 All right Here we are yet again. It's Thursday. It's one o'clock. I am Nick Gillespie with reason and here is Zach Weismiller my reason associate and colleague Super video producer. We are joined today by Taylor Lorenz of the Washington Post and We're gonna be joined later by coin centers Peter van Valkenberg We're gonna be talking about tick-tock bands about the restrict act and the restrict act and basically moral panics Congressional pants wedding not simply because they're so old but because they're worried that tick-tock is undermining The very possibility of of America going into the future Taylor Lorenz. Thanks for joining us Yeah, thanks for having me. All right, so what we're gonna do We're gonna talk first. Let's uh, Zach Let's play that clip from Kathy Rogers McMorris who the congresswoman from Washington State who Maybe a decade ago was actually seen as incredibly pro technology She was part of a new wave of republicans who were embracing the internet and and all that I promise Let's run this clip real quick trust tick-tock will ever embrace american values Values for freedom human rights and innovation Tick-tock has repeatedly chosen the path for more control more surveillance and more manipulation Your platform should be banned All right. Well, you know, it's nice to uh, you know, see congress not mince words and the restrict act is Actually kind of open and it wants to restrict the ability of Businesses and individuals to actually speak and express themselves and just to get on with their lives Taylor before we get to talking about the restrict act and we have a couple of other great clips From the the recent tick-tock hearings that you've covered extensively Let's start by talking about tick-tock tick-tock has what like about a billion users worldwide or something like that It's got a hundred and fifty million americans How are these people so deluded? What are what are they getting out of using tick-tock because you know and again just to emphasize we talked on a recent interview podcast in 2019 what drew me to your work was that you were Almost alone among tech reporters and saying, you know what like a lot of these social media platforms, especially something like tick-tock You know what they're kind of good. They're allowing young people marginal people Individuals to express themselves in a way that wasn't available. So, you know flesh that out a little bit. Why is tick-tock possible? Why is tick-tock popular? Yeah, well tick-tock is completely unique. It's it's very different than the way american social platforms are structured Um, specifically, you know, us-based social platforms are primarily based on this follower notion Like, you know, we're all used to it You saw you've downloaded app and then you as the user have the burden of having to like, you know, find people Subscribe to them follow then you're getting all their content Um, and this is kind of just a heavy burden on the user. It's annoying tick-tock's innovation is this algorithmically driven for you Algorithm so for you feed so instead you could be on tick-tock You could have no followers and you could follow no one you could post a video and it could reach millions if people find it engaging basically what tick-tock does is it takes every video and it sort of tests it with larger and larger audiences and so It really gives people that wouldn't have previously have had a platform because they haven't spent years building up a subscriber base for instance, um, it resets that whole power dynamic where there now anybody can have a voice and kind of go viral assuming they post something engaging enough, um, and You know, that's something that we don't have here. I mean, we know like on twitter for instance, right? It's like all these legacy people with hundreds of thousands of followers. Someone joins twitter. They have no followers They have basically no voice so You know Yeah, well and um, how much at least in the earlier days, uh tick-tock also seemed to have It was less about politics, uh, and it seemed to be more about Kind of expressing either who you are what you like to do or you know, I mean to call it cultural is is not quite right Because all social media or all media is is cultural but it seemed to be almost a respite from Redoubt from the politics that we were seeing on facebook and on twitter in particular Yeah, well, I think that you know Tiktok was primarily used by younger people who I mean some of them who are very political It's a big home for activism, but it fills itself as an entertainment platform That's the way it talks about itself, right? It considers itself competing with netflix and hulu So it's showing engaging content, but it's not it's not necessarily like, you know Becoming this place for politics the way that like facebook has and twitter has because they've courted those political people tick-tock absolutely does not Court that type of stuff. I think because of the geopolitical stuff Yeah, you said that it's completely unique because of this for you algorithm And that's something we heard a lot about in the congressional testimony That this unique algorithm is is the problem because it's uniquely addictive and damaging to children in particular because of the artificial intelligence behind it is not geared to keep People safe. I guess so have you seen any evidence that Tiktoks algorithm is uniquely damaging as compared to youtube twitter facebook and so forth No, I mean I was just dying in that testimony because we have seen time and time again facebook twitter, you know youtube Amplify, you know horrible extremist content through algorithmically driven feeds and recommendation systems that harm has been proven That harm has not been as proven on tiktok. Um tiktok has very strict moderation guidelines for sure You know just the way that facebook does obviously there's things that you can't upload. Um, but you know It the problems that they when they're talking about tiktok Yes, algorithmic feeds have problems. Those are those are problems across like all algorithmic feeds That's the problem with optimizing for engagement that comes with certain problems Those problems also appear on twitter instagram and youtube in fact as we've seen, you know Those companies have been around longer, but we've seen a lot more damaging stuff come off out of those companies Which is why they're so eager to make tiktok the boogie man Uh, how much of it is also? I mean, uh, can you explain the ownership structure of tiktok? Particularly in the united states because you know it i mean all forms of new media You know whether it's you know these these are old examples, but they're relevant You know whether it's the novel whether it's the radio whether it's movies whether it's rock and roll Or video games all new forms of media as they gain an audience scare the shit out of you know the The adults in the room, right? But tiktok not only is new and is growing, you know very rapidly But it is also, you know somehow, you know a direct pipeline into the chinese communist party How much what is the ownership structure? of Tiktok and how is that influencing the discussion about it? Yeah, so tiktok is a company that's owned by bite dance. Um, so what happened is musically was an american company, right? Um, musically took off was incredibly popular once again everyone in tech ignored it and chat on it and all of that Um bite dance cloned that up and found success. Um cloning that up called doying in china, which is basically chinese tiktok Um, and then they bought musically and musically became tiktok So it's just very funny to me because where were all these concerns like you had all these concerns about tiktok now You let it sell you let tiktok the musically was an american company that they allowed that sale to happen to chinese company like just four or five years ago. Um But so musically eventually became tiktok. Um, and tiktok is owned by bite dance, which is chinese corporation bite dance is based in china tiktok I actually don't know where tiktok is based. Uh, the ceo is in singapore So he's there and then uh, it's the us it's sort of run regionally Around the world. There's the american market. Um with american ceo there. We have not i mean look I think all journalists we would love to find a smoking gun that links tiktok somehow to the chinese communist party I think there's certainly viable questions to ask about ownership structure and the details of that but You know It was ridiculous to see them asking the ceo if he was part of the chinese communist party He's not even chinese Let's run the uh, the great clip that you have zack from uh, buddy carter Uh, congressman this committee including myself who believe that the chinese communist party is engaged in psychological warfare Through tiktok to deliberately influence us children You know you see behind me If you look behind me mr. Crew you see some of the challenges that we've seen on tiktok You know about them. You know about the milk crate. You know about the About the blackout challenge. You know about the uh, nyquil chicken challenge the benadryl challenge Do they have these same things over there? Do they have these kind of challenges? In china congressman i'm really glad you asked this question. Do they yes or no? I'm not sure because well come on now. You're not sure. I really i'm not sure Yeah, let's uh, you know first, let's uh, just pause however the whole nyquil chicken Uh craze which you know, it has I guess now, you know tied pods are yesterday. You know, they're like, uh Brussels sprouts with bacon and olive oil. Um, but yeah talk about Let me just say every single one of those things that he cited is Face is is fake. It's a lie. It is not true If that is a lot like that is just is just flat out made up nonsense I cannot express this strong enough none of these challenges exist on tiktok or have ever existed on tiktok The milk crate challenge which he's talking about is from a 2016 2017 facebook challenge the blackout challenge That is a thing that 82 children died of between the years of 1995 and 2007 or eight Way before tiktok the benadryl thing good morning america did an entire segment on that in 2002 because it was such a problem among teens This is not these are not tiktok challenges and It's just so ridiculous to say they're doing psychological warfare with these things that don't exist that that are That are not so yeah, so it's it's it's you know, doubly stupid right because these are not tiktok challenges In any meaningful way and these are the kinds of moral panics that happen all the time My favorite in this whole scheme of things going back more, you know a couple decades was the jenkom challenge, which was I mean it was made up but it was the idea that You know teenagers were fermenting their own urine and excrement and huffing it And it you know a bunch of not surprisingly police departments sheriff departments in florida sent out advisories and it's you know, it's a joke. I mean it's like smoking banana strings or something like that in order to get high Back in the 60s So it's it's wrong that way, but then the psychological component This seems to be a very lively fear about tiktok because it's being directed by the chinese government And you know what they're doing is they're having our kids You know kill themselves on milk crates or choking each other or eating You know everything from chicken to impossible burger to whatever soak to nyquell While chinese kids on the equivalent of tiktok and tiktok does not exist in china in the same form But they're doing you know, they have calculus challenges. How much of this Is just a recurring fear That gets expressed through new media teller Yeah, I mean it's total nonsense and it is a complete recurring fear And I actually wrote a big feature about this stuff for the atlantic years ago before tiktok even launched and it's so relevant Because I used to I spent years debunking all this stuff related to youtube And even facebook right the momo challenge was This thing was you know children were killing themselves because of this whatsapp message These are all related to Like playing into parents worst fears right parents see their kids spending new time on an app They don't understand this new technology. Some police officer says, you know, oh, that's actually that could kill them I mean snl famously did a skit god like nine or ten years ago mocking all of these, you know, fake teen moral panic news stories, but I think in the age of You know misinformation and all this stuff spreading all over it's just it's easy The stuff is even It's just it's taken hold in a way that it never has before and I think that's because tiktok You can play into that china fear, right? It has that extra layer of like, you know, the chinese Yeah, what do you make of that fear though of what? buddy carter laid out there that on doyen none of this is allowed and so therefore There's something nefarious going on here because the the chinese holding company that Owns or the chinese parent company that owns both of these Is allowing the algorithm to run loose over here, but you know Quote-unquote protecting the children over there It does that raise any red flags for you, but it doesn't exist here It doesn't it's not allowed here as well because it doesn't exist If it was a lot if those things were happening, okay, maybe he would have a point. None of those things are happening It's nonsense. The nightclub chicken thing is a is a meme from 4chan and and it was on reddit and twitter. It's a joke. It's not a It's not even something that's viral. None of these things are actual viral things Like no influencers are doing that. It's like the tide pod thing, right? We're like maybe once it's viral enough people do it ironically and actually based off this congressional testimony Searches for all of these terms went up once again. They perpetuate this stuff But it it doesn't exist here. You can't say oh, well, you know, you're all the stuff is existing here But not in china. No, it doesn't exist here either. We have no idea what's happening in china, frankly But we we know that it's not happening here. So the whole outrage over it. What are you outraged? It doesn't exist Uh, zack, you want you've got another clip, right? We should look at from the hearings Yes, I've got a clip from dan krenshaw who I represent from texas who I think summarizes the the fears More succinctly than anyone else in this testimony So I just like to play his summary here and get everyone's reaction to that TikTok is able to collect massive amounts of personal data. We all know that That means it could if it desired to use this data to influence narratives and trends create misinformation campaigns encourage Self-destructive behavior purposefully allow drug cartels to communicate freely and organize human and drug trafficking And to be fair all social media companies could do that Here's the difference. It is only tick talk that is controlled by the chinese communist party All these other social media companies are not I want to say this to all the teenagers out there and then tick talk influencers who think we're just old and out of touch And don't know what we're talking about trying to take away your favorite app You may not care that your data is being accessed now But it will be one day when you do care about it And here's the real problem with data comes power. They can choose what you see and how you see it They can make you believe things that are not true They can encourage you to engage in behavior that will destroy your life Even if it is not happening yet It could in the future the long-term goal of the chinese communist party is the demise of the american power And that starts with our youth at any moment They could demand that all of tiktok's data be used to design An ai algorithm with the sole purpose of promoting chinese interests and destroying our society from within You want to know why that's democrat why that's why democrats and republicans have come together on this? That's why we are so concerned Man, I just hope that he brought an extra diaper because he just shit himself over the you know, like I mean, he's he's an ai algorithm just like trying to compute doomsday scenarios, right? Let's start first with the idea that the chinese communist party is controlling tiktok in america. Is that plausible I mean i'm i'm not a china expert I think these things are good to interrogate, but there is no evidence of that And you know, I think we saw that them correcting that type of misinformation. I I think I mean, I know that china experts, you know have opinions about this, but there's just We we need proof right to but if we're going to be making laws and we need this we don't we don't have the smoking gun It is what it is You know if that stuff existed it would be a completely different conversation as you'll note it what he says What crencha says many times could this could happen this could happen Sure, it could a lot of things could happen But we don't we we need to we need evidence that it is happening or some sort of proof Could you could you also then the second part of that the one is okay You know that the chinese government is behind everything and that's you know, why our kids are increasingly dumb and You know, whatever anxious depressed Unsexual or too sexual etc. But then there's the other implication in all of this is that tiktok Like all other social media platforms before it is uniquely addictive. Is there any reason to believe that? Uh social media becomes you know, it's it's like watching the ring You know the the video in the ring Movie from japan that was and then had an american version, you know, you watch it and then 72 hours later You're going to commit suicide Could you talk a little bit about how people actually use social media or programs or platforms like tiktok? Are they enslaved by it or do they actually do a pretty good job of regulating and moderating their views? I mean, I just think it's like any form of entertainment. Do people spend nine hours watching tv sometimes and binging tv Yes, do people play video games for 10 hours? Yes, do people spend too much time on social media sometimes? Yes This is entertainment as tiktok bills itself as an entertainment company. I don't know if it's the government's role to come in and regulate You know how much time we're spending on an entertainment platform. I just that seems dystopian I mean sometimes you want to let loose and watch too much. I just think this is you know, we need to be able to We take some sort of personal responsibility here I mean we can't just it's wild to me and and the way he's talking of you know As he mentions sort of flippantly all social media companies can do that those things that he's listed those those examples He lists in the beginning There is evidence that facebook has done every single one of those things, right? There's evidence that youtube has done every single one of those things There's not evidence that tiktok has done those things. Do I think that tiktok could sure It's a social media app. It's an algorithmically generated feed. We know the problem Well, I I speak as a survivor of the roller disco craze of the late 70s and thank god the government shut down all the You know skating rinks. Otherwise, I wouldn't be here to talk Or to tell tales, but it's also true that facebook, you know facebook which is you know by a Large percentage the single largest social media platform on the planet at least in north america It seems to be losing its grip I mean that which is also one way we know this is because they've been calling for regulation at least since 2018 which is typically A sign that a company is losing market strength and market power So they either play ball with the government they go to the government as mark suckerberg at one point didn't said like Yeah, yeah, it's a good idea to regulate us. We'll help you regulate us because we're the only ones who know our business Yeah, I mean, I think I think facebook's facebook losing ground is what is also You know, they have lobbied very aggressively against tiktok so much of this stuff that you hear from congress people is You know, basically facebook talking points and look, I don't think that I don't think the government should be regulating how much time we spend on facebook either right like I mean, I just all of this is just seems very Wild to be having these discussions Yeah, I I agree that it that the I agree with that fundamental assertion that the government It shouldn't be the government deciding how much time you spend on tiktok or facebook It or even if tiktok should be allowed to exist within the united states Even if there are some concerns. I mean personally, I am Somewhat concerned like I would I don't have tiktok on my phone. I don't use it some of my anxiety is tied to my experience reporting in hong kong and seeing How the chinese government acts I kind of ask myself the question like would the hong kong protesters Use this app and I think the answer is is definitely no There is You know, there's there's no direct line to the tiktok company to the ccp There is a ccp member That is part of bite dance and and that is concerning to me that being said I think it I'm sorry go ahead. Is that true because I think Oh, okay. Yeah, because that was one thing that I think they said was false and I never was Yeah, I can pull up Right here, you know what is incredible as as you're pulling that up, you know things like whatsapp telegram signal and other, you know Services that do encryption and whatnot those are flourishing as well So, you know this idea that tiktok is going to become the one thing that rules us all Seems not only premature, but just completely delusional Yeah, this is from a report that was submitted to the australian congress on bite dance The bite dance party secretary and chief editor zeng fu ping Declared the bite dance should transmit correct political direction into every business and product line to guide the algorithms and He's not directly involved with tiktok He is officially affiliated with the chinese side of the business The concern is that there might be some crossover between the two parts of the organization since it's the same parent company That being said, I think that this is a kind of buyer beware type of situation And I think that's what rand paul was getting at in his Opposition he stood up and opposed senator josh holly's bill and we're going to play a clip from that In a second because I'd like to get your reaction To what rand paul pretty much the sole republican that that I know of who has spoken out against the impending tiktok ban I think we should be aware of those who peddle fear I think we should be aware of those who use fear to coax americans to elinquish our liberties To regulate and limit our first amendment rights Every accusation of data gathering that's been attributed to tiktok could also be attributed to domestic big tech companies In fact, one of the bills they're looking at doing is broad enough that the president will be given the power To designate whatever country he sees fit to be an adversary and whatever company underneath that definition It would basically be a limitless authority for the president to ban speech Before banning tiktok these censors might want to discover that china already bans tiktok Hmm Do we really want to emulate chinese speech bans? Aren't we the ones that say it's wrong for china to ban speech? So we're going to be just like china and ban speech. We're afraid of I hope senator mines will reflect on which is more dangerous videos of teenagers dancing Or the precedent of the u.s. Government banning speech For me, it's an easy answer I will defend the bill of rights against all comers Even if need be from members of my own party What's your reaction to rand paul's comments taylor Yeah, I mean exactly what he said. It's completely true like all of this stuff about data privacy Yes, we have a huge data privacy problem in this country The foreign adversaries want data on us citizens very easy to get because Literally, we have almost no privacy regulations. So, you know He's I mean, I basically agree with everything he said Um, he also, you know, I I do love the prospect of you know, the 2024 election being like the footloose election Where it is going to come down to politicians who want to ban dancing on tiktok Versus people who don't want to I think we know how that movie ends but Taylor, let me ask you because you also, you know, and I'm assuming you feel a little bit uncomfortable Being on the same side of something with rand paul Partly because you've talked a lot about misinformation disinformation mal information on social media platforms You are steadfast in saying, you know, it's insane for the government to ban tiktok It's insane for the government to tell us what social media platform Or you know, what what kind of media we can consume and for how long What how do you go about policing? You know, and these are contested uh categories, right of misinformation disinformation mal information How do you go about policing that without abrogating people's rights of self expression and freedom of speech? Yeah, well, it's always bizarre to me when people accuse me of saying like, oh, I want some sort of censorship because I talk about misinformation Never once have I said that like the government should be the one determining what's misinformation or censoring anything on social platforms I've always said I think I think misinformation and disinformation. Look as journalists here. It's a huge problem It's very frustrating people are grossly misinformed on a lot of stuff because of it The solution to that in my opinion is better media literacy explaining to people how these platforms work I mean, I always say the best way to debunk, you know of rumor and I've learned this about rumors about myself, right? It's it's it's not even to just say like delete that right like get it taken down It's to explain here's what's happening, right? This person is lying. Here's why they're lying Here's the shape of this campaign that it's taking right like I just I think that the government does not have a good track record On deciding what's misinformation or not if they did us reporters wouldn't have jobs, right? So you know, I Do you feel like, um, you know kind of digital natives, uh, you know, and at this point I mean, I guess the the true generation that's digitally native might be gen Z or younger people But do you do you feel like they are? They're up to the challenge of that kind of radical media literacy or skepticism Um, of you know of kind of vetting what kinds of information they're they're getting or are they Even more kind of prone to the sort of confirmation bias that those of us who you know, remember the days of broadcast tv might be Yeah, I mean look, I think I think we have a huge problem with media literacy in this country across the board It's not just boomers. It is also people on tiktok and we believe everything they see on tiktok and youtube YouTube is a big one that I hear all the time um You know Are they up to the challenge? Maybe not right now, but they could be I mean I think if we took this problem seriously And if people in power took this problem seriously We could have a better system and we could have a more educated public You know with a more diverse media ecosystem by the way, I'm a huge proponent of independent journalism You know journalists on social media people getting their voices out not just these legacy systems and legacy media but um But we need people in power to want to do that and of course a lot of people in power They're busy, you know just peddling their own brand of misinformation So they don't really have an interest in an educated public and that's a huge problem That's been a problem since even before social media. I mean I I completely agree with everything that you're saying there that this this is the role of journalism And this is the challenge of our time is to try to create an organic kind of media literacy And like healthier ecosystem But that's not what i've seen unfold over the past say Five seven years what i've seen is a concerted political effort Starting around 2016 to create a perceived crisis around Mists and disinformation and I this is now converging with the fears of china And both of these things have like a root truth to them But politicians are running with both of these things to now This is to now exert what what we're now seeing as the most authoritarian Version of a crackdown on a social media app But we've been seeing it build up to this In the ways that we've had these, you know, kind of sketchy public private partnerships in terms of police saying misinformation online so Do you worry? I mean, do you agree? I guess that There has been that the kind of feeding into that that perceived crisis And and the idea that the government needs to act on that crisis has kind of created the conditions For what we're now seeing unfold with tiktok Yeah, I mean, I think undeniably all of these fears Are playing into into this tiktok stuff I think also these lawmakers are being very savvy in you know, touching on these lightning rod issues that they know Will instill fear and panic. Um, I think it's just you know, one thing that I try and do is my reporting is Debunk things and and explain to people how the internet works, right? And I don't think that any of these lawmakers showed Very much understanding of how the basic, you know, basic social media platforms work how the network's I mean the facebook hearings were equally as painful. This is not me just oh god. They were National humiliation It was just you know, we need people in power that understand these platforms intimately And also are not just using them for their own gain, right? Like of course, they're going to use them to get elected and stuff like that But but we need You know people in power that aren't just interested in their own power, which is very hard to find Of course, that's what everyone in power just wants more power But um, it's yeah, it's disappointing to see them rely on these these tropes And I do think that you know debunking Bad information is important. I think again, that's journalists do that every day And there's ways that we can make a healthier media climate That isn't banning apps or government crackdowns All right, we're going to leave it there taylor lorenz of the washington post most recently We'll have a bunch of links to everything you do in the show notes here. So thank you very much for joining us and The next time we get together, baby, you know, I like to prepare knikewell chicken in an instapot Um, you know, I feel like it tenderizes things and it makes the sleep a little bit better But we'll see you uh somewhere on the internet for the next insane not existent craze Thanks so much for joining us. Thanks for having me. Bye taylor Uh before we cut over to peter von valkenberg of coin center our next guest I just want to run through a couple of comments and questions uh Brand this uh wind 2100 says tiktok today reason tomorrow Not not if we have anything to say about it Four home says tiktok definitely needs scrutiny the same with uh facebook and instagram And others the reality is that this technology has been detrimental In its current form, but the government will abuse this you can say that right Jimmy great says I was against tiktok. I still am but I recently I found crazy if you search france on instagram You will get fancy good heart pictures But you type in france and tiktok. You will get the truth. Not sure what that means Zach, uh, do you have uh anything to add? No, I'd say let's spring peter into the conversation. Okay Here he is. All right. Yes peter von valkenberg and I apologize for Emphasizing your name and mispronouncing it. I'm sure from coin center. Thanks for joining the reason live stream Hey, nick. Hey, Zach really happy to be here and the pronunciation was on bass. It was a little heavily It's you know, it is a really kind of like uh operatic name a vagnarian name so, you know, I envy that but um, let's start with uh, you know, if you were listening in and particularly that ram paul clip and whatnot You know, the restrict act is supposed to ban tiktok, but it actually does Much more than that and tiktok in the great, you know, uh tradition of laws that are obviously Tailored to one thing but you know, uh, but have much broader application. It doesn't actually mention tiktok What does the restrict act do and what should we be worried about? Yeah, so it's a extremely broad law and you know There could be a good reason to not mention tiktok to be just transparently clear a law that specifically calls out a corporation And finds them guilty of a crime Or a person for that matter would be a bill of attaining or unconstitutional under our american system for other reasons Which that was senator holly's bill by the way And rand paul specifically called him out for that because holly's bill was targeting tiktok and it's illegal Exactly. So we don't have that infirmity with the restrict act But we have a a different one and in many ways a more dangerous one because rather than zeroing in on a specific corporation or company tiktok this bill is giving Basically unrestricted powers to the secretary of commerce To identify information technologies and transactions or holdings financial holdings related to those information technologies And simply say that americans are not allowed to make those transactions or have those holdings And there's very little process for how they make those determinations other than the fact that the information technology is Advantages to a foreign adversary. I guess in this case we're assuming it's china, but it could be anyone and There's no limitations or there's very few limitations with regard to Who can challenge or Rather, there are limitations as to who can challenge Designations once they're made by the secretary of commerce and we can get more into that It's particularly relevant to us at coin center where we're focused on cryptocurrency technologies Because we're actually fighting some of these sorts of battles with respect to an existing Statute for sanctioning or blocking transactions the international economic emergency powers act and the OFAC regime that comes from that Act of congress So, you know, one thing we've done is we look at the restrict act is compare and contrast Does this create new powers? Are we going to be fighting? treasuries OFAC designations as well as the secretary of commerce's restrict act designations And would it be more or less difficult to challenge secretary of commerce's designations under restrict Then it has been thus far for us to challenge OFAC designations when they go beyond the actual statutory authority Yeah, let's and let's get to that because the restrict act is really kind of applying an existing law against Various kinds of you know that effect crypto and other things to media But I just want to say, you know to me Part of what strikes me as insane about this. It's a twofold process. First you have congress Actually ceding so much power to the executive branch, you know, this is a long running problem I think within a reason-style libertarian analysis of government Sometime over the past 50 years and maybe maybe since andrew jackson congress has just stopped Actually doing what it's supposed to be doing and it's just offloading You know, it's it's outsourcing what it's supposed to be doing a fucking congress, which is nuts to begin with And then so there's that problem and then it's like the secretary of commerce There are probably 80% of the people in congress could not name who the commerce secretary is and you give them Massive broad powers. I mean the commerce secretary is to the you know to cabinet offices What Cornell is to the iv league, you know, it's it's a it's a secondary tertiary seller-dweller kind of cabinet level So it just seems nuts that you know, this this is what's in front of us I mean to be fair, there's some members of congress who aren't even aware that their own name is a cosponsor to the bill Yeah, no, I mean, but this this gets to this right where it's like You know congress no longer. I mean, they you know, they don't declare wars. They don't Do anything and like how do you how do you battle that when you're you know? When you're talking about the restrict act and earlier, you know existing laws That end up giving massive amounts of power to the administrative state essentially You know, how do you how do you start clawing back? It's really you know agency. It's really hard because as you said, this has been going on for a long time maybe since Andrew Jackson certainly since the Since the new deal and and Roosevelt's expansion of the executive powers They're in and you know, there's this public facing rationale for that that a lot of people have bought or Or sort of bought into for a long time now It goes all the way back to max vapor the sociologist Who said that as the subject of law the things that law needs to regulate become more complex and technological And he was probably thinking about I don't know steam engines and things like that But god knows it's gotten more complex That it will be inevitable that sort of citizen-run legislatures will have to give up their authority to a more technocratic bureaucratic class And so a lot of people I think that argument if they're not just sort of casually observers of the political process makes sense But there's something extremely insidious in that argument It's that we need to give up on elected representatives being capable of educating themselves sufficiently to actually control the things that matter most in society Like our information technologies and our engineering technologies And what you end up with then is where we are today where that atrophy has gotten so profound that congress Really just sort of writes blank checks all the time. They say oh tiktok's a problem Here's a blank check to the secretary of commerce to make sure that they can ban anything that they need to In their wisdom and their technical expertise about the internet that might be a threat to american interests And that is just an abdignation of congress's duty under the constitution which vests the sole legislative power in Congress not in the executive the bright spot here And I don't need to tell you nick or you zach what this is is that our courts have actually wised up to this And some of our justices like neil gorsuch especially are very keen to return that separation of powers with With you know important cases dealing with the major powers doctrine and the non-delegation doctrine of the constitution So that's how you challenge this you challenge it in court now Hopefully we don't have to bring a non-delegation challenge to the restrict act because hopefully it never passes into law But that's all a lot of hopefully's right Let's I want to look at some of the text here just to underline or highlight Exactly how big of a blank check this is to the executive branch the commerce secretary in particular The law says the secretary is authorized to and shall take action to identify deter Disrupt prevent prohibit investigate or otherwise mitigate All of these threats That the secretary determines poses an undue or unacceptable risk of sabotage or subversion That can include catastrophic effects on the security or resilience of the critical Infrastructure or digital economy of the united states, which we should talk about in a second here And otherwise poses an undue or unacceptable risk to the national security of the united states And then this one is the one that blew my mind if the secretary In his soul an unreviewable discretion Determines that such a referral would be in the interest of national security So they're not missing any words as to you know the kind of soul unreviewable authority of this one executive appointed official to Affect a a broad swath undefinable Swath of the economy Yeah, yeah, my favorite in in that is otherwise mitigate So congress is supposed to tell the agencies in the executive branch You know what the problem is and ideally with some specificity like regulation of the airwaves i.e We can't have interference between different parts of the broadband spectrum And then ideally supposed to direct them to how they're supposed to you know carefully wield their powers to enforce congress's will Otherwise mitigate is a completely unbridled phrase. I mean if you bomb a data center You might otherwise mitigate certain nasty effects coming out of that data center Surely that is not within the intended powers that congress seems to be giving here But if you just look at the plain language of the word otherwise mitigate includes all kinds of things that would be patently a violation of human rights or liberty or the rule of law And there's also that phrase You know the effects on the digital economy and you were mentioning, you know, you're from coin center You're concerned with the effects of legislation on the cryptocurrency The world cryptocurrency. I produced a documentary last year that i'm going to play a clip from in just a second about The tornado cash crackdown, which I know is is one of your your primary cases now And I want to just play a clip from that documentary to That'll I think briefly explain What's at stake here and then have you talk about The way that the restrict act expands upon the currently existing sanctions regime that is being used to choke Some innovative uses of cryptocurrency August 8th was different The u.s treasury department announced that it was adding tornado cash A tool for making cryptocurrency transactions anonymous to the u.s sanctions list Dutch authorities arrested a suspected developer of tornado cash Accusing him of facilitating laundering of billions of dollars of stolen funds Tornado cash is what's known as a coin mixer meaning it blends together multiple cryptocurrency transactions And then breaks them out again with the purpose of making it harder for sleuths to follow the payment trail It's a technique for protecting financial privacy and has been used to avoid detection by authoritarian governments So tornado cash is an ethereum based coin mixer What is what is the what is the government do? What is the status of that right now? What and what has the government done to throttle that? Yeah, so so at its heart tornado cash is 29 smart contracts on the ethereum blockchain Um and these smart contracts what they do is they allow someone who has cryptocurrency say on their phone They like hold it directly like you have cash in your wallet Move that into something that's like a a special security safe, right? And you get a little receipt when you move it into that safe And only you the person with the receipt can then take it back to that online safe and get it out of there Now if lots of people all put their money in the same safe But only ever retain control of their own particular deposit to that safe Then there can be privacy because we can't Unchain identify who put money in that corresponds to any particular withdrawal And this is very important because if we're going to actually build our entire digital economy on these new Distributed ledger technologies permissionless blockchains. We're going to need a measure of privacy Now to a lot of people, you know, especially maybe folks In government that sounds like i'm talking about like well We should enable people to launder money and things like that And let's be clear that privacy tools are going to be used by bad people to do bad things But privacy tools are also used by good people to do completely ordinary things So OFAC the office of financial asset control Which enforces us sanctions policy identified these core smart contracts and said Americans aren't allowed to use them anymore Why because we've seen our foreign enemies Allegedly north korean hackers in the lazarus group move money through these software contracts in order to hide them from investigators But they're not saying that the lazarus group is itself alone sanctioned They're actually saying these software contracts are sanctioned that the lazarus group has used Therefore, we're not just trying to stop the lazarus group from using them We're trying to stop ordinary americans from using them for their own privacy So coin center is challenging that designation along with some similarly situated Copaintiffs the reason coin center has status or standing to challenge that designation is because we've actually received donations to our 501c4 non-profit That have gone through tornado cash because someone wanted to politically associate with us Which is first amendment protected by making a donation But they wanted it done privately i.e. So that's some random person in the in the public Can't just see the ethereum transaction directly and know that this person's a supporter of coin center But we wanted to make sure we had copaintiffs because we don't want this to look like just a particular issue cryptocurrency advocacy And our copaintiffs are really interesting one of them's an ordinary american who gets paid on the ethereum blockchain as a software developer Because that's where his software actually runs That's where he does his work and all he wants is privacy over his paycheck not from the irs He's still obligated to self report his income just from like the guy in the next cubicle Who would otherwise be able to see it on the ethereum blockchain perfectly reasonable And then another one of our copaintiffs is somebody who's actually anonymous because and it'll make sense for For why in a second because what they've been doing using tornado cash is facilitating donations to the war effort in ukraine To defend against the russian aggression there and the reason why he's doing this using tornado cash Is because there's a very real fear that if you or people who you're working with are making donations to support ukraine's defense The gru will identify those transactions on the blockchain and target you for cyber attacks So these are completely legitimate indeed in many cases first amendment protected transactions money can be speech And yet these are now forbidden for americans to make even if they're made with no connection to a foreign adversary to a foreign government Because again if I take my money put in a tornado cash and take it out myself At no point have I paid anyone in north korea and the suggestion that I have is really just a lie Being propagated in order to further control. I think over software that we should all have the access to do you Go ahead Zach. Sorry. I was just gonna say this. So this is an example of using that kind of hop skip and jump to A foreign adversary use this technology Therefore anyone else who touched this technology we're going to use this sanctions regime to ban the technology itself So how does the restrict act build upon that idea and in your opinion worsen it? Right So this is all that we've been describing about tornado cash are sanctions that have been taken under the international emergency economic powers Act daipa which has been law for a long time. In fact it descends from the trading with the enemy act That statute is law and treasury enforces it the restrict act would create what we would call a parallel regime A whole nother system of blocking and sanctioning americans from using certain or making certain transactions and house it in the secretary Secretary of commerce's office one thing from a political angle that I think is is rather interesting Is how the financial services subcommittees in the house and the senate and the banking committee in the senate feel about this They had primary oversight over this very powerful tool to block transactions And now they're going to be sharing it with the commerce committees So this might be a good way to actually politically challenge the advancement of this legislation But that's or inside game politics and less actually substance of the law So there's some other issues with the restrict act that are that that bear repeating as you see coin centers already having at least some difficulty Challenging the tornado cash restrictions. I mean we're doing it. We're in court. We're in the 11th circuit We're down in florida and we think we have a good chance of winning now with the restrict act there's some things that are different probably because You know those who want this unbridled power to block technologies and transactions See that there are some limitations in OFAC and want to remove those limitations So that they truly can do this with impunity and with less chance of a civil liberties organization Like coin center knocking on their door and saying you can't do that So the big difference is and i'll just say them briefly so everyone can be on the same page Is that the restrict act unlike aipa for OFAC sanctions has no statutory carve out For transactions that are dealing primarily in protected speech activities aipa The president is allowed to block all kinds of transactions They can't block a transaction where all that's the subject of the transaction is like art from an artist in cuba being sold to an american In fact, there's case law about this and that would be a first amendment argument You could make you can't block these transactions because this is protected speech But in the context of aipa and OFAC unlike the restrict act you can make a statutory law argument You could say congress didn't even intend to give this power whether or not it's constitutional We don't have to reach that question So it's another avenue to challenge the statute without bringing the more serious and consequential Constitutional challenge you probably want to bring both But in the restrict act you can't bring a statutory challenge because there's no carve out for information Probably by design because they want to block a lot of information technologies and don't want this pesky limitation on which transactions can be censored Briefly the other ones that are simpler to explain. So i'll just lay them out. Yeah Um, there's no aipa challenges. It precludes almost all administrative procedure act challenges. So Unlike in the tornado cash case where we're arguing that the designations arbitrary and capricious under the administrative procedure act You could not necessarily make those claims Under the restrict act if you were challenging a designation there and then the third one that bears mentioning that's also quite quite important although a little odd Is with OFAC designations You can challenge them anywhere in the country wherever maybe you as a plaintiff happen to reside and is convenient to you We're challenging in the western district of florida because the guy who gets paid on ethereum and just wants privacy over his income That's where he does his work. That's where venue is convenient. And that's where we want to bring the challenge in that circuit With restrict act challenges. You are limited to the dc circuit Which means if you had a plaintiff in california They have to travel to dc for certain depositions and other things and also this is nakedly political The dc circuit is inherently more friendly towards administrative power and less Less likely to validate rule of law concerns. I would say so this is nakedly a way to Force discussion over challenges to a friendly judiciary rather than one that might be more skeptical Uh, can we put this both the existing laws and the restrict act of proposal Can we put it in a larger context about you know, the battle which is You know has always been going on in america between kind of the forces of centralization and decentralization There's a phenomenal book that was first published in 1955 by the political scientist and historian arthur e kerch The decline of american liberalism who said even before The the united states existed as a set of colonies the forces of centralization versus decentralization have been at war And you know, it's just you know, kind of each era is defined by whether we're more centralized or more decentralized In the 90s as the internet kind of rose to mass medium status through You know the the creation of the worldwide web There was a glorious kind of decentralization, you know And this is you know, when you read the early issues of wired End discussions about disintermediation where finally people would be freed Free to kind of communicate directly transact directly kind of get in touch without middlemen or Overseers and gatekeepers doing everything when you think back to people like john perry barlow of the electronic frontier foundation You know talking about the declaration of independence in cyberspace where he was kind of writing off, you know, these rotting hulks of of you know, lumbering Corporations and governments of the industrial age like you you mean nothing anymore since You know, maybe from like 95 to about 2005 there was decentralization. There's been a re-centralization And going back to you know, whether it is facebook and kind of trying to create a walled garden model or twitter All of the social media platforms, you know, try to keep you within their kind of confines They deprioritize things that link outside of them this type of thing You know, but in the teens and started, you know starting particularly with bitcoin You know this idea of a of a not just a stateless currency But one that would be harder to track harder to impose controls over, you know, it was self reinforcing We are now at a stage where you see people like jack dorsi the former CEO and co-founder of twitter pushing things like nostre, you know, a decentralized and distributed kind of social media messaging platform the rise of telegram signal WhatsApp all sorts of things even if they're somewhat centralized in some way they have intended encryption Can you put The restrict act and other conditions and particularly what seems to be a growing attempt to Essentially ban or prohibit Bitcoin and other types of cryptocurrency. Can you put it in that larger context? Are we seeing kind of is this the revenge of you know, is it is it the revenge of the empire Trying to stamp out all of these attempts at decentralization Or are we actually achieving escape velocity and going we won't be worrying about this because the technology will free us You know in a few years So putting in context I I agree complete with your characterization of these cycles of decentralization and centralization It was growing up in the end of the 90s and deciding what I wanted to do with my life That made me so excited about going to law school, you know, weirdly enough It was I want to be like john parry, but he was a hero of mine I want to fight that fight and then things changed right and now now we're in the situation your your listeners will Almost certainly be familiar with bruce yandall's concept of the bootleggers and the baptists, right? So this is an idea in public choice theory or political theory wherein when congress or some policymaker wants to pass a law They might have two people whispering in their ear. They'll have the baptists who say alcohol is really bad It breaks families apart and this is all true. So you should pass this law for that reason prohibition But you also have the bootleggers who say wouldn't it be great If alcohol was illegal because then our criminal enterprise of transporting alcohol across state borders will just boom And the reality is a lot of the money that goes into supporting these efforts is coming from the cynical side that just wants to get richer And they have a public facing face for why it's a good idea And this is I think a prime example of this because i'm quite sure that most of the political will behind the restrict act Is not actually interested in banning decentralized technologies They're interested in banning tiktok Possibly having greater control over facebook or the other centralized giants that even john parley perry barlow probably would have thought We're kind of a nasty evolution of the internet But what will this broad law actually be used for? I think it will be used to bring the hammer down on decentralized technologies So in a certain sense the bootlegger here might be the giant tech corporations who want their monopolies protected Against foreign big tech companies, but more insidiously against decentralized technologies And what's the baptist here the public face? Oh, it's that tiktok's bad It's not that we're actually going to use this law to to to to block open source software Although it could be used to block both and I carry very little water for tiktok because I agree The internet was better when it was all protocols when you were using your own, you know, http to write a blog you were using smtp to send an email and that's what bitcoin and open protocols Like ethereum and such are there to do is to return us to that that better world where we're just more equals online Rather than all subject to someone's walled garden I will uh suggest I mean I I agree with you completely and and Maybe in a certain way you the utopian outcome is where you have both walled gardens and Distributed protocols or our protocols that allow for you know distributed Enterprises to kind of live and you know, there is something nice about being able to go to one place and have a big audience I before we go to I would also add that power laws are immutable So there's a certain amount of decentralization and recentralization that will always occur and the importance is to keep dynamism in the economy I don't mean to go on ice big tech But we need to keep the cycle moving and if we use a power like the restrict tech to stop the cycle and say We're just going to stay centralized now, but american centralized not chinese centralized and That's and we've seen this happen in various ways and and virtually in every major industry Sector over time, you know the automakers did it uber and lyft to a degree did this where the you know They disrupted cab companies which were state-granted monopolies everywhere state license and regulated and the minute they got a really good market share They would go to state legislators or city councils and say hey, you know what? We need we agree with you We need to restrict or we need to regulate things better to make sure nobody gets hurt And it would just happen to freeze them at a point in the market cycle where they were at the You know, they were at the top of the pyramid I just wanted to say before we go to zack Yeah, for people interested in a fantastic insanely libertarian movie about baptist bootlegger Coalitions legends of the fall from the 90 Which is by edwards wick and it has anthony hopkins and brad pit in it julia binosh. I believe It is it's it is this insanely libertarian movie which takes place during Prohibition and a minor spoiler alert. It ends with a congressman shooting Revenuers who are coming who are working for bootleggers, etc But it's it's it's a fascinating concept and legends of the fall is a pretty good movie on that score zack I wanted to raise another kind of big picture question here, which is It's related to the centralization Question and you kind of mentioned the difference between american style centralization and china style centralization And that is what something like the restrict act is trying to cope with it. It feels like We're and it goes beyond social media companies It's really about what is the future of us china relations and and what do you do when you have an open system? interacting with a closed system because As we mentioned earlier with taylor lorenz china doesn't allow tiktok The the the more freewheeling algorithm to run in its country We allow it here rand paul made the point in his speech that well, we don't want to emulate the chinese system You know, we don't want to be china and banning things but if you for people who are concerned about tiktok in particular Or big tech more broadly What are some better solutions to deal with that problem of a possibly Either a malevolent actor or just one that doesn't have your best interests in mind and is You know hoovering up data all the time and using it in ways that you don't want it to be used Are there, you know good non state solutions for that or or even state solutions that don't involve Passing a bill that is, you know, extremely broad concentrates all its power in One executive agency and is almost impossible to challenge unless you can get to the subrime court or something Yeah, I mean ideally we would have emergent bottom-up solutions Maybe market solutions even more interesting maybe like mutualism type solutions where people just Build communities online together and are able to actually sort of set their own rules I think that's the kind of thing that a john perry barlow who is a cattle rancher for a long time would like You know, he's probably concerned about what his kids are seeing on social media But wouldn't it be great then if he was able to be part of a larger community that sort of was the walled garden They they are the walled garden They set the rules for content in their neighborhood and then they can have strong norms about how kids You know, you know should should be on this social network rather than another the tools for building those decentralized social networks Those ones that are actually bottom-up and emergent and reflect the values of the community rather than the values of someone in silicon valley or in shanghai Or more likely a Beijing actually, you know, those tools are things like ethereum like bitcoin Cryptocurrencies this gets back to what nick was saying about jack dorsi at twitter You know the guy who invented one of these big platforms that exercises a tremendous amount of Editorial control over what's healthy for people to read or unhealthy for people to read which is a very subjective designation He himself is sort of I suppose you could see it almost as a mea culpa I you know, I thought this was the right way to build at the time And maybe it was the only way to build it at the time because it was before bitcoin really Um, but now I think that there's better ways to build these things And that's why I think he is supporting efforts like noster or blue sky. There's a whole bunch of these projects they're in their infancy though and they're very readily susceptible to being sort of strangled in the cradle if you will by somebody who actually Secretly really does like the power that a few centralized intermediaries provide them to shape the message for americans So that's that's what's going on right now. Can I ask the follow-up? you know in this In this vein a couple of months ago at the atlas network, which is a Think tank that funds think tanks mostly in the developing world And kind of pushing back against authoritarian governments, you know, it's freedom of speech rule of law free markets and things like that I interviewed alex gladstein of the human rights foundation who's you know, a great bitcoin and crypto evangelist and he was saying that You know it it was hard for people to remember how to use email or to remember their their passwords, you know, 25 30 years ago Um, it's not going to be it shouldn't if people can do that They can remember their crypto keys, etc. I mean part of what's It seems to be part of the stumbling block of the Adoption of a lot of these new Redecentralized disintermediate protocols and whatnot is that it is Pretty confusing. It's pretty difficult and it's daunting Two people and I say that as somebody I always try to do early adoption But you know noster zack had to help me set up my account there I'm on mastodon which I always call mammoth because I'm becoming an old man And I think I like mammoths better than mastodons, but like it's kind of fucking difficult and you know a couple years ago reason minted a nft that we sold of myself and my colleagues on the reason round table podcast And it was like really difficult to just put a bit in on on a open sea for this for this nft Is the how how much easier does it need to become? for people to use these new emerging technologies for them to to adapt and is that Is that onus really on the developers of this stuff or is it on the rest of us to kind of up our game and learn how to you know, I I guess a metaphor of this is In the 80s when I was younger and I didn't have money and my time was literally worth less than it is now I would do my own tune-ups oftentimes fucking up my car, but like I would replace the spark plugs I would do this I would do that when you open a car up now Yeah, there are very few parts that anybody other than a you know A really certified mechanic who works in a shop with a lot of computer technology and specialized things can do I mean like What what has to happen to make bitcoin to make crypto? to make distributed, uh, you know sensor Proof kind of communications more likely to become robust. Yeah, I mean I'd love to I'd love to blame policy makers for this, but I can't I can only blame our space This technology is very advanced and very, you know complex And so its evolution is I think inherently slow on some level, you know in the in the car repair context You can actually blame policy makers in many cases because they enforce copyright laws and other intellectual property laws that actually prevent you from being able to even Log into the computer that's in your car. So unless you're an authorized repair I mean, is it still technically is it still technically a felony a federal crime to decrypt a dvd Yeah, yeah, you know, I mean just to rip one. So it's like, yeah, I mean there's definitely laws that are against this The anti-circumvention provisions of the dm's dcma. Um, so look We have some issues with legal lack of clarity that has perhaps stymied and slowed the development of this technology I'm not trying to minimize those Um, but the real problem is as you said that the technology is still difficult to use and I often I often have this thought Of the sort of different type of dystopian outcomes that we fear and I grew up thinking I was a sort of 1984 guy like we're gonna have big brother. We're gonna have one world government or You know, atlantic versus oceano, whatever it is in the book And we're not going to be allowed to use technologies that we would otherwise willingly choose to use that protect our autonomy and our privacy And turns out that we don't really have So much of a big brother problem not here in the us yet unless things like the restrict act end up the norm Have this problem in china. We have a brave new world problem which is The centralized services that collect all our information report our financial transactions under the bsa or other mass surveillance statutes Are so much nicer and pleasant to use that we're sort of Um willingly able to and interested in taking that drug because it's it's like soma in in huck huck sleaze brave new world It just makes us feel cozy and comfortable even though in the long run It probably erodes our mental health as we're seeing with a lot of centralized social media And ultimately causes us to become docile and subservient and willing to accept authoritarian rule and that's terrifying because This means you can't just say try harder everyone Use the product that's terrible because it protects your autonomy and privacy Even though it's much harder to use and so the onus really is on technology technologists software developers in our space to make these new systems not just able to protect privacy and autonomy But also 10 times more pleasant and easier to use than the current centralized alternatives And I am optimistic that we are finally getting to that You know back when I started at coin center in 2014 It wasn't long after that that mark endreason from endreason horowitz wrote his now somewhat infamous We are in the 1998 of the internet for crypto, which meant we were a couple years away from mainstream A truly mainstream usage of crypto that's turned out not to be right Just to give your listeners who are not familiar with crypto a sort of justification is why it's been harder than expected There's two big Technological roadblocks that we're only now seeing really serious Efforts to solve one is scale if you have a global ledger of everything that everyone has done It is incredibly heavy duty as far as the amount of data that needs to be verified and shared amongst everyone So we can all trust that data It's much easier if you just have a centralized database to do that With layer two networks built on top of ethereum of which there are several competitors and brand new layer one networks That could be an alternative to bitcoin and ethereum. We're finally solving those problems by basically being able to compress Millions of transactions that deal with little personal interactions Into smaller like single transactions or smaller amounts that then we can still have the same validity Everyone can still check that their particular transaction is valid But we didn't all have to have the same amount of data to verify everything So that's the sort of scaling solutions and some of them deal with zero knowledge proofs That can also preserve privacy in the process which is interesting because public ledgers like bitcoin can be bad for privacy And some of them have to do with other cryptographic constructs like optimistic settlement and things like this The other half is what you were saying earlier holding a private key is not that much easier In fact, it's a little harder even than remembering a password And that's a real problem if the way you're going to interact with these systems is sort of raw and on the edge as a user Of an open source software system rather than a customer of a company You're going to have to be really serious about data security And most americans aren't and so if you tell them you lose your password to this service because it's not a company It's a network you're out of luck. They can't change it. Oh and can change it That's that makes the service much worse as far as usability even though it's what makes it good as far as personal autonomy There's some really interesting advances in self sovereign identity in account abstraction is the term for it that can make it so that maybe you could set up a system where You are recognized as you on the network because 50 of your closest friends Continue to you know in a random in a in a regular way A test that you are still you and you if you lose your phone or the way you are currently connecting to the network Five of those 50 friends could co-sign to say this is your new phone This is actually a really good bottom-up community focused solution That's a sort of like the way americans have always done things is by having strong Local communities so that we don't need to rely on a sovereign or a central authority to do the things we want to do in our lives Building those sort of multi-sig multi-signature many people all coming together to prove some fact about a person Building those systems has been hard But I think they're on the horizon and that combined with the ability to scale the global networks will mean that we'll find We have better tech that's sort of a long dissertation on why I think we're about to overcome some of these problems But the the bigger answer to your original question is we need to overcome those problems because you can't Convince people to take their privacy seriously You have to show them a tool that allows them to take it seriously But it's easier to use than the existing tool that was exploitative of their information You know in the in the short term before Uh, we get to that wonderful world where these things are turnkey you know if we are stumbling towards brave new world and basically the choices are going to be you take The american government's soma or the chinese government's soma Or you figure out some way not to take it at all and you know live a freer life What what practical steps? Uh Because I do agree with you that there does it does seem like The agenda the bipartisan agenda at this point seems to be well We can't allow It's the the dan krenshaw argument We can't allow this digital opium from overseas into our country We just need to have our own safer supply of it that we control uh in this country And it doesn't and it's not just about social media. I mean I I pulled another screenshot from the law here This is these are some of the this is some of the infrastructure that can be affected by the restrict act wireless local area networks mobile networks satellite Payloads wireless access point edge computer platforms cloud-based computer storage machine learning predictive analytics You know a the whole ai they're trying to kind of get ahead of ai I think Set up a regulatory framework for that Managed service content delivery services. So this is it's hard to see it as anything other than a power grab So given that we're in that world What are some practical steps the individual consumer someone who's not Super technical who's not a crypto nerd can do to kind of protect themselves against that Protect themselves against the restrict act Not against the restrict act but against the kind of ever more aggressive Just like hoovering up all your data Or kind of foisting Very curated dumps of information on you I mean get off social media You know Hi my wife and I were remarking earlier today about how our parents are on Facebook But we're not anymore and they've got this like interesting closed loop now to actually talk about us Like that for my health That's not a very satisfying answer to your question. I'm sure but you know like experiment with new tools Find tools that reflect your values Again, I I'm not too optimistic that the majority of americans will be interested in doing that because those tools are Still very difficult to use but that's the ultimate goal And then from a policymaker perspective, you know, what I'd say is you're right to be worried about this But the american response to these big You know intermediaries that control the narrative and effectively have a degree of mind control over their users Is not to lock it down. That's that's the north korean approach This is what we've said in our tornado cash lawsuit You know the tornado cash lawsuit is triggered in some ways by allegedly north korean hackers using this software to Wander ransomware payments The solution to that is not to become north korea The solution to that is to let let good information outcompete bad information rather than saying that we're gonna like have a centralized authority for what information americans are Have access to or or can control And so Unfortunately, we just have to be patient We have to be patient for these more decentralized solutions to become readily available and popular and and used And the worst thing we could do is rather than being patient for those alternatives to percolate up Say give congress or or rather the executive unbridled authority to block those new technologies Because they'll probably end up using those blocking powers to block open source software That is the answer to these problems rather than just using them or or using them to to block big corporations That are that are abusing our data or collaborating with governments to abuse our data Uh, let's just I just want to go through to a couple of questions or comments and they seem to be mostly comments Jill Ellswick writes that schools don't teach media literacy because it makes people confront the topic of their own biases And no one enjoys that Christopher mizliki mizliki says in canada Our government is trying to push Through via a coalition of other parties a bill to censor our internet in the name of curbing misinformation, etc U.s citizens need to oppose outright s r 1 0 3 4 says could gov use tornado cash also and swap question for uh, peter Yeah, let's and let me just run through the last thing the the bill can limit The restrict act can limit freedom of speech for all american citizens. It's crazy, but let's and that was from s v o k xz I feel like i'm in anthem by ein rand at this point But to go back to s r 1 0 3 4 Uh question could gov use tornado cash also Yeah, we know that the korean government north korean government has right So, you know, it's interesting. Uh, it's not as crazy a question as it might seem Tor, which is a mixing network for internet packets was developed by naval signals intelligence because and and was later Used extensively by the the foreign intelligence service as a way of protecting agents in the field who need to communicate back over the internet to their authorities and Langley or wherever they happen to be And interestingly, you'd think okay Well, why didn't they just lock down tor and make it a tool exclusively for the u.s government? Right And why would you want your enemies to have that tool or just ordinary americans who are trying to do weird things to Have that tool and the answer is the tool only works if everyone uses it This is the kind of amazing public good nature of privacy if you have this Um, it was that that great old, uh show get smart where the cone of silence would come down over beautiful Yeah, and the portable cone of silence that they could put like bubbles. It was like habit trail To the funny thing is there's only two people in the cone of silence You know those two people are talking and this is the same in tor if the only people who use tor in iran are cia agents You can still identify tor traffic And if you're the iranian authorities you go and you arrest those people who are using tor because you know They're cia agents if on the other hand all kinds of people Iranians americans cia agents non cia agents are using the same tech. You can no longer identify the traffic You have to assume that some of these people might be people you want to protect and some of these people might be people You don't like but you think all right. Well privacy is just worth it So we'll let the whole thing go and so that's what naval signals intelligence did they said we're going to open source Tor everyone should be able to use it Tornado cash should be the same Ideally if we need to make payments to agents in the field Peer-to-peer cryptocurrency networks are the best way to do it bitcoin's not a great way to do it though At least not in its native form because that traffic is immediately Identifiable and if you can use clustering analysis to identify that these are the cia Addresses and these are the agent addresses, then that's the end You get a prediction just like you do in the correspondent banking system Um or or or in regular financial systems and so they probably should use this technology Maybe they have I don't know but this is another reason to preserve it because it actually Strengthens in many ways our cyber security and national security Interests because we're the country that's antifragile that can survive an unbridled information landscape China can't the more those people in that country wake up to what the communist party is doing to them The more they're going to resist and the harder it is the more expensive it is to maintain that regime And so, you know, we should be all for open technologies And we should be all for technologies that allow individuals to privately talk to each other because America is not afraid of people talking about its government That is, uh, you know, uh, it's a fascinating point to make and I I'm going to ask you What is the role of ideology? So, you know more than technology and kind of winning these sorts of battles to you know, keep the internet open You know, which I know it's kind of like the equivalent of keeping austin weird or something like that Um, because it is it's it seems to me we no longer As americans and the internet in a very profound way and I don't mean that america owns the internet But the the best part of america as a kind of ideological experiment or an aspiration Really did help structure the internet and everything that goes with that in terms of things like open source And things like people being able to use anonymous speech, uh, you know, it's hard To remember, uh, but you know these this history, which is not ancient history, but it's totally forgotten Aol, which you know is a joke now one of the one of the selling propositions of aol besides ease of use and ubiquity Uh, you know, it was a local call to to call dial into the aol network Whereas other place the other uh internet service providers You know, it might be a toll call or a long distance call It costs real money, but aol was anonymous you could choose to be very anonymous And they were actually very good at like resisting attempts to uh, you know, kind of name or docs their users even when You know law enforcement came Calling but how much of it is recapturing? You know that american tradition of anonymous speech we in a in a profound way america is a country founded on anonymous speech And privacy that goes along with that You know, what what do we do to kind of build out the ideological case for lack of a better word that openness is better than mass surveillance I mean, this is why I love my job at coin center Because our mission is to defend the freedom to innovate using these technologies To make it clear that if you're a software developer and you're an american software developer and you believe in building the right systems That we've got your back and we've got your back ideologically because you might think this is just a good tool And that's your prime motivation for doing it But also what you're doing publishing code on the internet is a constitutionally protected activity And so prior restraint on that in this country is not allowed in canada It might be more easily restricted in china It could be very easily restricted and so that ideology and also just the base constitutional law of our system Is extremely important You know the other thing I wanted to briefly mention too because it's sort of it flows into this is cbdc's central banks and currencies which in many ways have become a sort of bogeyman a bogeyman In the crypto community because we're afraid that this is going to be like a top-down surveillance effort to Get people to use this a us digital us dollar instead of bitcoin and then actually capture all that information And that is a very accurate description of how china is implementing cbdc's with their their ecny program They're cutting the banks the private private state-owned banks out of the information loop and the informations of individual atomistic transactions Are going straight to the government and the surveillance apparatus in the u.s. Though it doesn't have to be that way I think it would be very good and even and I might be You know ruffling ruffling some feathers in the cryptocurrency community I think be very good for there to be a digital dollar that embodies american principles That is a bearer instrument like a hundred dollar bill in your pocket is and that is private like a hundred dollar bill in your pocket and that could be Government issued with the support of the private sector probably private sector technology providers and it could be as private as cash And this is something where actually we might find sort of the horseshoe of politics Gending together on the left and the right because the left is often very concerned about privacy and private payments And also wants money as a public good And the right is also very concerned about privacy and private payments And so maybe you could get some marriage here and I tell you this if the u.s. Issued a digital dollar And it was as private as cash and as autonomy protecting as cash like once I get it from the government I can give it to anyone and no one's the wiser And no one can stop me that will immediately Dollarize the entire internet to the extent it is why would why would the u.s. Government do that though? Because it seems I mean when there is a global Attack on cash the only reason that you use cash is for illegal purposes right criminal behavior is the only use case I mean this you hear Increasingly and you know the percentage of Transactions that are actually in cash continues to shrink and shrink. Why would the government? Why would the u.s. Government actually issue a central bank digital currency that it could not trace And turn on and off or or penalize the the bearer of that so the the the optimistic or the baptist answer Is because it's ideological it embodies American principles of freedom and privacy The bootleger answer is because it increases american hegemony for the next century If the u.s. Dollar is used globally And the only and the way we can bootstrap that is because people really want to have private and anonymous transactions with the dollar Then that that does so much more to improve our national security and our geopolitical positioning for the especially at a time Where it does look like the dollar, you know the old school the you know 20th century dollar may be starting to you know the challenges to it as the Reserve currency are growing Are there any people I follow up one question on the cbc angle though because What would you be looking for in that? You're in addition to being affiliated with coin center. You're also on the board with z-cash Which is a privacy centered coin uses technology called called zero knowledge proofs that that you talked about earlier Is that the kind of technology that you would be looking to be integrated into a private cbdc? In order to be able to trust that there's no backdoor 100 percent. Yeah, okay There's there's an interesting thing. So so i'm at the z-cash foundation. I'm on the board of directors There's also a company called the electronic coin company that develops that software And there's a bunch of third party developers and this is why it's not Centralized and why you can you don't have to trust one of us You don't have to trust me when you use z-cash It's just software that we all work together to publish to appear to appear network and anyone can audit that software and run it Now there's two things about bitcoin or about z-cash and specifically that are interesting You know one is the monetary function. There's only ever going to be 21 million bitcoins It's actually the same in z-cash. There's only ever going to be 21 million units of z-cash The other is the peer-to-peer transfer function and the privacy they're in bitcoin doesn't have much privacy Because everything ends up on a public ledger with z-cash There's these cryptographic constructs called zero knowledge proofs So if we don't have to go into that allow anyone to look at the ledger and say I know the money that just ended up in my wallet was not double spent It's not counterfeit, but I don't actually know who it came from It's a it's a zero knowledge proof It proves one thing about a transaction that it's not counterfeit Doesn't prove all sorts of other details that people might want to keep private Now if you were going to build a government issued But actually bearer instrument like fully private digital currency The part of those two technological constructs you change is who can issue You wouldn't make it a Finite amount because in theory you still want to maintain monetary policy for the issuer The ability to make more or make less and that that opens up a whole another economic question But this is the dollar. This is not digital gold. This is the dollar So you loosen the technical constraints there the minting function is provided by a centralized entity the us treasury or the federal reserve But the peer-to-peer transfer and the zero knowledge proof functionality Is still verified in public and still As with zcash does not reveal additional information about transactions such that I can't see your transactions nick tizak But also the mint that actually created these digital dollars also can't see them There are ways sort of like odyssey is binding himself to the mast For someone in that position of power with respect to the us dollar to actually credibly do it not just in law But in technology using these peer-to-peer networks So we would it mass political will to ever do it and I know I sound like I have two heads to some people now No, no, well, I was going to ask are there any politicians You know elected or otherwise that are actually talking about this kind of stuff because It really does seem and like certainly when you look at the restrict act Hearings or the tick tock hearings and the facebook hearings before that and the 2018 You know kind of tech sector hearings politicians You know a don't know what the fuck they're talking about but secondly are really trying to Lock everything down like nobody seems to be saying, you know what we need is An open-ended Kind of set of protocols that would actually be in line with the american experiment And would happen to have a knockout effect of keeping america as if not the essential nation a central kind of Crucible of meaning and decision-making and policy, you know going into the 21st century So there are uh and interestingly there are on both sides of the aisle So there was a there was actually a bill that was floated. I think in the 2020 congress called the e-cash act That directed the secretary of treasury to develop a pilot digital dollar that would be bearer and private Interestingly, this was actually put forward by representative lynch From massachusetts So this is on on the democrat side And then on the republican side You have a number of champions for private digital cash Who want to create a sensible regime for stablecoins which are privately issued But if they were one-to-one redeemable, especially if maybe there was some some actual law that backed that redemption power Would would once again be something like a something as good as a dollar something that's digital and and trustworthy and these are There are many folks Congressman mchenry, who's the chair of house financial services now congressman emmer who's the the majority whip in in in the house We had a great senator unfortunately senator to me who's who's retired Was a great advocate for this stuff in the senate And and hopefully someone comes up and fills his his big shoes, but and there's a number of folks That I that I think are are on board This is again, maybe an area where you could bend the horseshoe and find right weird, but you know Keep keep crypto weird coalitions that Both people care about privacy. Both people care about american values. Maybe we could do something with a digital dollar I love uh zach is going to ask you a final question, but I just want to say I love The idea of wrapping, you know, and it's kind of jingoistic on a certain level But I think it's accurate and it's actually What the planet needs certainly what america needs to you know, wrap bitcoin to wrap privacy to wrap financial security in you know in the american flag because We as a nation we have clearly lost a sense of identity and a sense of purpose and a sense of common belief And I think what you're talking about might be A powerful way to get us, you know, I I have this theory that we're in we're trapped in the long 20th century and we are Struggling to maintain these kind of zombie belief systems these zombie coalitions These zombie political parties that no longer speak haven't spoken to how people actually live for 20 30 Maybe 40 years, but it's really hard to kind of you know Crack that shell and just molt and get rid of them and move into the 21st century But maybe this rhetorical and ideological angle will help, uh, you know Re-formulate american politics so that we can get on with the future rather than having these idiotic battles with the past I also appreciate you Yeah, I appreciate the the optimism because often there's a sort of Dumerism and cynicism within Both kind of some strains of libertarianism and also just crypto world more broadly So I do appreciate that and I think that One of the reasons for the pessimism at the moment is the What seems to be a concerted effort to crack down on cryptocurrency post the ftx meltdown We've talked with nick carter who's called it operation choke point 2.0 Where there seems to be this ongoing effort to Make it harder and harder to switch in between, uh, bitcoin or other cryptocurrencies and cash mostly other cryptocurrencies actually and uh, I wonder if you are worried about this is and this is this will be my final question Are you worried about? That effort that do you agree that it's an ongoing effort? Are you Worried about the trends as someone who who has a lot on his plate fighting the government already? and uh, do you think that? crypto Will prevail some crypto will prevail or um, is it kind of in trouble? so at the end of the day, I think this technology is unstoppable and Um, and I think that's a good thing, you know, that might be scary to some people But I think that's actually very good, especially given the fact that we have other technologies like generative ai that are extraordinarily powerful and need technological limitations because government limitations are going to often be Uncapable of actually addressing the threat You know the the best answer to anyone can impersonate you online Convincingly is our we need self sovereign identity And so in many ways the best answer to threats posed by Generative ai are cryptocurrencies and blockchains where people can be sovereign over their own identity and their money um, as I said, I think it's unstoppable, but I don't think that means that The transition to a more decentralized internet and a more decentralized financial system will be peaceful um And just like we saw in the early days of the internet with people having SWAT teams break into their houses because they were running a server That's happening now and that will continue to happen now. Uh, and so Coincenter's mission can really be understood as harm harm mitigation or minimization Like can we find common ground between policymakers and technologists such that we don't have bad laws passed out of ignorance? We don't have people sort of a culture rated in in a policymaking environment where they think that this is all scams and frauds And god knows our space the technology space doesn't always make that job easy actually because there are a lot of frauds in this space That's sort of they're just naked same old schemes as always Ponzi schemes or or just now you uh, you can say f tx You don't have to uh code The x terra loona hell i'll call them all out because yeah make my job hard At the end of the day, it's just it's just up to us to say Uh do a better job with education Explaining the difference between a decentralized exchange where people hold their own money And a centralized exchange where they're still trusting some guy with more curly hair than I have to not you know, misspend it and On the other hand, um, you know When the hammer comes down hard in response to the frauds and the scams and we've failed to educate To make sure that we can defend people's constitutional rights the constitution Is this amazing forcing function in america? Of course policymakers are going to be Responsive to the biggest crisis at the at the given moment where there is a crisis Of course, they're going to reach for blunt instruments to attack things that are perceived as real social ills whether they're tiktok or ftx The constitution is there to say we need to take a long view There are certain things that transcend the crisis of the moment and those things are speech and privacy The first and fourth amendments and so i'm incredibly privileged to be in a position where you know Some people will listen to me and I can fight for those rights I you know, I want to thank you for you know, not just appearing here But the work that you're doing at coin center because like you and I think a lot of People who remember the 90s certainly and and we're kind of early adopters of digital culture Um, you know, there is a sense of technological Optimism in the sense that you know the better technologies the things that liberate and decentralize and empower people Do win out but it you know, you want to shorten the the war period I mean the the printing press was a phenomenal technology, but it took you know 400 500 years maybe before Everybody got comfortable with like the idea that you could you know print lady chatterleys lover in america and a lot of people We're literally jailed or burned at the stake For printing the wrong thing and like if we can shrink 400 years of you know Fighting over you know what we now recognize as a basic freedom down to you know Five months or five years or something like that would be all the better We're going to leave it here. Uh, peter von valkenberg of coin center. Thank you so much for talking with us Uh, this has been the reason live stream. Zach wise miller. Thank you so much. And uh, we'll see everybody next thursday. Thanks so much