Transcription Episode 8

Hello everyone and welcome to Living on Blockchain. I am Tarusha, your host. Today we are interviewing somebody that I’m really fangirling about all over.

We’ll be talking to Jeffrey Tucker, who is the Editorial Director and VP at the American Institute of Economic Research. He is a prolific writer. He has written over 10 books in the last decade.

I hope you guys find this particular conversation as meaningful as I did. Hi, Jeffrey. Thank you so much for taking out the time to speak to us today.

It’s absolutely an honor to have you here. How are you doing? I’m doing just fine. Thank you so much for having me.

Yeah, I’m really grateful you could take out the time. So could you tell us a little about your background? Sure. Well, my main discipline that I studied in academia was economics.

And I work as the Editorial Director for the American Institute for Economic Research, which is a nice institution founded back in 1933. So we’ve got a long tradition. But for a good part of my career, I wasn’t something like a public intellectual or much of a writer, really.

I was more of an editor and a builder of web spaces. And so I fell in love with digital technology, of course, about 1995. And I really kind of focused entirely on technology and economics until about 2009.

So I spent all those years of 14 years just just fiddling with websites and online books and digital technology and just using every cool new thing that came along. In 2009, I started being more of a writer and an intellectual and I guess you would say. And then over the last 10 years, I’ve written about 10 books.

So yeah, wow, you’re quite a prolific. Later, I saw that and I was floored. Absolutely.

That’s quite a number. And you know, you write about serious subjects as well. So just tell us how you got into the blockchain space.

For sure. Now, that is because it’s a fascinating story. Really, I had been.

Well, let’s just say as a web builder from 1995 on, I had been intrigued that we had seemed to a digitally based medium of exchange or what people might just call a money. We didn’t have a money. And throughout the 2000s, there were many attempts.

There was DigiCash and Eagle and all these things were trying to come out, but none of them really worked. So by about 2010, you know, when Bitcoin was really getting going, I didn’t. I was a skeptic.

I was convinced that it couldn’t be done because of one main problem. And it’s the virtue of digital technology and web spaces. But it’s also kind of a problem from the point of view of monetary theory, that everything that’s digital is kind of infinitely reproducible.

You know, code is reproducible, images are reproducible, sound is reproducible. You can create infinite copies of everything. That’s one of the reasons that the World Wide Web is so powerful.

But money, it turns out, it becomes very important that it be reliably finite, that you not make new units of it. And so I was convinced that this problem could not be overcome. So when Bitcoin came out, I thought that’s not quite right.

And it was like, I didn’t believe it could happen. In early 2013, finally, I got surrounded by a kind of group of old gangsters in the space who had been into Bitcoin for a while. And they sent me, well, actually, I sold my bow tie for three Bitcoins.

Oh, wow, really? Yeah, over a lunch. Well, because they said, well, we can show you how it works. I said, well, okay.

And they said, how about we buy your bow tie? And I said, okay, that’s fine. So I downloaded a wallet. I think in those days, it was a wallet.

And they said, well, how much for the bow tie? And I said, well, how much is Bitcoin now? And they said, well, it’s $14. And I said, well, I did the math. And I said, well, I’ll take three Bitcoin.

Wow. So they did. They sent me three Bitcoins.

And it was an interesting experience, because when I saw it arrive on my phone, I thought, okay, this feels like a piece of property. And then I left that meeting kind of like my mind blown, like this is mysterious and amazing. And that really inspired me to research more.

And back in those days, it was actually very difficult to find anybody who could explain Bitcoin in English to me. And I was not familiar enough with the blockchain language to be able to even follow the technical explanations of it. So there was an article in Wired magazine that really, really attacked Bitcoin.

In those days, they were really against it. But they mentioned in passing that there’s this finite supply of Bitcoin, and that the way that that was going to stay finite is that there was this shared ledger that would always be synced up with a protocol that would release these things in a certain order, and that ownership rights over those individual units would first be established by the people who volunteered their computing power to run this ledger. And then after that, trades within on that ledger would be registered on this basically this database that was shared all over the world, so there wouldn’t be a single point of failure.

And I thought, all right, that is some crazy stuff, because that’s what ruined every previous money was the inability to monitor what was happening, really. And because the creation was, well, there were three things that ruined every previous money. One was that they’re always a proprietary product, not belonging to the whole of humanity, but to one company.

The creation of those units was at the discretion of that company. And so there was always a single point of failure. Now we have something that belongs to the whole of humanity.

The creation of the units was determined by an embedded protocol that was constantly monitored through crowdsourced developers, just like WordPress or something like that. And that everything was perfectly transparent, so you could see at all times what was happening on the network, and that people all over the world, you could run your own copy of the blockchain on your computer. So I thought, my God, this is amazing.

It seems to have overcome the problem. And so at that point, I really did take a huge risk. I think it was in April of 2013, I was working at the time for Lesley Fair Books, and I wrote a big article on Bitcoin.

And I think I was the first really American economist with any kind of big public profile to say this is real. And I was criticized so heavily for this. I mean, I came out of this book and everybody said, well, you’ve bought into a Ponzi scheme, you’ve been tricked, you’re engaged in a pump and dump, and so on.

And I sweated it out. I thought, if I’m wrong about this, my career is dead. Yeah, right.

Yeah. Your reputation was on the line, quite literally so, because you were one of the very early adopters. So I think you’re quite a pioneer in that way of thinking, considering that, you know, you come from a very traditional background of economics and academia, obviously.

But I think, you know, voices like yours, they kind of add so much credibility to this entire movement. And, you know, I would say that it’s good for the movement in general for people like you to actually give support to it so that we can, you know, further this, because ultimately, Bitcoin is something that solves a lot of problems. And if not Bitcoin, just in, you know, per se, but then I think the technology in itself is so beautiful, that it has so many use case scenarios, right all over the world.

So yeah, I think this is brilliant. And you know, really, you’ve got three Bitcoins for that boat, I’m floored. This is like one of the best stories I’ve heard, I think.

It comes right there with the pizzas. And wow. Yeah, it was very nice.

But you know, one of the things that mystified me, I was, for me, it was mainly an intellectual puzzle. So to try to figure out like, why this is a viable money, but there was still another question, which was, where does it get its value? Right? So I can, I could create a lot of like, really scarce things, you know, but that doesn’t, that doesn’t make them valuable, just because they’re scarce. There’s lots of things that are scarce that are worth absolutely nothing, because they have no use.

So I really had to figure this out for myself. So what I did in October of 2013, is organized an academic conference on Bitcoin, called the Cryptocurrency Conference. And I invited academics and financial professionals and computer coders and everything into this two day thing where we all tried to figure out what was what.

And that was a fascinating meeting. I absolutely loved it. But even then, I was still unable to answer that real critical question.

And it was only I think, later that year, maybe early in 2014, that I finally locked in on the actual answer to that question, where does it get its value? And what I realized is that, that Bitcoin solves a huge problem that, not a problem, but it fundamentally disrupts what we think of as being the qualities of money. And I’ll explain why. Yeah, I think that’s so bang on.

Yeah, you hit the nail on the head. Yeah. And so what happens is like, right now, we have this thing we call money that’s mostly produced by governments.

And then we have these things called payment systems, right? So it’s Visa, MasterCard, and so on, or Zelle, or Venmo, you name it. These are payment systems. These are mechanisms by which we get ownership rights attached to monies from one person to another.

There’s no other way to do it. Unless I’m standing in front of you, I can hand you a dollar bill. But if you’re remote, geographically non-contiguous, then I have to deploy a third party technology, like a Visa, or the post office to send you a check, or whatever the thing is, or maybe I’ll send up a smoke signal, you know.

And you have to trust me, you know. But there’s always a trust element there. So what happened, and I realized this incredible innovation of Bitcoin was, it united the money with the payment system in a single technology.

That payment system is, of course, blockchain. And that’s when I realized that Bitcoin on its own wouldn’t necessarily have any value at all, necessarily. What really infused Bitcoin with value was the possibility of deploying this blockchain technology to exchange ownership rights.

So it was blockchain that gave Bitcoin its value. And once you realize that, then that’s amazing. And there’s several other steps you have to figure out.

Why is blockchain so valuable? And that took me another year or so, too. Yeah. I think, you know, it’s like what Anderson keeps saying, that, you know, it’s the technology that you need to sort of fall in love with.

The technology in itself, it has such far-reaching, you know, impact. You can be solving a problem for somebody who is absolutely on the other side of the world. And, you know, this technology has the capacity and the potential to kind of do that.

Well, I love what you said about money. It’s all about trust, right? Just because, you know, you trust that that particular piece of paper, you know, which says five bucks has that value, you know, you kind of use it as a means of exchange. So that is something that I think a lot of people don’t really understand, that, you know, how the kind of financial, the traditional monetary system works, that it’s a system based on debt, which is not necessarily a bad thing.

But the way it has evolved has become a bad thing, because, you know, it kind of, as you said, that the two, the payment systems and the currency, they are kind of separate from each other. And that separation kind of decreases the efficiency that can be there in the system, the transparency that can be there. And moreover, you know, kind of making it more inclusive.

I think that is what Bitcoin and blockchain does, that it transforms the monetary system into a more inclusive system. So anybody with a, you know, mobile phone with internet can be a part of this. That’s exactly right.

And it doesn’t care about your identity, or your past credit history, your address, you know, whether and to what extent you have a driver’s license and a passport and all these things that the modern banking system does, and it traces you and attracts you, and it wants to know. I mean, all payment systems like this rely on trust relationships, whereas Bitcoin just completely forgets about all that. And this is why it’s so valuable.

I mean, like, what is the major use case of the currency of the money today is in international remittances, because there’s no easier way to get value across borders than through blockchain technology. And this is why there’s such a booming market in ATMs, where people can take their, they can cash a paycheck, buy Bitcoin through their wallet and send it to their mom, you know, all the way around the world. And now she’s got it, you know, I mean, it’s like almost immediately and so on.

And it’s nearly instant. Yeah, it’s absolutely infallible and nearly instant. And most importantly, I think what really does matter when it comes to international remittance are the fees, like banks are very sneaky that way.

If you’re using a medium, then you know, if you’re sending money to say, a poorer nation, it’s more expensive, it kind of blows my mind how that works. And I think it’s so, it’s kind of, you know, putting, doing something wrong to the user, right? Like, they are already sending it across to a poorer country, and you’re levying a heavy tax and charge on it. So I think that that kind of aspect really gets beautifully solved by this technology.

So now just for you know, our listeners, perhaps you could tell us how you fell in love with the technology in itself. As you said, it took you another year to sort of, you know, realize how important it is. So several steps.

One, I realized Bitcoin worked, then I had to figure out why it worked, and then why it had value. I discovered that blockchain itself is the reason the payment system, united with the money is what infused Bitcoin with its value. And then I had to figure out why is blockchain by itself valuable, even apart from its uses as a payment system.

And what I came to realize was that it is a system by which we keep track of ownership rights. So this is a, and now, so now you have to ask yourself, why does that matter? You know? Yeah. And it matters for the, if I can just kind of go back speaking anthropologically here.

In history, private property is probably not necessary, unless you have a problem that too many people are trying to consume the same thing at once. Like if you lived on a land with trees that gave you endless amounts of fruit, and the ground just grew all the things you need, and there are animals walking around everywhere, and you could kill them and eat them, you’re going to be happy. And there’s enough caves that you can live in.

Everybody’s happy. Nobody needs private property. But the problem is, once you get a struggle over a scarce good, now you have to decide, okay, this is yours, and this is mine.

Let’s stop hurting each other. Let’s just have a peaceful relationship, as long as you decide to let me own what I need to own, and let you own what you need to know. That’s good.

And that’s, that is basically the way history, in various times and places, panned itself out, say, 150,000 years ago, and that sort of thing. The problem is, it’s not really a problem, but you need some way to keep track of these ownership assignments. Besides just… In your head.

Yeah. You agreeing to not take my camel or whatever, you know? Yeah. Right? And so, you need some kind of ledger.

Some kind of… And now, these have always existed alongside, in other words, the development of private property, or ownership assignments, came technologies that told the whole community the story of who belongs to what. And you can trace this technology too. So, you know, and there was an island in the South Pacific somewhere where they had stones.

They would carve ownership rights on the stones, or you would use tablets, clay tablets, that sort of thing. As we got into the modern era, in the 15th century… Let’s go back a little bit. 14th century Europe, with the development of banking, you had to keep track of loans and payments back.

Those were also about assigning ownership rights. And so, we had a technology. In the ancient world, they used to use this stuff called papyrus, which was like leaves, but those are not very durable.

That’s why we don’t have a lot of papyrus that you can really read today, because it fades and it goes away. But in the 12th, 13th, and 14th centuries, they invented the ability to use ink on lambskin, and it was called vellum. And so, all the Medici banking system really relied fundamentally on vellum to record everything.

And then later, the newest technology to record ownership rights was parchment, of course. And that lasted for centuries and centuries, until we had modern paper and that sort of thing in the 19th century, in the 20th century. By the 1970s, when we invented databases, computer databases, now we had something really powerful, because it didn’t have to be written down, and you could just change one little thing and reflow all the rest of the numbers without having to copy the entire sheet over again.

That was very nice and accurate, and very much of an improvement. The problem is that even then, there’s an issue that a database is not shared. It’s just owned by one entity, right? And so, that’s subject to fraud and changing, and you have to trust the person who’s managing the database in that case, right? But it was beautiful, and it was wonderful.

And that takes us all the way up, essentially, until 2008, where in the early 2000s, we began to develop technologies where we could share, file share across large platforms with these distributed systems, right? First with music and images and that sort of thing. And then later, that file sharing technology came to be applied to ledger technology itself. And then you could open source it.

So, when you realize this, blockchain is a tremendous innovation at doing what humanity has always aspired to do, right? So, it’s not like we’re somehow space-age weird beings now, we have the need for blockchain. I mean, if the ancient Aztecs had had blockchain, they would have been thrilled with it also, you know? So, humanity has always needed blockchain, but we’ve only recently developed the technology to have it. Yeah, I think that is very correct.

It’s a very correct way of putting things in perspective. Like, you know, like, our, always needed blockchain, but the technology has just, like, you know, we’ve just come up with the technology, and now the world is again catching up. I think that is, that is such a beautiful way to put it.

And I don’t think I’ve heard anybody kind of put it that way. This is good, because, you know, it kind of gives you a new perspective, because you have to look at it historically to understand the kind of value this technology is bringing in. Because there are so many naysayers, right? Nowadays, like, whenever this technology is still, it’s in infancy.

And even with internet that had happened, like, there are naysayers, when internet had come up, and, you know, it was called, like, a den of poinsters and scamsters. But I think that, you know, there are more good people than, you know, the bad ones who are trying to give it a bad name. And this, this technology, as in itself, has such far reaching impact.

And, you know, it’s not just Bitcoin, there is so many, so many other use cases as well. Right? Yes, that’s right. So, like, the most obvious use case is titles.

So right now, we still have very old fashioned system all over the world in terms of keeping track of titles to, for example, real estate houses. Absolutely. Yeah.

So you have to be able to, like, if I wanted to go buy a house, like, oh, there’s a pretty houses for sale. Well, I want to buy it. All right.

The bank says, well, here’s your money. And so but in order to close the sale, I have to have a clean title. So there has to be a search.

And during the search, you have to go through these these records, mostly databases that are that are centrally controlled, and be able to absolutely verify that the person who’s selling the thing has a right to do so 100% of a right to do so. And then that ownership right is transferred to me. Now quite often, it doesn’t work.

You end up with something like not a clean title. Yeah, it happens so much. I think, you know, all over the world, I keep hearing about legal disputes over properties, right? Because there are always there are a lot of people who, you know, inherit properties, and they need to like sort of get a clear deed from perhaps the equal of part owners, but that is not usually done.

And then there are so many property disputes, I think it can be such a huge use case. So even in India, I think recently, they are trying to implement blockchain for property titles, but in just one state, I think only a state government is trying to do it. And I don’t know how, how, how much of an effort are they really putting it was launched with a lot of, you know, fanfare, that they’re using blockchain now to sort of record it.

But I think that in itself would be quite a tedious process, right? Like to put the existing data on blockchain, that can be very tedious as well. Because these, these, these titles, they go on for like, you know, for probably they have, like 99 year old title deeds, etc. And how do you put all of that data on blockchain? So this is something that can be a challenge, right? What do you think about that? Yeah, that’s exactly is a huge challenge.

Let me just give you a typical use case. This is what happens. So let’s say, in 1900, you had a family living in a home.

And, and, and, and, but then the parents also bought a plot of land 10 miles away. And they farmed that land and they lived in the home. But now the parents are getting older, and they and now it’s like, say 1920.

And the parents want to go live in a beach house and they leave. And they have two daughters, one stays in the house, the other stays on the on the plot of land. Alright, so now it’s, it’s, it’s 1940.

Those daughters have children, and then those kids grow up and, and but at some point, the siblings trade, they’re like, you know, I would rather live over in that cottage on your land. And the other one says, Well, I think I would rather live in the house. Like, okay.

And so they switch places. And it’s fine. Everybody’s happy.

It’s okay. But then they have children. And then they have children.

Now you have and those children have children and so on. Now you have something like 60 people out there who believe wrongly that you’re they own the house and other people think they own the cottage. One of them tries to sell it.

And they look into it and discover, oh, this house has 60 different owners. And it’s a problem. And so now, now you’re in a problem, you want to buy the house, and the lady who lives there wants to wants to sell it to you.

But now she discovers that she’s only one 60th and owner of the thing. Right? So now she now the title company has to call every single person, all 60 of those people, tell them that that, first of all, it’s a very expensive process, and then tell them that they own one 60th of a house, what would they like to sell it for? You know, so these things, and if you get a clean title, the entire house becomes actually, even if it’s beautiful, becomes completely worthless, because it cannot be transferred. So it’s extraordinary.

And so this is the problem. To blockchain all the properties and this doesn’t, I mean, and this is, this is a huge problem, not only in the United States, right, or in Great Britain, but all over Latin America, because there’s a lot of people who live on land, and they’ve been living there for generations that they’ve never technically owned, you know, and this is all over Latin America and all over the world, really. So there has to be so the block putting all this stuff in the blockchain, which is absolutely essential, is an arduous process.

And I remember about 10 years ago, not even 10 years ago, five years ago, there were a lot of companies that were trying to do this. But they kept running into problems with real estate, real estate is very difficult. Now, it’s a lot more simple with things like cars.

And that is going on all the time, you have these antique cars, and paintings. Now, what would be the advantage of putting artwork on the blockchain? The advantage is that so once it’s on the blockchain, you can have divisible units of ownership. So if I have a Picasso painting, and it’s in my in my living room, and yeah, and, and I wanted to sell it, I have to give it up to to somebody else, or I can lend it to museums, and they can maybe pay me a rental fee or something like that.

But but what what if I could sell units of ownership over the painting that would pay out depending on how many museums borrow the painting for display? And yeah, yeah. And and so, so I could divide my painting into 10,000 different ownership units. And everybody gets so the the Picasso becomes tokenized.

And and then people own these tokens, and and they get a revenue stream based on the supply and demand for seeing the painting that’s going on right now all over the place. It’s true also in auction, and then you can auction off those units of ownership, right? So that the applications are extraordinary. And in the realm of health, records and stuff like that, that’s also a blockchain technology, but there’s many, many applications of it.

It turns out, in other words, what I thought was the great innovation, which is money, and that’s great. There’s probably another 1 million applications of blockchain, apart from money, and that we’re gradually discovering world supply chains, for example, and there’s another one. So there’s infinite applications.

As I say, this is the next generation of ownership assignment technologies. And once you get that in your mind, you realize, oh, this isn’t just a play thing for geeks. This is a foundation of the next level of civilization, right? Yeah, absolutely.

You know, I think that is like a very relevant way of putting it across, because I think that kind of that is a problem that comes across with any new technology. For internet, you know, it was also labeled something that was just for nerds and geeks playing around with their little computers. But now, I don’t think anybody can imagine their life without the internet, at least, you know, in mostly all over the world, right? You know, you book a cab on the internet, you find love online, you order your food online.

So I think adoption definitely does take, you know, a while, and perhaps it’s, you know, there is a curve involved to it. But I, you know, how would you suggest that mass adoption can happen for blockchain technology? How do we make this value proposition, which is very clear to us, people who are working in this space, how do we make it more obvious to people who are perhaps not in this space? Right, I don’t think there’s any fast way. This is something I’ve learned the hard way.

Like, I think when I first discovered this back in 2013 and 14, I thought everybody should adopt it, and it would happen like right away, the same way the same way that TikTok became famous, you know? It took six months, you know, and everybody’s using it. The problem is that there are legacy systems in place that everybody already knows how to use. And people continue to use them.

And once, because the costs of switching are too high, like intellectually, people get confused. If something that they’re doing now works for their purposes, there’s no particular reason to change unless it becomes accepted to the extent the status quo is too costly. Then they have an incentive to undergo the costs associated with the intellectual upgrade and the change and the retooling.

Look, this has always been true. For example, if you go back to American farming in, say, 1910, it was almost entirely done with horses and plows. Well, over the next five years, there became a market for tractors.

Right. But you’d think that, oh, well, if there’s a tractor, everybody’s just going to give up their horses and get a tractor. Not necessarily, because they have a big investment already in all the horses.

The farming’s being done. To buy the tractor means not getting maybe five new horses that you could actually, you know how to use. You don’t know how to use the tractor.

You’re not sure where you can get gasoline. The thing is noisy. It breaks down.

You don’t know how to get it fixed. It scares the horses. So there’s a lot of reasons why it took so long.

It took 10, 15 years before American farming got rid of the horses and adopted the tractors, because the cost of switching is too high. That’s the same thing with blockchain, too. People are happy with their centralized databases.

People, they’re happy with credit cards and that sort of thing. You know, one of the things that’s fascinating to me is when Bitcoin came along, you saw a real panic by about 2014 or 15 within the financial industry that our payment systems were terrible. They were slow and expensive.

And when Bitcoin really started kind of moving, a lot of banks and payment processors and so on began to get incentivized to upgrade. So it was during that same period, right when Bitcoin was really, really starting to soar up in value, that you saw all these new technologies coming along, you know, like Venmo and Zelle and cash apps and all these integrations with even Facebook integrating payment types and even banks themselves were getting better at mobile banking. So you could scan your check immediately.

Now, all these are based on trust, right? But for the people who are using them, it’s a lot easier to do that than it is to try to figure out, you know, a complicated blockchain app. So I think that, first of all, it’s going to happen. It’s just a matter of time.

And I think what also might kick it off in a sense is some sort of crisis in the existing technology. So let me just give one example. The whole world’s been under lockdown for like six months as a result of pandemic concerns.

And they were able to shut down theaters and bars and parks and anything physical. One thing that didn’t shut down at all is blockchain and cryptocurrency. That went on just as normal.

Now, even despite all the shutdowns, we haven’t had an actual financial crisis associated with the lockdowns. So the banks continued to work. You could continue to get cash out of your ATMs and your payment systems were fine.

Thank God for that. I’m really glad for that. But if it had been different and the credit system froze like it did in 2008, we would have seen a lot more adoption of a whole variety of tokenized monetary assets over the last six months.

Now, the other thing is that governments around the world have spent trillions and trillions, trillions, unbelievable amounts of money trying to bail out their own economies from the lockdowns. And the central banks of the world have created also trillions of new notes. There’s no big consequence to that right now, not yet.

But what happens next year when this money starts flooding the system and governments are facing a mass fiscal crisis, where there’s no revenue coming in and there’s a huge deflationary effects and that sort of thing? What happens then? Well, that could be a serious problem. We could actually see a credit crisis develop over the next couple of years. And during that time, we could see a huge adoption, actually, of Bitcoin blockchain technology.

Yeah, it’s scary, you know, actually, like, you know, that adoption has to happen when there is a crisis. But I think that’s I think that that is how innovation kind of finds a way because there will always be a push when it comes to innovation, because people are very comfortable with what they know, and what they are kind of working with. New things tend to scare off people because either they are very comfortable in their own and they just cannot be bothered.

So sort of make that switch because there is a lot going on, you can’t blame people like there is a lot going on in everybody’s everyday life and for them to actually take out time and actively try to switch to a newer technology can be at times a hassle. So that is the learning curve that is there. But as you said, I think, you know, it will happen.

It’s just, it’s just a matter of time. Like what is going to be that particular inflection point at which people are like, okay, they’ve they’re really fed up with the system, and they want to just switch. Brilliant.

Yeah, okay. So what are you currently, you know, what projects are you currently working on? Or what projects in this space really excite you currently? Well, I am mostly as a result of working in American Institute for Economic Research, I’m continuing to focus on my publishing efforts are focused on monetary technology, payment systems, and the way blockchain is continuing to feed in, maybe not Bitcoin as such yet, but the way it’s informing monetary policy. So you see around the world, all these governments now trying to create their own cryptocurrencies.

So here at AIR, we’re doing a lot of studies over these central bank efforts. And we’re, we’re, we’re very, I would say, you know, not favorable towards them. But we’re doing a lot of research and looking into the efforts on the part of governments to try to replicate what the blockchain is already doing, which is all kind of silly, if you think about it, because I remember when email first came along, you know, we’re talking about early 90s.

The US Post Office tried to come up with its own email system. And they said that everybody would adopt it because it’s more trustworthy than the private systems. Well, they didn’t, because the private systems already worked really well.

So it didn’t happen. And this is what we expect is going to happen with all these central bank cryptocurrencies. And there’s something else that they’re doing that’s really terrible.

The Federal Reserve and many central banks around the world are attempting to create blockchain based payment systems, even though the banking industry itself is already innovating its own blockchain payment systems, and utilizing this technology to improve their existing systems. And what the central bank is trying to do is blot out and take over what the private sector is already doing. So we’re doing a lot of studies on this and seeing what the relationship between the two is and publishing a lot of work on that topic.

Okay, yeah, that’s very interesting. Actually, China is actively working on, you know, a central tokenized currency. Do you have any opinion on that? Yeah, no, I mean, what’s fascinating about the China case is that their payment systems are far more advanced than you find in Europe, England, or the United States.

I mean, far more advanced. I mean, the credit cards are not even a thing, you know, in China. Everybody used WhatsApp and WeChat and everything else as a means of payment.

So they’re far further along. So I have my doubts that anything that the China central bank will do will displace the extraordinary innovation that’s already there. I mean, China’s like basically, I would say five to 10 years ahead of the US in its payment technology.

So I don’t think there’s anything that Chinese central bank can do to really improve over what’s already going on there. Yeah, that’s correct. So what are your usual, you know, you said that, okay, you don’t believe that what these central governments are trying to do by coming up with a, you know, a country-specific cryptocurrency, that is something that you don’t have a very favorable opinion on.

So what about these projects puts you off the most? Well, I don’t, so it’s never a good idea. Governments are not very innovative. You know, this is the problem.

They don’t usually come up with very good ideas. And when they do, it usually means that they’re behind whatever’s being done in the private sector. And then once they deploy it, it’s not as good.

And then people don’t really want it. So I think the best hope for the Fed at this point and the banking system in general is to stick with its old fashioned money, but get better and better and better at payment systems. And that seems to be going on.

And that’s an attempt to kind of rescue the national monies. But as we go forward, I’m guessing that we’re going to see more and more a kind of competition between currencies. So people will use national monies, but then also various forms of tokenized assets that have money-like qualities.

And all these will be distributed together. And I think as we look forward over the next five, 10, 15 years, we’re going to see the share of payment services conducted in national monies decline relative to tokenized assets and tokenized securities and tokenized currencies. And I think that’s just going to happen gradually over time as the market demands it.

Yeah. Yeah. So I think that is very interesting.

I think as people get more options to perhaps utilize these tokenized commodities, and as you mentioned other examples, and they kind of solve their everyday problem, they can become a part of their everyday life. I think that will also obviously push adoption quite a bit, because once you start using it, you don’t really care how it works. Just the example of say internet or electricity, not everybody would understand what is happening in the back front.

It’s just something that happens and that is making their life easier, which will drive more and more adoption. So yeah, I think you’re very correct there. So do you mentor projects like in the blockchain space, because the kind of position that you are in, and you have so much experience, like the best of both worlds.

So do you mentor projects? I have in the past, I have in the past, but I’m a little more careful about that now, only because I don’t, but there’s two considerations. One is I don’t usually have time to investigate the quality of the project, whether or not I want to be involved, because we know that in the space, there’s a lot of crazy things going on. It’s hard to tell the real things from the fake ones.

And that’s a very big cost of time to do that. So I just generally say no now, whereas in the past I used to do it. The other thing is fairly interesting, because there’s a lot of major corporations in the world today that are tokenizing basically everything, right? Everybody wants to have every big non-profit.

This is especially true in Asian countries, like Japan and South Korea. I’m not sure about China, but there’s a lot of tokenization going on in non-profit world, and for-profit world. I don’t want to go into any details about which companies are doing what, but they always come to me, or not always, but often they’ll come to me and want me to sign on as a consultant, in exchange for which I get a lot of their own tokens.

And it’s as tempting as that is. I’ve declined to do this now, mainly because as the editor at the American Institute for Economic Research, I really do need to maintain an independence to be able to make judgments not based on my own fiduciary interests or ownership interests, but rather just on the intellectual merits of the thing. So I’ve declined to do that, but I do try to help in any way possible, but just not remuneratively.

I understand you need to be in a position of unbiased, because you’re writing about these things, and you’re sort of, you’re more like in the opinion formulation space now, and you know, and that kind of would, obviously those two things cannot really interact. So yeah, I understand that, but are there any projects right now in the space that interest you? Like, you know, do you think that they have a lot of potential? I know I’m putting you on the spot here, you don’t have to answer this. No, that’s okay, it’s okay.

Well, let me just, I’ll, without mentioning particular companies and things, I do think that providing more democratic access to cryptocurrencies in general is probably the most humane thing we can do right now. And that is mostly through, you know, bringing distribution systems to where people are. And this is why I would say that probably the single most profitable industry, and actually the single most successful industry within the space right now, is actually automatic teller machines, actually.

I mean, more and more you’re seeing them, you know, all over the planet. And I remember when they first started coming out, I thought this is going to be a really important means by which regular people can get access to these new kinds of assets. It was very difficult in the past, but now it’s available to everybody.

So I’m enjoying watching that industry really thrive and working with some of the companies on both sides of that, that are making the applications, the credit cards and debit cards that are associated with tokenized assets, and then watching the distribution systems come into play. And so I do work, I watch and work closely with those companies. Okay, yeah, that’s interesting.

I think it’s very important to make it more accessible. And as you said that these, you know, these companies are kind of ensuring that by creating consumer facing apps that would make it easy to navigate through this world. So yeah, that’s brilliant.

Okay, so I would like to wrap this up now. But I would like to know who are perhaps thought leaders, you would suggest that people should follow in this space to get the correct kind of information? Well, you know, it’s funny, because once people start looking into it, it can get very messy out there in Twitter, because everybody’s kind of attacking each other and that sort of thing. I tend to follow the journalists more than anything else.

I do write for Forbes all the time. We have a lot of writers at Forbes that cover the blockchain space. And I would say most of them are very credible.

So I like Forbes as a means of finding out about and following the industry. Cointelegraph is, of course, always very interesting and fun to be there. Bitcoin Magazine publishes me a lot.

And I like what they do. I have a lot of colleagues here who write for the Sound Money Project of the American Institute for Economic Research. And I really think the research we’re putting out is some of the most credible that’s out there, because it’s more academic and intellectual rather than industry focused.

But I would say that those are my main venues I like to follow. Okay. Okay, that’s nice.

Actually, that kind of, you know, that’s the right kind of information one should be consuming, I think, you know, instead of just sort of picking up on all of these signals and pump and dump information that is usually there on the crypto world. So yeah, that I agree with. Actually, I did not ask you about DeFi.

So what do you think about, you know, this entire DeFi boom that is there in the market right now? Like, do you have any thoughts about DeFi? Decentralized finance? Yeah. So everybody’s so big on it. And it’s like a bubble now.

So what do you think? Is it like the 2017 ICO boom bubble? Yeah, there’s nothing wrong with a bubble, though. I mean, you know, things, people get overly exuberant about things. I mean, there was a, what is it, three and a half years ago, Bitcoin reached almost 20k in valuation.

There’s nothing wrong with that. It brings people into the market. I don’t have a problem with these bubbles.

Decentralized finance, of course, this is the wave of the future, trustless systems. And the people get super excited about them. I mean, this happened also with the Ethereum platform, you know, a few years ago.

Yeah. Which, by the way, was supposed to be part of Bitcoin, but it went separate. For smart contracting and things like that.

It’s okay. I have no problem if people get exuberant about something. Yeah, that’s okay.

As long as you’re willing to take the risk and bear the consequences for your actions. And most people involved in the space are. You can’t get mad if you buy at the high and then you can’t get angry about that.

Because there’s probably a reason you’re buying, because you’re probably swept up in the mood of things. You don’t want to lose your money, just don’t risk it. You know, it’s pretty simple.

Yeah. Yeah. Okay.

That’s very sound advice. Because I hear, you know, so many people foo-fooing DeFi saying that, okay, you know, it’s like a bubble. And I have had the same opinion.

And I’m thinking, you know, DeFi is the way to go forward. Right? And I don’t know, I do believe that, okay, it’s really hot right now. And, you know, people feel very bullish on it.

But you have to be very informed while taking any sort of investment decision, right? It comes in any space. It’s not just in this space. Oh, it’s true.

And the dotcom, you know, I mean, like, in 1999, everybody thought Amazon was the greatest thing. And then, and then a year later, everybody said it was the stupidest thing in the world. And then it took another five years for the people that felt burned by the dotcom crash to realize, oh, actually, Amazon is the greatest thing in the world.

Yeah. If you don’t want to, if you don’t want to, if you don’t want to get burned, just stay out of the kitchen, you know, but but if you like adventure, you know, it’s a very adventurous and wonderful space. But, you know, just make sure that you’re willing to pay pay the price.

And you’re not going to, you know, claim to have been ripped off in a pump and dump, just because you made a bad decision. You know, I’m, I’m in favor completely laissez faire on this, let anybody use the money however they want. Most everything is going to fail.

Yeah, some things will succeed. And it’s it’s you have to make your best judgments, use your intelligence, and try to avoid exuberance. Actually, that’s easy to say.

This is this is so good. Like, you know, if you don’t want to get burned, stay out of the kitchen. I like that.

And I like this this entire, you know, think about how it’s it’s your money. And you know, you sort of decide what to do with it. And then you have to bear the consequences.

It’s much like life, right? And I think, yeah, it’s it’s a very, very good position to have. I think, you know, that is why I was so excited about doing this interview, because I think that, you know, I have some thoughts, you know, thoughts that completely align with yours. And yeah, okay.

So the last question here, you know, how do you how would you suggest that people who are perhaps outside right now and they are looking in, how can they get into this blockchain field or, you know, get started with it? What would you your suggestions be? How do they start living on blockchain? Well, first of all, you know, you have to decide what is your interest? Are you trying to get rich? Or you just intellectually curious? Or you just want to kind of participate in the new future thing? The problem is that 99.9% of people that get interested in this are just trying to get rich. Yeah. And that’s a very dangerous motivation for getting involved.

Because there’s a lot of people. Yeah, there’s a lot of smart people out in space. And, you know, I wouldn’t have any, I think it’s a good idea for any portfolio to include some blockchain based companies and technologies.

But it’s, it’s very dangerous. You think that it’s like the gold rush or something like this, it’s, you’re, you’re probably going to get hurt. If you get intellectually curious about it.

There’s so many good books out there, you know, digital gold, I think is a wonderful book came out a couple years ago to read, find out about it, the easiest way to get to get in, I, I think it’s important for people if they get curious about this, I mean, to inspire you to learn more, you also have to first own. So, you know, there’s, there are many companies out there that are, will, will custodian, work as a custodian for your, for your digital assets right now. And you can do that.

I think that’s a good, probably the best path. You know, the ATMs I mentioned, you know, it’s, it’s easy enough for anybody to put a little bit of money in an ATM and, and, and download an app, a wallet and carry it around for a while and watch the price go up and down. That’s I think, if you’re on the outside looking in, or you just want to know what it’s like, that’s a really good method, just become an owner, even if it’s just a little bit, and then just watch and watch the way the markets go get a feel for it.

It is can be very scary, right? You get very excited when you go to bed, you wake up in the morning, and then you’re very sad. It’s okay. This is the way the markets, markets are messy.

The world is a messy place. And yeah, it’s fun to get your hands dirty from time to time. Wow.

Okay. This has been so, so brilliant. You know, I want to ask another bonus question.

So if somebody wants to start reading one of your books, which book would you suggest they should start with? Like, which is the first book that they should pick up that’s been written by Jeffrey Tucker? Thank you. Well, you know, that’s a really hard question for the one that pertains most, most relevantly, in some sense to what we’re talking about right now is a book that’s been translated as something like eight different languages. It’s called, it’s called A Beautiful Anarchy.

Yeah. Okay, that’s the one I think I have, I purchased it, and I’m reading it currently. And I would completely second it.

And it’s quite a coincidence. I just, I thought that was the one that kind of, you know, I thought that I should start with because I haven’t read, you know, others. But I do intend to.

And that’s why I thought that, you know, this particular interview is going to be really cracking. And I’m so happy that you know, you agreed and took out so much time to do this. Any last thoughts? Oh, no, I would encourage anybody listening to check out our work at the American Institute for Economic Research.

We’re trying to do some serious stuff and communicate it with normal people as we’ve done for 87 years. So invite anybody to visit our website and follow me on Twitter. Yeah.

So thank you. Thank you so much. Thank you so much for taking out the time.

I’m really very grateful.

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