 So are you into cryptocurrencies? Yeah. Bitcoin or Ethereum? Bitcoin. Oh, me too. Bitcoin Core or Bitcoin Cash? Bitcoin Core. Oh, me too. Bitcoin Core pre-segwit or post-segwit? Bitcoin Core, post-segwit. Oh, me too. Bitcoin Core, post-segwit with Tafford? Oh, yeah. Bitcoin Core, post-segwit with Tafford. Me too. Not's Implementation or Bitcoin D? Not's Implementation. Die, heretic. A Bitcoin through the lens of exit versus voice. Exit versus voice is an iconic talk that Balaji Srinivasan gave in 2013. We'll link that in the description of the show. It described the power and necessity of being able to impact the system from within or, alternatively, the freedom to abandon systems which we cannot impact from within. If you like the ability to exit, chances are good you also have no voice because without the ability to exit there is no or else that allows you to withdraw your consent from the system. In the past, we've discussed how the money we use is very much a slave to the same dynamic. The inability to move out of a fiat system, lacking Bitcoin means you have little hope of a dysfunctional fiat system changing because there is no alternative. So how do things change when we actually have an alternative? My name is Andreas Samantanopoulos and this is Speaking of Bitcoin. I'm joined as always by the other hosts of Speaking of Bitcoin, Dr. Stephanie Murphy. Hi. And Jonathan Mohan. Hey, hey. Adam is out this week. So the way I think of voice and exit, I don't know exactly where I first heard of it. This talk, even though as cool as it was, was not the first time that this idea was introduced. I've actually heard it not as exit versus voice, but as voice and exit. And I believe I've even heard of an event called like the voice and exit conference or something like this. Maybe that's where I heard of it. But as far as I understood it, the idea is that this is how you make sure that your boundaries and your human rights and your autonomy and all the things that are sacred and important to us as human beings are kept intact and are not trampled on. Because if you can't leave a situation, all of a sudden you're a captive audience. And we know what happens when someone has a captive audience. We see this with boring teachers right at school who kids are forced to listen to them. They can't leave the classroom or they get in trouble and the teacher can be as boring as they want and never take any feedback because they don't have to improve. Their customer is not that kid. They're not accountable to anyone basically. And it gets worse and worse. If you think about an abusive relationship, for example, like on a personal level, if you're married to someone and you're legally bound to them and they're abusing you, yes, you can leave, but not in every country in the world. In some countries, it's very difficult or impossible to get divorced, right? Even if there is spousal abuse going on. In some cases, people don't consider what's happening to you abuse, even though, you know, in other places in the world, they would consider it. So, you know, if someone has a captive audience, they can get away with treating you worse. And the same thing with governments. I think we've posed the question on the show before, do we have an abusive relationship with government? And I could say you certainly have a captive audience when it comes to governments because there's a lot of people who aren't even elected, they're appointed. And in some cases, they're appointed to positions for life. And they end up making the rules that really affect everyone else's lives. I mean, look at just what's happening with COVID. A lot of the people making these rules are appointed. They're not elected and they're making rules that affect everyone's lives that we have to follow. And so you can say that they have a captive audience and they're not really accountable to anyone. And so if you're not able to leave a situation, you could say, okay, well, you should at least have some say in how you're treated and what the rules are and what rights you have, I guess. If you can't leave a system, then you should at least be able to kind of change it to make it better for you. But if you can't change a system, it's basically like you have no leverage. And it's the same thing as having a captive audience. So I just think of these as basic human rights kind of stuff. And basic things that keep people's boundaries and their autonomy and their personhood intact. Well, the Apologist Shruna Vasanit's particular talk started with voice, meaning that you start working within the system that you are in and you attempt to change it from within by using your voice and whatever political power you have. And exit becomes necessary only when you no longer have the power of voice. But at the same time, if exit is never possible, then that also means that your voice isn't powerful. So the simple ability to exit makes your voice within the system stronger because if you have an alternative, you can speak more forcefully when you're trying to work within the system. The trite kind of slogan that you often hear, which is similar, which is there are three elements of political power, the soap box, the ballot box, the ammo box, right? I thought it was four because the jury box is in there too or something. Okay, well, we can add more boxes. But I'd rather have the jury box than the ammo box. But yeah, it's the same general idea, right? Which is that if you are constrained from exercising your power in participatory, cooperative ways within the institutions of power that already exist, then you go outside those either by leaving or by breaking down those institutions of power. And so that's why I think, in fact, one of the classic characteristics or even caricatures of an authoritarian system is a country or environment in which the citizens or residents are not allowed to leave, where the wall is built not to keep the outsiders outside, but to keep everyone trapped inside. That was the essence of the Iron Curtain in Eastern Europe. Oh, Andreas, I thought we weren't going to bring up Australia today. Yeah, I was just thinking of that. Well, Australia is a great example because they have no Bill of Rights. They have no Second Amendment. They have none of that stuff. And look what's happening right now. People are imprisoned inside their homes. And the same example with the caricature of authoritarianism North Korea. Again, if you want to describe the most extreme authoritarian environment, you talk about an environment in which not only can you not leave, but anything you do has consequences not only to you, but to your family and onto the third generation. The inability to leave, the inability to exit is a critical issue. I remember the first time I traveled to a country where passport control exists at the exits of the airport. So normally when you enter a country, obviously, you arrive on the plane and you deplane, and then you go through passport control and immigration. You have to go through passport control to enter the country. But one of the characteristics of most free countries is that if you get on a plane to leave, there really isn't passport control. They can't stop you from leaving. And that's certainly being true of many of the countries I've lived in, which I would consider to be free or at least free to leave. And then I went to quite a few countries in which upon leaving, you have to go through border controls and they can prevent their own citizens from leaving. To me, that's the ultimate lack of freedom. And that's why it's such a characteristic and almost caricature-ish characteristic of authoritarianism. But also the concept of exit and voice or voice and exit don't just apply to the extremes. They apply in very normal and routine ways that we may not even see it. So a lot of people talk about monopolies as a function of the free market that needs to be air quote reigned in. But when you look at coercion applied to the ability to exit, most monopolies only exist because there are straight, state-based structures that maintain the cohesion of that goliath. So you have intellectual property rights and all these things that do not exist but for the state enforcing it, that otherwise the thing itself would have broke apart. And so one of the things that I like so much about Bitcoin was it validated many of the beliefs I have, one of which was about intellectual properties, the structure of the state, which is even Bitcoin with all of its network effects and all of its strength without government edicts or government controls in order to stop it from disassociating it from itself got to the point where a minority of the actors within it said, actually, do you know what? We're going to voice ourselves. We don't like this and we're going to exit. And it wasn't they decided to keep going in perpetuity until it turned into AT&T. That was the free market itself deciding to break apart a monopoly. I'm not to say that Bitcoin Core is bad, but you don't need a company to have 50,000 patents with a shareholder board that owns the entire world and then you wait for the government to break them up to 20 pieces. The Bitcoin world shows that in a truly free market where people have the rights to disassociate and disassociate whenever they want, that voice and exit applies and even makes a better society and a better product because you don't even get monopolies because monopolies inherently start to dissolve themselves. That's a great example and to clarify for the listeners who may not be familiar with this particular aspect of history, what Jonathan's talking about is the ability that exists in most blockchains to simply fork. Forking simply means if you change the rules and you have enough of a minority to be able to sustain a new set of rules, no one's going to necessarily follow you, but you can exit. And you exit by changing the rules and then forging your own path which diverges from the original blockchain at the point of a fork, creating a fork in the road from which the name comes. And this happens very spectacularly in Bitcoin in August 2017 with the fork of Bitcoin Cash. Then again with the fork of Bitcoin SV or Satoshi Vision from Bitcoin Cash. It also happened in Ethereum with a split from Ethereum Classic that occurred when the Dow was not bailed out by Ethereum Classic but was bailed out by Ethereum. And it's also happened in a number of other chains. Another interesting example is Steam being essentially forked into Hive which was almost a user-driven revolt over some changes in the ownership around the Steam controls. So this is a perfect example of why in the blockchain space at least, exit is always an option. No one might follow you if you fork away, but you can. You can always change the rules, change the code and choose to exit. Of course, forks is just one way of exiting. You can also simply sell all of your cryptocurrency and buy another one and adopt the rules of a different chain. There's thousands to choose from and you can pick whichever one you want. It's a voluntary system in which the chain that you participate in is the one whose rules you voluntarily adopted and you adopt them only for as long as you wish to add your economic activity to that system. So it's the ultimate system where exit is always allowed. To put it into a legacy metaphor, imagine if eight or nine years ago when Google literally removed Don't Be Evil from their core values, if the 10 to 20 percent of shareholders that were fundamentally disturbed by that were able to take a perpetual free royalty to all of the IP of Google proper and created their own company and just forked Google and said, well, we're going to maintain this concept of Don't Be Evil and not being totalitarian. You obviously can't do that, but in the blockchain community, you can. In fact, as far as even keeping the name and calling it a Google malevolent. No, they would have to call the good one Good Goal. Good Goal. That's even better. And then there'd be a whole argument about which one is the real Google. Is it Good Goal or Bad Goal? Goog evil. Yeah. And to your point, Jonathan, intellectual property wouldn't have allowed them to do that. Whereas in Bitcoin, effectively, that's exactly what happened down to the kind of semantic arguments about who is the real Bitcoin. And of course, the ultimate answer is that's an entirely subjective answer. The real Bitcoin is the one that you've chosen to believe is the real Bitcoin and whose roles you've chosen to voluntarily adopt by joining that blockchain. Doesn't matter what the rest of the world is. What about voice within cryptocurrencies? Because theoretically, it's possible for anyone to contribute code to the Bitcoin protocol. I think in practice, it's usually more people who have found a way to support that. But there's a lot of people who have contributed small amounts to the Bitcoin software. And with other cryptocurrencies, it's usually the same thing. It's all open source. So you can see what's going on and you can come up with ideas and you can contribute towards making them happen. You're certainly free to fund developers if you like them, but you can't do it yourself. Yeah. And I think that's another example of how the possibility of exit supports voice. Here's a great example of voice that doesn't require exit. One of the Bitcoin core developers who has long been a bit of a car margin and outsider in their opinions, in terms of popularity contests at least, is Luke Dasher or Luke Dash Jr., depending on how you want to pronounce that. And Luke has taken a very contrarian view to a lot of the conventional wisdom positions of other Bitcoin core developers and often gone against overwhelming majorities of core developers who disagree with them. And Luke has been publishing, I think, since 2014, an alternative implementation of Bitcoin core called NOTS, which you can download and compile and run, that is consensus compliant with Bitcoin core, but which implements specific policies and essentially it embodies Luke's values and positions in a piece of software. And Luke didn't exit by forking. He simply has chosen to provide an alternative perspective. And that alternative perspective happens to be code you can run to join that perspective. And there are a few people who run NOTS instead and it has parallel releases. That's an interesting kind of experiment there. In Ethereum, similarly, you have a bunch of different client implementations that represent often very different perspectives and approaches to how the code should be managed and written in the form of the Go Ethereum client Geth and the Parity Ethereum client written in Rust. Different philosophies, again, consensus compliant, but offering a significantly different user experience for those who decide to use those different clients. So there is actually even within blockchains, even within the fairly strict constraints of consensus, there is enough room to have a couple of differing opinions which don't diverge from consensus, but give people an ability to express voice. I'm really fascinated by the concept of consensus. And the more we start to learn about Bitcoin and the more the adoption grows, the more it feels like we're reinventing old forms of theological discussions. And so when you're talking about Luke Jr.'s implementation and how its consensus compliant but has a different take on everything else, it's sort of like how when you go to church and you start doing our father and then all the Catholics sit down but all the Protestants keep talking because they have like an extra sentence or two. It's like they all have the same hard rules, but there's like all these edge differences that ultimately mean it's different in flavor and feel, but it's still fundamentally the same thing. Reminds me of that old joke where two people meet at a bridge and one of them goes, hey, are you from around here? Yeah. Do you believe in God? Yeah, I do. Me too. Oh, that's awesome. Are you Catholic or Protestant? Protestant? Oh, awesome. Me too. Evangelical or Reformist Protestant? Evangelical Protestant? Oh, great. Me too. Great Lakes region Protestant or Southern Baptist Protestant? Oh, Great Lakes region Protestant? Oh, awesome. Me too. Great Lakes region Southern district Protestant or Great Lakes region Northern district Protestant? Great Lakes region Southern district Protestant? Oh, great. Me too. Great Lakes region Southern district Reform of 1772 or Great Lakes region Southern district Reform of 1867? Oh, Great Lakes region of 1867. Die heretic. And then I jumped off the bridge. Sorry for stealing that comedy sketch from someone else. We could do a similar sketch for a blockchain, right? So are you into cryptocurrencies? Yeah, Bitcoin or Ethereum Bitcoin. Oh, me too. Bitcoin Core or Bitcoin Cash. Bitcoin Core. Oh, me too. Bitcoin Core pre-seguit or post-seguit? Bitcoin Core post-seguit. Oh, me too. Bitcoin Core post-seguit with Tafford. Oh, yeah. Bitcoin Core post-seguit with Tafford. Me too. Not's implementation or Bitcoin D. Not's implementation. Die heretic. Yeah, that's so true. Sometimes people are the most harsh on the people they agree with 95% instead of the people they agree with, like 25%. Yeah. Meanwhile, there's a guy whistling past this whole conversation going, I ought to solve all of these problems. That needs to be a cartoon. It's the uncanny valley of tolerance, right? So it's the closer somebody looks identical to you, is the closer they trigger an immune response into killing something that looks like a mutant, right? It's like, what is it? Your killer T cells kill cells that might become cancerous. Your immune system kills things that are not the body. Killer T cells kill cells that look like they've mutated. It's the closer you become identical to another person, the more you go from not activating their white blood cells, but activating their killer T cells into killing something that looks like it's mutating. Which makes tricky this whole balance between voice and exit. So while blockchains give you tremendous opportunities for religious schism, factionalization, reform, protest movements and protestant movements, nailing a new declaration onto the walls of Bitcoin Core or whatever. While they give you a lot of options for exit, in fact, because of consensus, the options for voice are rather limited. Is that a good thing or a bad thing? I would say it depends on whether you want to change the system from the inside. If you're like, oh, it's pretty good, but you know, it just needs a few tweaks. Or if you're like, no, burn it all to the ground. Let's start over. The system is rotten to the core. I want nothing to do with it. Maybe there needs to be an equation to this, like a Bayesian calculation for how one would value this. But I also think that the value of voice is proportionate to the cost of exit. And so whereas in Bitcoin, some people may perceive that they don't have an impactful voice. The cost of exiting is so near to zero that that should be factored into the function of voice that they have within it. Versus, for instance, people saying, well, if you don't like the fact that it's now illegal for you to leave your home after 5pm, you could just leave the country. But you also can't do that right now because we're not issuing passports for people to leave the country and no other country is letting people from our country leave. It's like the voice is important when exit is costly. And it's not that voice is unimportant when exit is cheap. It's just that I think you need to evaluate it in whole, like an aggregate number. Well, if I combine these two positions and I think what you said, Stephanie, and the follow up from Jonathan really have a beautiful synergy to them both points with great merit in an environment where the people who are involved in blockchains by very definition are the kinds of people who are not interested in changing the system from within. Otherwise, they'd be trying to change the banking system, the fiat system, the political system of nation-states based on fiat currencies. Once they exited from that, possibly at great personal cost at first, certainly in terms of their reputation as a kook in their family and broader community, then exiting once again because they disagree with the blockchain conventional wisdom or consensus to form a fork and then exiting once again to form another fork. Once you start forking, it's very difficult to stop. And those who are most prone to forking will fork again. Once a forker, always a forker, like my mom said. So that's really interesting because exit seems to be the MO or the obvious choice for those who are in the Bitcoin and even the broader blockchain space. In fact, many of the people who are interested in things other than Bitcoin in the blockchain space exited from Bitcoin in order to get there. So they're already one exit in. Why not three? And to Jonathan's point, if the cost of exit is zero, which in blockchains, it almost always is zero. You might even pay a small social cost. You might become a pariah. But forgive me if I'm wrong, but many of these pariahs are like millionaire pariahs, tropical island pariahs. So well, you still have costs for building up a following, right? If you want to start something new, but that's different than exiting. Yeah. If you're exiting, the only cost is if you're going to sell all of your crypto and then it's like, you know, you have costs associated with that, I guess. But if you want to build something else up, then that's not really part of the exit costs. That's more of an entry cost into another thing. Can we all take a moment and just pour out a metaphorical amount of beer out on the road for Mike Hearn, who decided to sell all of his Bitcoin in 2016, said, I am leaving. And then people accused him of front running the market because after he announced that he was done with Bitcoin, it went down like 10%. That was an exit cost, but it was an exit cost in the future, not then. Well, you could say it was an opportunity cost. But I mean, what did he get in at, right? He probably still made money off of it and he accomplished stuff and he can be proud of that. Well, it's also important to talk about, like Mike Hearn as an example, right? He's someone who had an inordinate voice, so much so that he had a completing implementation that was going to be consensus non-compliant and tried to change the way consensus was formed with a benevolent dictator for life. And he decided that if he were to have no voice in this community, that he was then going to exit. It wasn't just, I have very little voice, but I can exit whenever I want. It was if I have no voice, then I will exit. And he did it and nothing stopped him from doing it. And once he decided that he would no longer try is when he left. Nothing kept him here. There wasn't an NDA or a non-compete or a vesting period or a cliffing period. Right. I was thinking about that, Jonathan, and that it brought up an interesting question for me, which was what is it when a community kicks you out? I'm not saying that happened to Mike, but if there's a community and then there's one kind of person in there that nobody likes and is throwing a monkey wrench in the works and is just saying, oh, well, I'm just trying to have my voice, right? And then the community kicks them out. What is that? That's the interesting thing. I don't think you can kick anyone out in this community. That's an interesting perspective there because it's the opposite of exit. It's the ability to remain inside even when no one likes you. You could say that for other people who have been kind of career car margins in Bitcoin, again, the example Luke Das Jr., who are quite happy with that role, doesn't bother them, and they're not being kicked out. They're quite comfortable to continue to operate within how much voice they have in the community and do their own thing. No one can really kick you out of Bitcoin. Lord only knows people have tried to kick me out of Bitcoin for being heretical in some way that offended them, and they can't. Well, so you have control over your exit. You have control over whether you stay or whether you go. So I guess that's under the heading of exit, but it's like a little bit different variation on it. Both entry and exit are voluntary, but in this environment, exit is zero cost. Where the vast majority of people who are in our space have already exited the traditional finance and fiat system by entering our space, it's a very interesting environment. It's very different from many of the other environments. And I think ultimately, that's one of the aspects in which we are diverging from the broader geopolitical world. What I'm seeing with more and more dread is the fact that more and more nation states are limiting the opportunities for exits. I'm not talking about pandemic related measures. I'm talking about much more significant long term measures that seem to be happening across the world, where more and more people are losing their freedom to travel, their freedom to leave, their freedom to use a passport to exit. And in that kind of world, where the opportunities for exits are gradually and then perhaps more rapidly being diminished, Oxygen world, the Bitcoin world specific, stands in stark contrast as an environment in which you can always exit. And even if you don't, you have voice that can't easily be taken away from you. I think that's a beautiful example. And that divergence is going to create quite a bit of conflict and cognitive dissonance. Talking about that divergence even further, I would say that almost every major shift in civilization occurs when we have a fundamental difference in how we implement voice and exit. And so if you look at what made America distinct from the requirement standpoint, it was a democracy with a president that got elected. And it was that you could declare bankruptcy, right? This concept of the son not having the debt of the father and a person being able to just hit reset and not be a slave to their debt to their one mistake for forever, that those two things combined created that thing that we would call or brand the American dream. And it's whenever we iterate another phase shift in how you can express your voice and how you can exit, that we create new types of community and more growth in what it means to be people. And I think that whatever the delta was between the British debt slavery and kingdom to America's democracy and bankruptcy, I think blockchain provides because everyone can have a voice that's based upon merit. And to the extent that they don't like that structure, they can leave at any time and retain the same level of involvement that they had from before. And so I think it's the same difference in exit and voice freedom. And I think that it's going to create a new type of not American dream, but like blockchain dream. And people will be seeking that out instead of seeking the old time of freedom out. So that brings up an interesting point. That historical example of the American dream and giving you the possibility of exiting through bankruptcy, was that the more powerful force? Or was it just simply the destination of America, allowing a whole bunch of European immigrants for the most part to exit old Europe? And the pressure that puts on Europe when people could do that, it's difficult to tell. Nowadays, I think exit is to Balaji Srinivasan's talk much less a physical act. I think that was one of the big points of his talk was that in the past, exit was very much a physical act. And that carries significant costs, financial costs, but also disruption, community loss, etc, etc. If you can, at some point in the future, maybe that's already possible, exit without moving, exit virtually, exit financially, exit professionally. Without exiting geographically, does that change the power of exit? Anyway, if you're interested in some of those thoughts, it's really worth watching that particular talk with Balaji Srinivasan. We'll link to that in the show notes so you can do a deep time. And that's all the time we have for this episode of Speaking of Bitcoin. Thank you very much for listening. Today's show featured Jonathan Mohan, Stephanie Murphy, and myself, Andreas Amantanopoulos. Adam B. Levine was out for this week. This episode featured music by Jared Rubens and Grity Beats with editing by Jonas. You can send us an email at adam at speakingofbitcoin.show or leave us a review on your favorite podcast player. Until next time, thanks for listening.