just because something is not physical doesn't mean it can't have value. Value as Austrian should know, you know, it's a subjective thing. It exists only in our mind. So a lot of things that are not physical have value. You know, the data on your computer has value. If I, you know, if I took your laptop and told you I'll return it to you in the same exact physical condition, but I'm just going to press a few keys that will remove some non-physical things from it, that would, you know, you'd probably pay me money for me to not do that. You know, it's worth something. The data, your pictures, you know, your reputation, your business brand name, all of these things are not physical things, but they're worth, they are valued. And, you know, that's a perfectly normal thing. So just because it's not physical doesn't mean it doesn't have value. And the second point, and I think the most important one, is that it won this valuation on the free market. It won this valuation not through the point of a gun. Nobody forced anybody to say, you know, this has to be valued at that. This is why it can't be fiat money. It's not fiat because, you know, fiat means somebody's decision, somebody's order. Somebody put a gun to somebody's head and told him, you have to accept this at that value. But Bitcoin is not like that. It's the most astonishing thing about Bitcoin is that it got this value out of nowhere. You know, it isn't backed by anything. It isn't redeemable by anything. And yet people pay money for it. And people have exchanged it for billions and billions of dollars over the last nine or almost 10 years over time. So that's a market value that has emerged on its own. And, you know, if you read from Australian economists, from Manger to Mises to Rothbard to Salerno, you know, Salerno's recent book, Money, Sound and Unsound, I quote it in my book and you can find many quotes. You know, all of them, they understand that gold is money. But, you know, it's not this crude fetishism of gold of, you know, because it's yellow and shiny or because it has to be gold, that it has to be money. It's an understanding of the fact that if left to the free market, gold emerges as money. Gold is valued and chosen as a store of value because, you know, the physical properties that it has help it to gain that. But the reason that it is money is not any one particular physical property. It's the fact that that is what emerges out of people's decisions. And so, you know, the Austrians understand that gold should be money, but fundamentally they're not wedded to the idea of gold or silver as money. They're wedded to the idea of additional sound money. It's money whose value and acceptability is emergent on the market. People accept it at the value that they choose, not a value imposed by third parties. So, for me, this is really why Bitcoin matters because it fulfills these criteria for being sound money. It is hard money in that supply can't be increased and that's, I think, the most interesting aspect of it. And it's even harder than gold in that regard because gold, you can always dig deeper and find more. But Bitcoin, you'll never get more than 21 million. And this hardness, just like in the case of gold, is what gives it that ability to play the role of money. And so, this is why I think it's very interesting and worth looking at. Where it has an advantage over gold is really, and that's the reason why Bitcoin was invented. And if we were still on a gold standard, 100% certain we would not have had Bitcoin invented. There would be no motivation for it. The difference that it has between gold, it's not in, obviously, the physical characteristics of gold are maybe an advantage that it can be held or so on. But the other advantage that it's not physical means that its clearance all over the world doesn't have to be centralized. It's far more decentralized as a settlement and clearance layer. And so, it being decentralized makes it much harder to confiscate, much harder to co-opt. If you think about how gold's monetary role was restricted, it happened through governments taking over central banks. And central banks, to a large extent, there was a real market demand for central banking with gold because moving physical gold around with every transaction is not very convenient. But using settlement of physical gold has enormous economies of scale when banks are able to settle payments with one another. So that led to the centralization of gold reserves around more and more centralized banks till we got to the point where, effectively, we only have one central bank in the world today, the US central bank, which holds an enormous amount of gold. Bitcoin, effectively, by making the final layer of settlement, the final layer of clearance of payments, much more decentralized and much cheaper than gold, will, instead of us having a few central banks at the top, Bitcoin would have hundreds or thousands or maybe tens of thousands of entities that can function as central banks, that can function as a final layer of settlement. And thus, it becomes a much more difficult entity for governments to control. So I think if you value sound money, if you value the ability of the market to, if you want the market, if you want money that emerges on the market, you should probably be interested in this. I'm not saying this is a pitch for people to invest in it. I don't particularly care if people invest or not. And I don't think, you know, Bitcoin, you know, I'm not trying to sell people on Bitcoin. I think if it's going to win, it's going to continue to succeed because of its economic properties and not because I'm going on TV and on the internet and telling people to buy it. So I think it's just the economic reality of it that will likely enforce itself if it is worthwhile or not. Should we care about the regression theorem or circularity when it comes to Bitcoin? Do you care about those things? Yes. I mean, I think, first of all, you know, there's always a problem with applying old theories to new things because, you know, this is a category that didn't exist before. But I think, you know, the value of the regression theorem is in illustrating how money emerges from a barter system without the need of governance. So the point of Mises' regression theorem was to, you know, stand as opposite to the state theory of money, which says government passes the law and then gold becomes money. So Mises showed how that doesn't need to happen because it can emerge naturally from barter. However, we don't really have a barter system today. So, you know, Bitcoin is not going to emerge out of barter or any new form of money. It's not going to emerge out of barter. It's going to emerge out of a system where we already have things that function as monetary assets. Having said that, I think Bitcoin still does conform to the regression theorem in that, you know, initially, these things were digital goods that were collectible, that people were collecting and mining. And people were, you know, people were paying each other for them or paying, expending resources on obtaining them. You know, you turn on your computer and on your computer for a couple of hours, which no matter how tiny the cost is still a cost in terms of your time at the computer's hardware. So people were expending resources on obtaining that thing, meaning that it obtained value initially. And then later on, it started being used as a medium of exchange. Later on, people started using it as a medium of exchange. So I think the regression theorem still applies to Bitcoin. You know, Hayek talked about degrees of moniness. Can we look at Bitcoin and say, look, what is money or whether Bitcoin's money? That's an empirical question. That's not for you or me to say. That's for the marketplace to say. That's not a theoretical economics question. That's a market question. Yes, I think this is an excellent point. I mean, the problem that a lot of economists fall into is that they think the market needs their permission to function in a certain way. And it's sad to see some tentatively pro-market, pro-market or pro-Australian economists make this mistake sometimes, which is that they'll come up with a theoretical objection for why Bitcoin can't function. And then somehow they expect all these millions of people around the world who are using it to just drop it or stop using it. But the reality is people in Venezuela are using it. People in the US are using it. People all over the world are using it to play the role of money in many different ways. And who am I to tell them they should or shouldn't? Yeah, well, I've noticed some of your tweets lately about Turkey, which is experiencing a currency crisis. It seems like Bitcoin is perhaps not early enough to save Venezuela. But how could you use Bitcoin today to ameliorate what's happening in Turkey? How could that work from a technical perspective? I mean, I think the simple answer is just for people to put some of their wealth in it. So if you bought $10 worth of Bitcoin in Venezuela three years ago, you're going to be in a much better financial situation today than if you hadn't. $10 back then would make a big difference. Having said that, we're seeing it spread in Venezuela. We see Bitcoin exchanges spread, and we see an entire black market economy being built around Bitcoin. And my opinion is that this is going to be similar to the black market economies in the Soviet Union or the ex socialist republics, where they were illegal markets, and yet at some point the black markets were the only markets that were left because the official markets were just supermarkets that had empty shelves and people who, as the old joke goes, people who pretended to work and employees who pretended to pay them. But at some point, everybody who pretended to work left their job went home and did actual work for others and traded real things with others. And I think more and more this is becoming the case in places like Venezuela, where the only people who are able to stay above destitution effectively are the people who are being able to use Bitcoin or to spread Bitcoin around. So I think we're going to see more and more of this. However, having said that, Bitcoin is still very, very nascent. We haven't built the user interface and the infrastructure that will allow people who are not very technically competent to get into this easily. But it's still early days. Yeah, well, there's a lot to worry about. I know you mentioned off-camera earlier that you have a little girl living in Lebanon, at least in the West, we get the sense that Lebanon is somewhat in the throes of some political upheavals. How does your personal life, your experiences affect how you see Bitcoin and the need for something outside of government hands when it comes to storing our wealth? I have to say Lebanon might be possibly a bad example for this because I think the Lebanese central bank might just be the best central bank in the world from an Austrian's perspective. I don't say this often in Lebanon because I don't want to be mistaken for a cheerleader for central banking. Lebanon still has the highest cover of gold behind its currency, of any currency in the world. And up until the 1970s, the currency was practically 91%, I think that was the highest cover of gold. So they were on the gold standard up until the 1970s. And not coincidentally, Lebanon was known as the Switzerland of the Middle East. It was the banking capital of the Middle East. It was an extremely prosperous country. And then, of course, during the war, they did have one episode of hyperinflation at some point in the 1980s. But then after the war, since 1990 onwards, they pegged the currency to the dollar, maintained large gold reserves, and they've been able to defend the peg for about 23 years, not 27 years, 25, something like that. They defended the peg quite successfully at one fixed price. And I think that's largely due to the fact that they have relatively very large gold reserves. So, you know, in that regard, in terms of the currency in Lebanon, so far they've been doing okay, although lately things are getting worse and worse because the government is abusing that stability of the central bank and the banking system. Oh, another thing, the banks in Lebanon have a very high reserve ratio. So the required reserve ratio is 30%, but the actual reserve ratio is about 60%, 70%. So there's very little fractional reserve banking as well, and the currency is about 50% backed by gold. So that provides some kind of financial stability, but of course the problem is the government uses that by just using, you know, taking all the benefits that would accrue from that to society by using them to just finance their government debt. So they have one of the highest rates of government indebtedness in the world, and it allows the government to continue to operate enormously stunningly inefficient, destructive monopolies on things like electricity and cell phones and, you know, garbage collection and so on. And that's what's really bad about the country. It's just funny enough, you know, the electricity company just the other day, they uncovered that the country still has blackouts at least three hours a day everywhere in the country. And this is a country, you know, back in the 60s, somebody turned up the newspaper headline the other day of a first page story in Lebanon talking about how the power was going to be out for 20 minutes today. This was in the 1960s. And now today, 50 years later, you know, it's the least that you can get there's three hours of blackouts per day. And then recently, they uncovered that in the electricity company, the national monopoly, obviously, which loses more than $2 billion per year, which for a country that size is enormous, they, you know, the people who run that company had an entire floor on the company being used as a what they call the hatch, place to hatch chicken. So they had an entire chicken farm in the electricity company because they have free electricity there. So this is the kind of inefficiency that you're talking about. And yeah, it is, you know, Lebanon still has a train station authority that is massively funded, but it doesn't have any trains anymore. It's that kind of inefficiency. So yeah, this sort of perspective, you know, I mean, governments everywhere will abuse their potential of printing money. And as an individual, you need to look out for yourself. And I think Bitcoin, wherever you are, you know, will protect you from that to an extent. I'm not saying, you know, you should put all your wealth in it, but I think having a little bit of it if you're in one of these places is probably a good bet for the long run, for your children, you know, not as a short term speculative instrument, because, you know, if you're planning on buying now and selling it next year, you could lose 80%. And I always tell people, you know, don't put into Bitcoin anything that you think you might need in the next 10 years, you know, in small amounts of money that you don't think you will need so that if it drops 80%, 90%, you're not in trouble. But if you're willing to wait on it for 10 years, if you have a low time preference, and if you're thinking of the long run, if you're thinking of your children, you know, then it's probably not a bad idea. I mean, personally, I don't plan on sending my Bitcoins anytime soon because, you know, I don't have a lot. I just buy small quantities. And ideally I'd love to, you know, I'd love to never have to sell any of my Bitcoins and just pass them all along to my children after I die. That's the sort of timeframe that I like to keep on it. Well, that's one of the things that I really enjoyed about this book is that you're not a Bitcoin fan boy and that really comes through. This is a historical and a bit of a technical analysis. One thing you spend a lot of time on and this is very near and dear to most libertarians is the idea of a true peer-to-peer decentralized currency where it's almost like you're paying each other cash in a parking lot somewhere. There's no intermediary and that's, of course, one of the great selling points of Bitcoin. Talk more about that. Talk about how important that is and how, with government money, with credit cards, with checks, with all other forms of payment, you don't have that luxury. Yeah, so I mean, the distinctive thing about Bitcoin, it's Bitcoin, I like the term it's been mis-evangelized. People have made a mistake of evangelizing Bitcoin as being cheap, free, instant payments all over the world and that's not exactly the case. It's not entirely the case. Bitcoin is not a payment technology. Bitcoin is a money. It's a hard money and that's really fundamentally the point. Bitcoin is a hard money, like gold, but with its built-in settlement network. So imagine if we just discovered this new chemical element on earth which is exactly like gold but fixed in its supply and also comes with this magical global network that allows you to have about half a million transactions with it anywhere around the world where you can click a button and in one hour it turns up in China. That's really the difference between it. So far, given that Bitcoin is not very popular yet, it hasn't grown, we're still at a point where everybody who uses Bitcoin is able to use the transactions on Bitcoin and the transaction fees are relatively low now. They're less than 10 cents or something like that, but we saw during the end of last year the transaction fees rose significantly and I don't think that's a bad thing. I think in the long run we're going to see transaction fees rise more and more and more. They're going to be the only thing that secures the network and I think there's a hard limit on how many transactions can take place on the Bitcoin network per day because the way that it functions, the way that Bitcoin is engineered is that every member needs to have a list of every transaction carried out by every other member and so that is a heavy computation load on any computer. Before I can send you $10 for my lunch at your restaurant, you need to know every single dime spent by anybody anywhere in the world to make sure that my $10 are still there. That's really one of the main reasons I wrote the book. I'm trying to explain that Bitcoin is not going to be the replacement for Visa or for Mastercard or for Paypal. I think these payment mechanisms will be or can be built on top of Bitcoin or things similar to them will be built on top of Bitcoin and my expectations that we're going to get things that are far more efficient. But in my opinion, in the element of peer to peer individual to individual is very important Bitcoin don't think and this is where another way in which I differ with a lot of Bitcoin is that this dream that every single person would be able to carry out a final settlement transaction with everyone else for every coffee that they buy I don't think that's workable in the long run. Bitcoin won't scale that way. However, the advantage is not going to be that it's going to give us cheap coffee payments and cheap lunch payments. The advantage is that it's going to allow us to have a far wider far bigger far more decentralized network of institutions able to perform final settlements with one another. So if you look at the world today, we have a couple hundred central banks in the world but effectively really we only have one central bank and the only way that payments function quickly in the world today is that they are effectively all going through the Swift network which is through the Federal Reserve. So if I pay you with PayPal with a Visa with MasterCard with a bank transfer, effectively the central bank of the US could stop us from making this payment no matter where we are in the world. You could be in China and I could be in Kenya and the US central bank could stop that payment. It's all centralized because the nature of the settlement with gold which I believe is still the monetary standard and that's why central banks still hold enormous quantities of gold and as I mentioned in the book, central banks today hold far more gold than they did under the gold standard and that tells you that gold's role has not been removed. But the point is that settlement with gold is very expensive and so that tends towards the centralization of it and that tends towards the centralization of political power. I think what Bitcoin allows is the distribution and the decentralization of the final settlement layer so that instead of having one central bank we'd have something like maybe 10,000 maybe more institutions that function like central banks none of which can affect the money supply because none of them can alter the Bitcoin code but all of whom can perform final settlement of payments and I think this is what really excites me about Bitcoin. It's just turning central banking from this institution that allows the state unlimited power and unlimited control over its citizens to this utility that's going to be just like local maybe post offices is a bad example because post offices are usually government monopolies but just like a basic utility that is available all over the world that people can opt in and out of people can choose their local bank and I think that's the really exciting thing and we're seeing this develop now and that's the reason behind the title of my book using the way that Bitcoin is scaling we're already seeing that it's scaling through layered settlement solutions so more and more of Bitcoin's transactions are not being carried out on chain they're being carried out on second layer so it used to be a couple of years ago for instance if you had an account in exchange and I had an account in exchange and I wanted to send you Bitcoin from my account to your account the exchanges didn't care they would actually transmit that transaction onto the Bitcoin blockchain and they'd pay the transaction fee for it then as the Bitcoin transaction fees rose which is expected to happen at some point inevitably exchanges became much more careful about it and so they would settle the transaction between you and me on their ledger and then they would only settle transactions on Bitcoin's ledger when you and I will take money out or send money into the network so we're seeing that for every transaction on Bitcoin there are maybe 2, 3, 5, maybe even 10 transactions happening off chain quite similar to how settlement with the gold standard happened and that you know for every one time that a gold ounce or a gold bar moves between one bank and the other you have hundreds of transactions of the pieces of paper and the checking accounts that are backed by that gold move but I want to get back to this point you made this is not how Bitcoin was sold right? it was sold as every time you spend 4 bucks at Tim Hortons you're going to use your Bitcoin and Tim Hortons is going to accept it and all that's going to have to show up on the ledger you know so I think it's an important point you're making this is a way to have a non-governmental settlement process and I think that has a tremendous value in itself but in addition to we're probably not going to use Bitcoin swipe every time we go to Tim Hortons for 4 bucks I also want to bring up another sales pitch that was made with respect to Bitcoin that is banking for the unbanked you know imagine a guy a merchant in a bad part of Africa in Angola doesn't have access to commercial banks commercial banks won't go in there doesn't really have access to small business credit doesn't necessarily have the ability to go out and make change you know physical cash change for his would-be customers but nonetheless wants to have a little farm operation wants to have whatever kind of operation and people said well cryptos are going to come along and they're going to give this guy in Angola the opportunity to do any kind of micro payment or micro lending and without transaction fees if Bitcoin transactions fees are high then it's of no use to the guy in Angola yeah but I mean I think the you know it's and that's another example of the misadvangelizing for it because you know the idea that the person in Angola is going to start using Bitcoin I think it's you know as Bitcoin as a payment network doesn't make sense unless you already have a number of people who have cash balances in Bitcoin right so you know right now if you and I wanted to buy and sell something you know anytime that you and I buy or sell something from somebody most likely that person doesn't have any Bitcoin you know the chances of coming across somebody who owns Bitcoin today is less than 1% of the world's population so the likelihood that they want to accept Bitcoin is very low that's why I never really spend my Bitcoins and I rarely ever get paid in Bitcoin well in my case it's a little bit different because I you know being active in Bitcoin and writing and working in Bitcoin come across a lot of Bitcoins but see the more people have it the more people have cash balances in Bitcoin the more these trades become possible you know so it's sort of putting the horse before well when you think you know okay look at the people who are who don't have any Bitcoin and let's let them use this thing you know if they don't have any Bitcoin yet it won't be useful for them but once people have enough cash balances, significant amount of cash balances then they can start using it but when it comes to transaction fees you know I think the misunderstanding is this the you know the on-chain Bitcoin transaction contains a level of security that is simply overkill for any kind of individual transaction that you and I want to have well maybe not any kind you know if you want to escape Venezuela and you know maybe that is a useful level of security but for the vast majority of us you know it's like putting your daughter's piggy bank in Fort Knox okay sure it will ensure security of it but it's just your daughter's piggy bank it's got 20 bucks in it you know as long as you have a level of security that makes attacking it worth more attacking it cost more than 20 bucks then she's likely going to be alright you know all these other methods of payment getting built on Bitcoin but a problem is that a lot of people just don't have the patience to wait for these things they expect Bitcoin to just come out of the box functioning as global new monetary system and that's just not going to happen it's going to take a lot of time for people to learn about it to learn how to use it for people to hold it for the value to go up for people to understand why it matters and you know Rome was not built in a day a Bitcoin standard won't be either well let's talk about there let's talk about privacy and security is are Bitcoin transactions traceable are they hackable it's a complicated question the best way I like to answer this is that it's similar to the internet in that you know can you send an anonymous email from the internet maybe can I track you down maybe it depends how good you are at hiding your tracks how good I am at uncovering your tracks but the reality of it is that it's not a good starting point if you're concerned as privacy if you're looking for things to do things that are illegal it's what I described in my book is that Bitcoin is maybe good for victimless crimes obviously I don't believe that there is such a thing as a victimless crime but because it's a victimless crime there's nobody there's no dead body left behind for people to go sniffing around trying to figure out how did that crime take place however if you're committing a crime where people are likely to come sniffing behind you to try and figure out what you've done fundamentally this is a ledger that contains all the transactions that have ever happened and it's distributed over thousands and thousands of computers all over the world so if you'd like to commit a crime this is a very bad starting point it's a bad place to start and I think a lot of criminals have used Bitcoin but a lot of criminals are in jail precisely because they use Bitcoin so I always say for any criminals listening stick to the US dollar the international currency of choice isn't that interesting because a lot of the Bitcoin critics say oh it's going to be used for black market activity for drug dealing for nefarious purposes maybe for prostitution or human trafficking and as you point out your human trafficking activity is now going to be on the ledger on thousands of computers around the world yeah definitely not the right place to do it I mean with physical cash you just pass the physical cash on and if you wear gloves it's completely untraceable there's no way to trace your fingerprints on it so it's arguably graphable gold can be melted into other forms as well which makes it even more easy to hide Bitcoin I don't think is ideal in that sense and the way that I see it that's not necessarily a problem because the privacy I think that we want from Bitcoin the ability of people to buy things that their government doesn't approve of I think it's going to be easy to build on second layer payment solutions being built on top of Bitcoin so the way that I see it is that you know there'd be a first layer of settlement between institutions and in this situation you know the lack of anonymity is a good thing because it would make those institutions transparent and easy for people to audit because all of their transactions are less than a republican culture and they become more identifiable but then you know the way that I see it is in a free market these institutions will give privacy to the people who want it and maybe they you know there are people who might not want it so I can imagine a scenario where you know people want to have their money in a bank that does not deal with drugs or that does not deal with alcohol for instance and you know that bank will ban you from using their payments to buy drugs or alcohol and you know you don't like it you can go to another bank which will not care about where you use your money so I think these sort of things are going to be easy to implement on second layer solutions but on the main chain I think the idea of privacy has been massively oversold to the detriment of many people sitting in jail right now because they don't want to do this. Well what would be of greatest interest to our fans would be of course be tax privacy but in a certain sense I don't think bitcoin solves this because a tax authority where you live can present you with a tax form and if you in fact sold something using and received payment of bitcoin had a capital gain they can ask you did you sell anything using cryptocurrencies and you can lie and say no and perjure yourself on a tax form and you probably get away with it that old analog world in that sense that's true I mean it's yeah it's you know I'm where did you get your coins from and who knows how they're going to be traced you know if they can trace it back so you bought it from some guy off the street well what if that guy is investigated one day and then you know he goes through the they go through his phone records and they find out that you exchanged emails or messages with them and they could find it so you know I wouldn't recommend it in that sense I would be listening no offense to some of the exchanges but if anybody listening thinks a place like Coinbase wouldn't roll over to the IRS I suggest you take a look at UBS and some of the Swiss banks in terms of their offshore holdings they rolled over quick when the IRS came the ability to track things down is it's like an arms race between the person hiding and the person looking and unless you're extremely extremely extremely expert in in how Bitcoin and how its blockchain works and then hiding your tracks you should probably not take your chances and thinking yeah they're not going to find out about it's I highly don't recommend that people think that you know oh well you know I bought it from Coinbase but it was five years ago and there's no way anybody will find out about it I really don't recommend that if you don't some people are expert and at this they can hide their tracks and so on but you know if you're if you're listening to me to learn about Bitcoin then you probably are not one of those people I am not one of those people and you know I would not recommend it I wouldn't want people to get into trouble because they heard me so I like to be very clear about this well let's talk about that though in the past few years there is emerged another term we're using today a lot of scammers there's kind of a phony crypto industry and of course when the price of Bitcoin was very very high there were a lot of people who had these instant new careers and they were experts and they were telling us X, Y and Z and you know Warren Buffett says when the tide goes out we'll see who's wearing shorts that's kind of happened with Bitcoin it seems like there's less hype yes definitely and this isn't the first time we see this we you know Bitcoin it's the supply is perfectly predictable but the demand is always varying and so it's natural that bubbles will form and bubbles will crash and you know it's just a typical thing to expect in an easy money economy because at this point Bitcoin is an asset in a monetary economy denominated in easy money whose supply shrinks and increases over time a lot of people have capitalized on it but I think it's just an inevitable part of market teaching people what's right and what's wrong and people figuring out this is how reputations are built and destroyed and people will figure out what's right and what's wrong over time I think so safe one thing I really liked about the book is you mentioned the belly pock period from the 1870s to about World War I where a lot of great advancements were made under a gold standard it's some it's sort of interesting that it's now libertarians are never supposed to say anything good about the 1800s it's become this period where the past is always bad we all have to be progressive now so I thought it was really neat that you brought up how productive and flourishing economically that period was absolutely and I think it's both economically and culturally you see this aspect of it in terms of innovation there's a study that there was a book that was written a few years ago about the most important innovations in human history it contains about innovations more than 6000 and so one scholar then took these and plotted them by time and then measured them against per capita and you find that the most innovative period in human history was that period towards the end of the 19th century that's a quantitative way of analyzing it but a qualitative way of analyzing it is I list the things that were invented back then you know everything that we tend to think of as the 20th century gave us this technology was more or less invented in that period it's astonishing you know the airplane, the car the elevator sanitation, hot and cold running water all of the things that make modern life possible were largely invented in that period and in the 20th century they were popularized they were made cheaper they spread out all over the world but I think that there's a strong case to be made that that was the time where people had the lowest time preference where people were thinking of the future much more people were investing much more and capital accumulation was happening allowing more and more innovation and more and more invention to happen and I think you also see it in terms of arts and culture and I think there's a great book by Jack Barzun called From Dawn to Decadence it's astonishing you know the book is a massive volume of I think a thousand or eight hundred pages or something like that and he talks about western civilization and he says basically the beginning of the decadence of western civilization he times it to 1914 and you know politically economically socially but also in terms of art and culture and it's astonishing that you know that date in 1914 it's no coincidence that that was the beginning of World War I and it's also no coincidence that I mentioned that was the beginning of the move away from gold towards government money I think the two are extremely related because once you move towards government money and that's really one of the key concepts in my book once the money is losing its value you know you move from people who are future oriented towards people who are more present oriented and so you see art today is you know it takes an artist 15 minutes to draw the painting whereas you know in the past it would take them years and years of hard work to be able to complete the masterpiece and I think that's really no coincidence it's we like to pretend that everything is better today but we have to differentiate between things being better because of the result of the technologies that were invented yesterday so of course you know today's cars are better than the cars of 100 years ago but we're not inventing the new car you know and if I wanted to be a little bit controversial about this this is going to really offend tech people but really even the telecommunication revolution which we think of as the 20th century thing you know you could say the internet is just the telegraph with bells and whistles on it I mean it was in the 19th century the graph and the telephone and even the computer that's when they were invented that's where these inventions came along and so in the 20th century we improved on them but I think if we look objectively of course the standard of living today is higher but it's higher because we're 100 years we've had these things for 100 years but we're not inventing as many of these things as we had back then you know it's interesting the same globalist self-proclaimed globalist I don't think they're real globalist but globalists hate Bitcoin and they hate the 1800s with the passion as well it's interesting that here's something that's they don't like a potentially global institution a global cryptocurrency that they don't control so they're globalist only when it comes to things under their control that's an excellent point I hadn't thought about it you would think that the sort of globalist progressive people who are always going on about you know one world and one world government and so on they'd love it but no you're absolutely correct because it exposes their agenda it's not really about having the world being open on one another it's really about having the entire world being controlled by people with their agenda who think the same thing is a big thing but I hadn't thought of it that way it's a great point well you know we're about out of time but you know it's great that Nassim Talib is associated with you it's great that your book is on a large publisher and he has this incredible quote on the jacket he says look even if cryptos like bitcoin fail now we have the tech we know we can do it I just wonder if just knowing we can do it if that alone will act as sort of a de facto check on central banks in other words the cryptos even out there does that force them to maybe be a little less expansionary yeah you know the other day I was giving a talk in Toronto and it occurred to me that you know even if bitcoin doesn't succeed you know all that we need is maybe you know if it Venezuela if it sets an example for Venezuela that more and more Venezuelans start moving let's say towards bitcoin then it forces it forces a bankruptcy of the current socialist kleptocracy in Venezuela and then a new government that comes along in Venezuela will know that you know if we mess around people can just defect from here to bitcoin maybe bitcoin doesn't end up being adopted all over the world maybe it doesn't end up being a new monetary standard but it acts as a sort of the metaphor I gave is a sort of monetary Batman lurking in the shadows of every society so that you know any time a government begins to inflate people can just start moving towards it and as they start moving towards it you know because the supply is limited the value rises so it's a very attractive notion for people to start jumping onto it so maybe it's just going to be this you know this bad guy that is going to force discipline on governments and there's another scenario which is I think the most likely scenario if you wanted to kill bitcoin the most effective way to do it you know all of the scenarios the people give is governments will ban it or they will shut it down or they will close the internet and I think these are highly unlikely because they don't address the economic incentives and as you know economic incentives are very powerful so you know in Russia they tried all sorts of things they tried to ban genes in the Soviet Union and now look the Soviet Union is gone and everybody's wearing genes there so you know economic incentives are more powerful I think these ideas for banning bitcoin won't work but one way that you could maybe at least make a serious dent in bitcoin's growth would be to restore the gold standard you know if everywhere in the world had sound money and you had a free market and banking and people had the ability to have bank accounts that respect their privacy and respect their monetary sovereignty I think that would seriously undercut demand for bitcoin and I would personally be very happy of bitcoin's entire you know it turns out to be just the head fake that gets us back on the gold standard it would have more than done its job as far as I'm concerned absolutely ladies and gentlemen there's a lot of bitcoin books out there there's a lot of crypto videos you can watch you don't need any of them you need this book the bitcoin standard by our guest Safideen Ammus follow him on Twitter that's the easiest way to keep up with them it's just at Safideen Safideen and I'm really enjoying some of his political commentary he's got some great tweets lately about what's happening in Turkey which is starting to get alarming so that said Safideen thank you so much for your time it was a great conversation ladies and gentlemen have a great weekend