Jimmy Song (Bitcoin educator, entrepreneur and developer) and Alex Gladstein (CSO of Human Rights Foundation) join me in this episode to talk about their fantastic new book, The Little Bitcoin Book. This is the perfect short book to give your precoiner friends! It has succinct explanations on why bitcoin is important. Listen to this episode to learn more about how this book came together, what the authors are hoping to achieve, and if you like it – then make sure you buy copies of the book to give to your friends and family.


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Podcast Transcript by GiveBitcoin.io:

Stephan Livera: Welcome to the show, Jimmy and Alex.

Jimmy Song: Thanks for having us.

Alex Gladstein: Thanks for having us on.

Stephan Livera: So, guys, I know you wrote this book recently. I had the chance to read it. I really enjoyed it. I think it’s a really great book for giving to a newbie. I think it would be best to just start with a little bit around, why did you write this book?

Alex Gladstein: Jimmy, you want to lead off?

Jimmy Song: I guess I can. Alex and I were talking about possibly doing a book that would appeal I guess more to the mainstream than I think the books that were out there. We both love Saifedean’s book, The Bitcoin Standard and everything but, yeah, I mean, there’s a lot of economics in it, a lot of Austrian assumptions sort of built into it, and we wanted to present the case without having to present the economics necessarily.

Jimmy Song: I mean, there’s a lot of economics in the book obviously, but we wanted to have a book that would appeal to the mainstream and just sort of I don’t know anything about Bitcoin but now after this book I know that it actually matters for human civilization and human rights and all these other things so that was the basic idea.

Alex Gladstein: Yeah, and from my side a lot of the materials that are out there to help people learn about Bitcoin are very technical, which of course are very useful and important but I really wanted a book to help create a book that would be for like the kind of person who reads the you know traditional average newspaper, who reads whether it’s the Wall Street Journal or the New York Times or The Economist, I wanted to help create something that would be on that same level of approachability where you don’t need to be like a specialized technical person or have a specialized viewpoint on already on the way that money works to be able to understand this pretty magnificent technology.

Stephan Livera: Fantastic and I think the point that I would also raise is that there is a lot of material out there “for newbies,” but the problem with a lot of it is fundamentally that it’s wrong or it is too much of a blockchain focus or cryptocurrency focus, whereas this book has a very specific focus and I think that’s why this book is superior to basically many of the other intro to Bitcoin books out there. Can you tell us a little bit about some of your co-authors as well because I think that matters in terms of getting a certain level of technical accuracy and precision in how the book is written?

Alex Gladstein: Yeah. Let me just give you the sort of back story. Obviously, Jimmy and I first had a conversation in March with Alexander Lloyd who’s a VC in Silicon Valley who’s very interested in this topic and we were like, “Hey, maybe we can write a book together.” Then, a couple of weeks later, Jimmy and Alexander were both at this event that my nonprofit produces called the Oslo Freedom Forum which is like a global gathering point for human rights activists and dissidents, mainly from authoritarian countries, and several other bitcoiners and people in the cryptocurrency space were in attendance and one night we all kind of got the ability to get together and Alena Vranova from Casa currently, who obviously has a lot of perspective on the development of Eastern Europe coming from what was then the Soviet Union.

Alex Gladstein: Alejandro Machado, who has a background from Venezuela and has, unfortunately, watched this tragedy unfold in his country which has been primarily economic in nature. Timi Ajiboye, who is a newer friend of mine who went through Y Combinator with his cryptocurrency exchange and now is basically running one of the top ways for Nigerians to acquire Bitcoin on his exchange. As well as Luis Buenaventura who’s a pretty well-known Bitcoin and cryptocurrency entrepreneur from the Philippines, and then Lily Liu, who I got the pleasure of meeting in the last year. Obviously, who spent a lot of time in China and has that perspective.

Alex Gladstein: That was really exciting for me to help bring all these folks together. I don’t know, Jimmy, what was your take on that?

Jimmy Song: Yeah. It was cool because it’s not just the technical aspect, right? It’s really about knowing what’s actually happening on the ground and getting all of these perspectives about what’s actually happening in these places and Alex obviously knows a lot more about the specifics than I do. That was very important for us to give sort of a non-first world perspective, if you will, because a lot of the material like he said isn’t just wrong like talking about blockchain this and blockchain that, but a lot of it is just completely focused almost exclusively on Silicon Valley, and there’s a much wider world out there where this sort of stuff matters and bringing that perspective was very important to us and being able to just sort of wake people up.

Jimmy Song: I’m a dad so for me, it’s very important to give my kids a lot of perspective and that’s something that we also wanted to do with this book.

Alex Gladstein: Yeah, and for us, this is first and foremost a book about money, not a book about technology. I think that’s what a lot of people get hung up with like in San Francisco and New York and London. They think Bitcoin is a technological innovation. In some ways, it is, but more importantly than that it’s a monetary innovation and I think that we wanted to have people as part of the authoring process who could bring first-hand experience about what has happened to money, whether it was in Africa, Asia, Latin America, the former Soviet Union and have that experience that is something that honestly, a lot of folks who are in the current Bitcoin or cryptocurrency community don’t think about a whole lot.

Stephan Livera: Fantastic. I love the approach there because really that is we must think of Bitcoin first as a money rather than the typical technology ways of thinking about it and another thing that’s remarkable about this book is the way it was written. Jimmy, do you want to just lead off and tell us a little bit, what was the process and what was the way this book was written?

Jimmy Song: Yeah. I mean, I’ve written another book Programming Bitcoin and I published that with O’Reilly and that thing took 14 months to do and that just, that was such a slog. One of the benefits of debating Roger Vera on that cruise was I basically locked myself in the room for the rest of the time I wrote and like I kind of had to force myself to do it, but that wasn’t hard because going outside my room at the cruise meant like running into kind of crazy people.

Jimmy Song: That’s the sort of lengths that you have to go to to write a book, and when I had heard of this idea of books printing and that’s something that I heard through some other authors that I knew from O’Reilly. I was seriously intrigued and they were saying how they wrote, you can write a book in a week with anywhere from 3 to 15 experts on the topic and it’s something that I really wanted to try and I talked to a lot of friends about it. I tried to convince them to do it.

Jimmy Song: The big thing that turned out to be difficult was coordinating it and getting everyone to take like a week off and do all of that. When this opportunity with Alex came to write a book that’s more focused on money and on human rights and how it can change the world and how it is changing the world. It was like a really good match and that’s where we came together and basically, spent the week in a really nice house and cooked our own food and wrote like basically all day long. It was a really fun experience.

Alex Gladstein: I was pretty surprised that people actually came. We have this kind of discussion in late May and we were like, “Oh, wouldn’t it be fun to do that?” I kind of thought that it wouldn’t crystallize and actually happen. I sent out this email and people were like, “Yeah. I’m booking my flight.” I was like, “Wow.” Luis is coming from Manila and he’s coming. Alejandro, at the time, was coming from Spain. Timi was coming from Lagos and Elena was coming from Eastern Europe.

Alex Gladstein: People were really serious about it and when we got there, it really felt like, and Jimmy calls it like the CrossFit phenomenon like when everybody else is like trying really hard, you don’t want to be the one who’s like slowest, right? It created this phenomenon we’re like from the moment we started formally, it was a Sunday morning with kind of a design sprint aspect, but we were like thinking about what we wanted to write about before on Monday morning starting the actual writing.

Alex Gladstein: We were all pretty locked in and people were really respectful and it really blew me away how we were able to actually get it done. I mean, I really thought that there would be maybe like insurmountable arguments about certain things because we all have such different backgrounds. Then, we talked about the geo sort of political backgrounds but we come from different backgrounds. Some of us are investors, some of us are people from that sort of Silicon Valley realm, some of us like Jimmy are educators. I mean, rights activists. Some of us are researchers.

Alex Gladstein: We come from really different backgrounds from an industry point of view too. The fact that we all kind of come together and just the fact that everybody was so kind I guess through the process, and when we had an argument it was a healthy intellectual argument, whether it was about the Oxford comma, at which we would all make fun of Jimmy for it or more serious things like the role of, potentially the role of Bitcoin in addressing the downsides of fiat money systems allowing governments to have more prolonged wars, which I think was kind of one of the biggest things we argued about.

Alex Gladstein: I think it was super healthy and I would spare to say I learned more in that four-day period that I normally do in like four months and I would highly, highly recommend people to do this kind of like book sprint process for other things.

Stephan Livera: Fantastic, and another thing that I noticed from the write-up on how this book came together, and Jimmy perhaps you can touch on this is how you brought almost a development principle, open-source development principle of you can edit whatever you want and you can add or you can remove. Tell us a little bit about that, Jimmy?

Jimmy Song: Yeah. I think we’ve all sort of done like superhuman things in like a week before with a group and, at least, for me, those are some of my most satisfying times in life, right? Where you have to just compress the hell out of something. I don’t know, maybe you were in a band or something, you can’t play the song write and then like a week later when you’re about to do the show, you just get it perfect. Those things can happen, but it requires sort of like a higher level of like almost living and breathing and being and that’s what this really felt like for me.

Jimmy Song: I had done that before at different startups where I was under a lot of pressure but so was everybody else around me and there’s like a bond that grows out of that, there’s a respect that grows out of that. I brought a lot of those elements into the book sprint including like getting all the ideas out, like having real brainstorming, having to be able sort of like user stories and having … We wrote the reviews of what the book would be before we wrote the book, right? Those were our acceptance tests. Those are our unit tests.

Jimmy Song: This is exactly what I would do in any sort of like coding sprints so having something like that, the process I was very familiar with, but applying it to a new realm, I was surprised at how well it worked, honestly, and same conflicts that would happen in a coding sprint-like, “Oh, yeah, why are you throwing all this away? I spent so much time on it,” or “maybe it’s not really good for the reader.” But having that focus and doing all of that, it was immensely satisfying for me.

Alex Gladstein: Yeah, and just to color briefly the process which worked surprisingly well. Again, I mean, on Sunday we sat down and Jimmy encouraged us to write our predictive reviews, which would be published in mainstream media after the fact if the book was successful. This helped us understand our audiences. We had eight audiences, right? Everybody had their own audience and I remember when Jimmy first told me about the idea, he was like, “Look, I’m a technical libertarian. I’m someone who probably is similar to like 0.5% of humans or something like that. I want to get this idea and understanding and appreciation for Bitcoin to like the other 99%.”

Alex Gladstein: I think that’s what he was thinking about with his audience, and then someone else wanted their parents to be able to read it and someone else wanted a particular part of it business community. I was interested in the kind of like well-educated kind of person who might read The Economist or the Financial Times who’s kind of maybe arrogant about Bitcoin. I wanted them to kind of maybe look at this as a challenge and read it to be, assuming they could dismiss it and then kind of hopefully get sucked in.

Alex Gladstein: I’m hoping we get some of those folks, but after that, we started just like writing down literally all the things we wanted to write about to achieve those goals on Post-it notes, and then over time we hung them up on walls and we started to group them together and this created our chapters, and by the end of Sunday, we had a skeleton of what we wanted to write about. I thought it was really cool that we agreed that the first chapter should really be about why money is sort of broken in today’s world. I don’t even think we mentioned the word Bitcoin once in the first chapter and that’s to me a proper introduction for this topic.

Stephan Livera: Yeah. That reminds me of how if you look at Saifedean’s book, The Bitcoin Standard. He doesn’t necessarily mention Bitcoin at the start. It’s about monetary history, right? In the same way, the start of your book actually goes into border crossing with life savings and you’ve got some examples there from Manila, Lagos, Venezuela, Shanghai. Did you want to touch on some of those? Maybe, Alex, you could start with some of that for us?

Alex Gladstein: Well, what was interesting is that on Monday morning when we started writing, everyone took a stab at the first draft. Luis took, he was the first person to draft the first chapter and we basically gave ourselves, I think it was something like 2:00 PM deadline to have the first chapter done first draft style, right? You’re talking like 20, 25 pages of writing. It’s pretty ambitious. We did get, we sort of got there.

Alex Gladstein: When we looked at Luis’s chapter, I was really happy the way it came together because he basically, he started to interview some of the other authors as part of that process, and he started to tell some of the personal stories from different countries. In that first chapter, you’ve got Philippines, Nigeria, and Venezuela for example.

Alex Gladstein: In his own telling, I mean, when he was born in 1980, Luis’s parents had a money, they had a peso which was seven to the US dollar, and that’s kind of what guided their savings and assumptions about what they needed to do to save money to put their kid through school and things like that, but over time, over the ensuing two to three decades, the peso really, really devalued against the dollar to the point whereas of the time of about 10 years ago, they were 52 or 53 pesos in the dollar.

Alex Gladstein: We have these like first-person perspectives of how money has just depreciated as a result of governments increasing their money supply and the impact that has on people is a serious one that often people in countries like mine, being an American, I don’t really notice so much, right? I do notice gas prices, real estate prices, but we don’t really notice it as sort of like the frog boiling in water issue. I was happy to get those stories as well as stories about how difficult it is to send money across borders and most importantly, to me, as a human rights activist, stories about intrusions on our financial privacy in the age of digital money, whereas before everybody used paper money for a long time or, at least, paper and metal money and most transactions were with their assets and there wasn’t a lot of metadata about what we were doing with merchants, right?

Alex Gladstein: There wasn’t really an ability to do that and even when credit cards were first invented, for decades, there wasn’t enough like big data analysis or AI tools that could actually make sense of all these things. But in the last two decades, that’s started to become the case and we’re definitely heading to a very, very Orwellian reality, some people are already there as in the case of China I like to describe. But the whole world’s heading there unless we preserve a digital form of cash, which is one of the reasons I’m such a huge fan of Bitcoin and what Bitcoin might be able to become in the future.

Stephan Livera: Fantastic. Jimmy, did you have any comments to add on that idea?

Jimmy Song: Yeah. One of the things that I learned during this was all of the stories and just how impactful of this was. I think I knew it in theory and it’s one thing to know it theory, and then to actually hear the stories and it connects a little bit differently, right? That’s why we’re hoping that this book comes across as, it’s one thing to know, “Okay, well, inflation is really theft in a different form or it’s redistribution or something like that.” But to actually see it happen, I mean, one of the …

Jimmy Song: I remember Timi told me, at one point, we’re talking about like the … I think we were arguing about the dollar hegemony actually, and Timi, at one point, says, and we were like, “Yeah. I mean, the …” Somebody said, “The US dollar isn’t that important around the world.” Timi is like, “Are you kidding me? It’s like the most important currency of my life and I lived most of my life in Nigeria.” I was like, “Oh, yeah. That’s right.”

Jimmy Song: It’s crazy to think, but that’s how pretty much everyone around the world for them like that’s how important the dollar is because it is sort of the standard.

Alex Gladstein: That was a big debate, right? Essentially, has the dollar hegemony been a positive force for the world? I think it was something that I hadn’t really wrapped my head around too much before. Obviously, Jimmy had I think in certain ways but like you can really make two good arguments. You can say that basically, the dollar hegemony has enabled like this sort of 50-year period of like unprecedented prosperity and commerce and et cetera, and you can also say depending on where you live that it’s ushered in like an age of reliance on a single point of failure and like unprecedented failures in local currencies over time as they struggle to keep up with that. I don’t know if Jimmy you want to add color to that too?

Jimmy Song: Yeah. I’ve been thinking about that quite a bit and there’s definitely a global Cantillon effect. I mean, we do touch on the Cantillon effect but this was one of the parts that got cut, which was that whoever gets to spend the money first gets a lot of the benefits and if it’s the dollar standard then who’s printing the dollar? Well, it’s the US. Who gets to spend it first? It’s the people in the US and people in first world countries. It’s the poor suckers in the third-world countries that get to spend that absolutely last and it’s no wonder a lot of those countries have a lot of the hyperinflation.

Jimmy Song: For me, talking about that … I mean, unfortunately, this got cut a little bit. I mean, we still mentioned the word hegemony in there and talk about how we’re all on that standard. But, yeah, there’s a lot of that that’s happening in the world that isn’t sort of in the consciousness of a lot of people with respect to, why is the US so successful?

Jimmy Song: Then, people say, “Well, US exceptionalism. There’s a lot of talent here. We just work harder, blah-blah-blah.” Some of that might be true, but there’s also this giant advantage that the US has with the dollar standard and it’s something that is I think a problem with money. It isn’t necessarily something that people know about.

Alex Gladstein: At the same time, I think something I’ve really been thinking about since writing the book is that like quite obviously, the dollar is like the hardest or soundest fiat money that exists. I mean, it’s something is very desirable for people who have really, really bad currencies that depreciate fast. I’ve been thinking about the fact that beyond my interest in helping educate and spread the word about Bitcoins that more people can understand that they can permissionlessly acquire this thing.

Alex Gladstein: It got me thinking about projects like that aren’t really related on a technology level to Bitcoin, but maybe similar in terms of getting a harder money in the hands of more people. Like Libra, which I’m sure people are worried about from a surveillance point of view but let’s face it. If something like 80 to 90% of Nigerians have access to Facebook and all of a sudden they can get essentially US dollars, what do you think they’re going to store their wages in?

Alex Gladstein: I think eventually a lot of these folks are going to realize they should acquire Bitcoin, but in the meantime I think some of these corporate projects are going to be interesting because they’re going to start mixing in people’s ability to acquire harder money and it’s going to cause some very interesting conversations in the world about what money is and where the money comes from and I’ve been thinking about that a lot since we wrote the first chapter of this book.

Stephan Livera: Yeah. That’s great. I think one typical thing that a fiat economist might say is, “Well, what’s the big deal with low and stable inflation? Don’t people just invest in equities and bonds anyway?”

Jimmy Song: Yeah. This was the topic of my talk at BitBlockBoom actually, and I got overshadowed a little bit by Michael Goldstein, but the whole idea behind like being able to store value, right now in the current system today there really aren’t that many good places to store value. They purposefully make it that way because the economists that run the central banks and so, they’re all Keynesians and they need velocity of money. They need everything to move constantly and as a result, if you park your money anywhere they don’t like that because that means that the money isn’t moving through the economy and causing prosperity somehow.

Jimmy Song: Bitcoin gives you sort of that parking place, right? It’s kind of like the game of Monopoly like towards the end of the game, you just want to be on free parking or in jail all the time because you don’t want to like land on somebody else’s property and pay lots of rent. That’s kind of the situation that you want to be, you end up being in is that pretty much any asset that you put your money in, it’s either risky or requires a lot of research or something to that effect where it’s hard to store your money.

Jimmy Song: Well, Bitcoin gives you that and it’s absolutely fair because it’s fungible, right? Like two pieces of real estate, very unfungible, two different stocks, very non-fungible, and there’s a lot of research involved in making sure that you get the better end of the bargain and all that. With Bitcoin, it’s fair, right? It all goes up at the same time or all comes down at the same time and that’s a very fair currency.

Jimmy Song: I think people will see more of its value as it goes and like Alex was saying, people will learn more about what hard money means, right? In a lot of third-world countries they already know the dollar’s very valuable and that that’s the absolute last thing that you spend, but once they learn about Bitcoin, Bitcoin will be the absolute last thing that they’ll spend.

Alex Gladstein: I think from a progressive point of view or sort of let’s say center-left point of view, I think what’s interesting is that a lot of people rally against, or rail against the current system being unfair, which it is, and as much as like, for example, you have to be like an accredited investor in the United States to invest in companies or you have to have a sizable amount of liquid to even buy blue-chip stocks and, of course, real estate, but with Bitcoin people around the world get an opportunity to permissionlessly, again, without needing to prove their identity or bank account acquire an asset that cannot be devalued.

Alex Gladstein: I think my appreciation for that aspect of this has grown a lot. Something else that was interesting that made it into the book from Human Rights perspective is, I think if you can picture like running a fiat economy kind of like a waiter with two gigantic plates that he’s balancing while he’s riding on a unicycle, right? It’s really, really hard to do and it really only is possible to even like do it temporarily if you have a free and open country that’s like not a dictatorship.

Alex Gladstein: I think one of the reasons why people are so dismissive or skeptical or uninterested in Bitcoin who come from places like the United States and northern Europe or maybe Australia is that they happen to live in one of those pockets in the world, the small pockets where there is relative freedom and property rights and free expression and separation of powers, but like that’s just not the case elsewhere and there’s like no separation between money and state like at all. Like, at least, like there is the appearance of it, if you will, or even more so than that in the countries I just mentioned.

Alex Gladstein: But like if you’re in Saudi Arabia or in Turkey or in Iran or Zimbabwe, et cetera, the executive, the dictator or the tyrant or the people who rule, they literally can just print more money whenever they want. There’s no check and balance against that and that leads to such devastating consequences. I think it’s only because I’ve had a lot of experience working with people who live under authoritarian societies that I’ve come to that particular appreciation.

Stephan Livera: That’s a fantastic point, Alex, and look, so obviously, I’m with you guys, right? I’m on your side, but a common objection or something that might come up let’s say that a Bitcoiner, a question that a Bitcoiner might have to answer, right? Someone who’s a listener, they might be trying to talk about Bitcoin and someone might come with this question, they might say, “Well, okay, well, it’s all well and good that you guys talk about Bitcoin but for example sake, how many Venezuelans have a phone capable of using Bitcoin and Lightning?”

Alex Gladstein: Yeah. That’s a great question. I’ll give you some numbers to give some context. According to a study done by the big telecom companies in the emerging economies, which is I think you know similar to what Jimmy was saying are like, well, you consider the third-world. In emerging economies by the end of next year, more than two-thirds of people in those emerging economies are predicted to own a smartphone and that’s pretty mind-blowing, that’s two-thirds of people in emerging economies.

Alex Gladstein: In Venezuela, access to a … I guess we could call it a dumb phone is very, very common, and a lot of people are like one step away from someone who has something like a smartphone or a computer at home and that has led to the situation where, and this seems very like Snow Crash sci-fi but like the amount of Bitcoin traded in Venezuela today, if you look at it from a dollar perspective is like many, many times that of what’s traded on the Caracas Stock Exchange, and that’s obviously just a shocking paradigm shift.

Alex Gladstein: I don’t think it’ll be the first country that ends up going through that transformation and probably, long term I’d be willing to bet that long term more Bitcoin gets traded in every country compared to the “stock exchange.” It may take 50 years but I’d be willing to bet that and we’re starting to see that world start to emerge which is one of the reasons I really wanted to write this book.

Stephan Livera: Fantastic, and how about … this is another scenario that I’ve seen come up in developing countries or emerging countries is they get confused between say the Petro or they confuse Bitcoin with all of this other cryptocurrency with these kind of cryptocurrency scam projects.

Jimmy Song: Yeah. That’s a big problem and this is one of the reasons why we wanted to write this book is to sort of give people the reasons, very logical case for Bitcoin with enough stories to make them remember all of the details. But, yeah, there are a lot of other books and there are a lot of scammers out there that are saying, “We’re the real Bitcoin, or we’re much better than Bitcoin,” or something like that and-

Alex Gladstein: Let me just add some color to that exact point based on what Alejandro told me. Obviously, Alejandro has been running with Joe Carlson and some other folks at IBO, a project to interview Venezuelans who escaped to Colombia about the way they use their money. It is really prevalent like Venezuelans know about the petro. It is really well-known and it is really unliked because essentially the government has tried to in some instances tried to pay people in it, instead of the Bolivar, right? This is actually something that’s happened.

Alex Gladstein: People are really confused about the difference between the petro and Bitcoin according to their research and this is like a huge problem. Getting back to Jimmy’s point, one of the reasons that we want to do this book and I have like a really awesome impact of the immediate influence we’re having in as much as we just got this email from a friend who said he reached out to his brother once he saw the book and he’s going to donate the Spanish translation as a contribution to us.

Alex Gladstein: We’re going to have a Spanish version of this book soon and we’re going to get it into Venezuela. My organization is pretty expert at doing this. We have for years smuggled flash drives of outside information into countries like North Korea and Cuba so we know how to do this. We’re going to have a mechanism for getting this book in different languages into some very remote parts of the world and I’m really excited to work on that.

Jimmy Song: Yeah, and I’m getting translations especially I think that’s going to be awesome and we’re right now … One of the things that we agreed as authors, which I think speaks to the heart of what my co-authors and I really want to do is we’re going to take a lot of the profits and put it right into translations, right? It’s not available in Farsi, let’s go and translate this thing into Farsi, get a high-quality Farsi translation and get it out there.

Alex Gladstein: By early next year there will be, let’s say by springtime next year, there will be Korean language versions of this book circulating inside North Korea. That’s pretty cool, right?

Jimmy Song: That would be amazing. Yeah. I’m working on a Korean translation but we’ll see if the same publisher wants to do it.

Stephan Livera: Very nice. Look, we’ve talked about sort of the monetary components of it but let’s also now talk a little about the privacy aspect of it as well. So, now I know Alex, you recently wrote a fantastic article on this and it’s related as well is the moral case for Lightning and privacy. Can you set the scene for us a little bit? What’s the problem with today’s payment system?

Alex Gladstein: Yeah. I mean, and this is definitely a forward-thinking piece because obviously, as your community knows, we’re not quite there yet with Bitcoin as a privacy tool, however, I do want to say, and I get into a lot of like conversations with Monero and Zcash people about this and they’re kind of like, “Well, Bitcoin is totally worse than everything. It’s so public.”

Alex Gladstein: I’m kind of like, obviously, not. Like obviously it’s better to have good operational security and use Bitcoin than to use like Bank of America or whatever. The government can just call the bank and get all of your information as opposed to having to hire a chain analysis company to like figure out what you’re doing. Obviously, one thing is harder than another right now and I think given the roadmap technically of where Bitcoin is going both on-chain and with liquid and Lightning and all these different second layer technology it’s going to get a hell of a lot harder.

Alex Gladstein: I do think it’s going to be a privacy technology and the reason that’s important is because even in free countries like I would say America, it’s a free country, a democracy, we have no financial privacy. It’s not just the Bank Secrecy Act, it’s also intrusion from a corporate perspective, and one of the stories I tell in the book is my own is like when I went to buy something recently with a credit card, not an online purchase like I used my Chase Visa card to buy something in a store and it happened to be like a pet store, I was buying some dog food and I bought some dog treats on it, like 20 minutes later after I left the store, I checked Twitter and I had received an advertisement for like an eerily similar dog treats, same shape, et cetera.

Alex Gladstein: This wasn’t because my phone had revealed my geolocation, that’s too broad. It knew exactly what I bought and I looked it up and lo and behold, and I guess it shouldn’t surprise those of us listening but Chase just divulges your payment data to everyone else when you use it as your payment process, right? Of course, I’m sure I signed to waive that right when I bought, when I signed up for the Chase credit card and all that fine print. I went back and I looked at it and I did do that.

Alex Gladstein: The fact is whether or not I technically legally agreed to it, I didn’t, and the vast majority of people who use credit cards don’t realize what’s happening with their payment data. That’s a slippery slope that leads to some pretty scary situations. I mean, if we allow that to continue without like checking it in some way, it will end up certainly in a more like Chinese situation where basically government and corporate kind of complicity lead to a situation where your payment data, which says more about you than your words, allows the government to have like a micro understanding of what you do during your day, and then can both like use carrots and sticks to kind of incentivize you to be loyal, as well as like punish you when you do something critical of the government and take away your financial freedoms like the story I tell about this young woman who literally just got like a message from a friend who got in trouble for smoking pot and like that alone, that little message that she sent led to her losing like a lot of her abilities to use the dominant WeChat financial service.

Alex Gladstein: That is something that could come faster than people think to a society like Australia or the United States where our governments aren’t so friendly towards cryptography and to privacy, and a lot less friendly than I think the average person think. We got to fight for these things, and I do think Bitcoin is like the best most feasible technology out there that gives us the roadmap to have private transactions where like I could conceivably in a year or two buy something on … For example, Amazon without reviewing my whole identity stack or go to a store and buy coffee or subscribe to a podcast or buy a book or make a donation to a political party or get a medical procedure again without revealing my full identity stack. I think it gives us the best shot and I think that’s why it’s so important to talk about.

Stephan Livera: What about the chilling effect as well? That’s another factor that we may in some ways self-censor ourselves because we’re afraid of what will happen if we do speak freely.

Jimmy Song: Yeah. That’s definitely happening. I would like to point out like with respect to all of this that if you read the whitepaper, the abstract, it speaks and I read this recently so it’s fresh on my mind. It speaks exactly to what Alex is talking about with the financial intermediaries and the reason why Satoshi Nakamoto made a lot, made Bitcoin was to take out that intermediary, was to take out that middleman that’s sitting in between every transaction, sort of censoring it, and adding costs to the system, making everything more expensive and so on.

Jimmy Song: There’s a whole censoring issue with fungibility and all that, which we could get into with Lightning. But to a large degree what Alex is saying is right. This is way, way better than Chase having all of your data or Bank of America having all of your data or Visa having all of your data, and all of that data just sort of sits in some database that’s like just ready to get hacked or turned over to the NSA or provided to some other government or something like that. It’s really a terrible situation when you have financial intermediaries.

Alex Gladstein: To give listeners a real-world example of why you would want financial privacy or the chilling effect that you speak of. Think about in Hong Kong right now when people are wanting to go protest peacefully against what the government is doing in terms of like acquiescing to the Chinese Communist Party, right? They want to go protest in the street so they use the public transit system because it’s a massive city, it’s a super city and people use public transit to get around.

Alex Gladstein: They get to the subway and they take out their octopus card to pay, and then they like hesitate and they realize, “Wait. If I use this card the government is going to know exactly where I’m going and they’re going to know if I get off at the stop where the protest is today.” What started to happen is that like normally they were like never cues for like people buying burner kind of tickets where you’d use cash to do it, but as the protest started, there’s this one reporter, Mary [Heuy 00:38:12] who reports for courts and she’s been like on this case like, and sharing this on Twitter, which has been fascinating.

Alex Gladstein: But there emerged massive queues of people to like buy these like cash, use cash to buy these tickets so that they wouldn’t have their location tracked, and then what Hong Kongers started to do was like leave gifts, like leave basically topped up burner tickets as gifts on top of the machines. It’s fascinating. That’s something that is a really clear demonstration of if you want to exert your political rights in a society, you’re going to need privacy, and think about it this way.

Alex Gladstein: In 10 years, Hong Kong probably won’t have paper metal money, right? We really, really need to develop the tools to continue to allow us to be full citizens now. I mean, if we wait five years it’ll be too late.

Stephan Livera: Fantastic point. I might just add there as well. There’s also the risk there of collateral damage. You might not even be going to the protest, you might just happen to work in that same area and now you’ve been swept up into that net.

Alex Gladstein: Yeah. Absolutely.

Stephan Livera: Another thing that let’s say my listeners or you guys might face when you’re talking to people is they might say, “Hey, I’ve done nothing wrong. I’ve got nothing to hide. Why should I care about your Bitcoin thing?”

Jimmy Song: I mean, why do you lock your doors at night, right? There’s a lot of people that don’t sort of value security or privacy until they’re faced with their own security or privacy being violated. First of all, they’re more or less the same thing. If your privacy is violated that’s a security leak. Whenever somebody knows that you have like a lot of money or a lot of Bitcoins or something valuable and some information about you can always be used against you in some security setting.

Jimmy Song: It’s really the same question as why do you lock your doors at night? Well, you lock your doors at night so people don’t walk in and take your stuff. It’s your information, especially about who you are and what you do and what you buy and what you buy tends to tell a lot more about you than almost anything else. If you reveal any of that stuff, it can be used against you in one way or another to manipulate you, to cause you to do certain things, to take stuff away from you, to blackmail you, whatever.

Jimmy Song: There’s so many ways in which that information can be used as a security threat. From a technical perspective, privacy leaks or security leaks, like people have security because there are bad people in the world and including oftentimes our own governments so you have to protect yourself.

Alex Gladstein: It may not be so obvious in an open society but I’ll read a quote from Phil Zimmermann, the famous cryptography pioneer that Tuur actually shared today on Twitter. “If we do nothing, new technologies will give the government new automatic surveillance capabilities that Stalin could have never dreamed of. The only way to hold the line on privacy in the information age is strong cryptography.”

Alex Gladstein: He said this in 1991 and it remains equally as important today. I think something that relates for this as Jimmy was saying kind of security and privacy kind of blend together, is someone once told me this and I thought, it’s always stuck with me. They said something very simple. They said basically that like ever since the age of the caveman that the person with the bigger stick could kind of like beat the person with the smaller stick and take their stuff, right?

Alex Gladstein: Bitcoin is a great equalizer here. Yes, of course, okay, the wrench attack or whatever, but generally speaking Bitcoin is way more … sort of a confiscation resistant than any other asset, and it’s way more liquid than like something like gold or real estate. It can really like allow you to have much more sovereignty over your belongings and I don’t really see why that should matter whether you live in Oregon or whether you live in occupied Crimea. This is a really important thing for everybody.

Stephan Livera: Let’s talk a little bit about the possibility with Lightning and privacy as well and I think I really enjoy in your article the moral case for Lightning. Alex, you were talking a little bit about what it might look like in 2025 or 2030. Can you paint a little bit of that picture for us?

Alex Gladstein: Yeah. Well, something I’ve been thinking a lot lately about is the gift card economy. Even in the United States like a large percentage of people don’t have full access to financial services or don’t sign up for a bank account or don’t use it, right? When you walk into like a pharmacy or supermarket there’s a really large selection of gift cards which people use cash to buy, and then they buy their online purchases that way. Of course, this affords … this is not desirable from like a perspective of, “Well, if they had more money, the unfortunate thing is they would make tradeoffs and they would tradeoff that privacy for convenience.”

Alex Gladstein: But the fact is when you live that kind of lifestyle, you’re very private. When I’m buying things with a gift card that was purchased with cash and this is obviously a Bitrefill. The company is kind of like a strategy here, and people around the world use Bitcoin to buy Amazon gift cards, for example, using Bitrefill and they buy stuff like Venezuelans do this and it’s really interesting to think about, but my whole point was that that’s currently seen as morally and legally fine by police, by regulators, by everybody in the United States.

Alex Gladstein: This is cool that you can do like small retail transactions, relatively small retail transactions with like basically total, pretty much total privacy. I just think that it should be possible for us to maybe working with groups like Coin Center basically, convince regulators like, “This is not a problem. People should be able to do daily small transactions with basically total privacy.” I think that if we just do it the right way this will be an evolution of that.

Alex Gladstein: Meaning, using Lightning to do retail payments with Bitcoin, for example, will be an evolution of like the gift card economy, which is, of course, an evolution of the previous economic world where we all use bearer assets. I mean, I don’t know what your thoughts are on that, Jimmy.

Jimmy Song: I mean, I think that this is the world that Satoshi Nakamoto envisioned. If you read the whitepaper, again, it’s all about not having that intermediary there, and in a sense, with surveillance they become sort of like an intermediary and the party that’s sort of like looking in. They have information that they maybe shouldn’t and the this is sort of like the last part of fulfilling that, which is taking even that little window away and that’s mostly on the blockchain obviously.

Alex Gladstein: The reason this is possible, and I was listening, Stephan, to one of your other podcasts with some Lightning developers this week, and I think one of the reasons this is possible is like in the current financial system the incentive is just to sort of make as much money as possible and figure out how to like exploit as many people as possible. I mean, to be brutally honest. I think we all recognize that.

Alex Gladstein: I mean, that’s what the goal is to get profits. But the people who are designing like Lightning infrastructure, for example, are actively trying to figure out, for example, how to reduce centralization in the network. That’s a huge goal of theirs, right? That’s such a difference-maker. The people designing this financial infrastructure have totally different values and goals than the people designing the existing one. It just fills me with great hope.

Jimmy Song: The game theory behind Bitcoin is just so different than almost everything else because the previous, the current financial system is built so that everybody in between, if I’m sending some money to somebody in the Philippines or whatever, if I did that through the traditional system, like there are so many people that take a tiny cut, right? It could be like 0.1% or lower but there are so many people and they make all of their money on the volume that goes through, and it’s a tax on everybody.

Jimmy Song: They don’t really add anything per se. I mean, to some degree there’s maybe some justification with dispute resolution or fraud investigation or something like that, but really their game is to get as many transactions through as possible without regard to the quality of the transactions or whether or not those actually are beneficial.

Alex Gladstein: Again, it’s not just privacy. I mean, I was talking to last night who’s from Zambia, right? I’m in San Francisco at a dinner and he’s telling me that … I’m like, “How do you send money to your family?” He’s like, “Oh, I have to use Western Union. It takes several days and it cost me about 13%.” I’m like, “Wow.” Okay, so not only is it very expensive, not only does it take a long time, but you’re also ceding all power and control to these like arbitrary companies in the middle.

Alex Gladstein: I mean, and we were looking at it and like there is a market for Bitcoin in Zambia, obviously. You can go and you can buy and sell Bitcoin there. He is now looking into this and I think that’s the thing is like we’re so early that like the vast majority of people who could actually use Bitcoin to their benefit simply just don’t know about it yet and that’s one of the reasons I hope we can get this book out there as far and wide as possible.

Stephan Livera: Yeah. That’s really excellent. That’s a great example, Alex, and let’s talk a little bit then about what’s recommended for the listener or maybe not my listener, but say people give it to their friends and they’re new and they’re trying to come into Bitcoin, what are then, what are the next steps? Should they go consume further other resources or, by the way, thanks for listing my podcast in the recommended resources. I appreciate that. What’s your hope then for someone who reads the book, and then they do afterwards?

Alex Gladstein: Maybe Jimmy, you can give like the hope for like the more technical person and I can give the hope for the more kind of like non-technical person?

Jimmy Song: Yeah. Hopefully, it gets people thinking. Number one, at least, here are my goals, right? Number one, I want them to think about money differently, see the world a little bit differently, whether they’re from the United States or from Lagos or Caracas or whatever. I want them to see the world a little differently and say, “Okay. Well, money actually does, is broken in many ways and this is why and this is how Bitcoin fixes things.”

Jimmy Song: Now, if they are inclined, I want them to have the opportunity to buy Bitcoin but that might not be possible wherever they live. In which case, I mean, like go bring it in and work with people to make that happen or learn more about it, especially technically there’s plenty of resources. Hopefully, they can go and learn how to code in it so that they can maybe bring an exchange through wherever they’re at and so on.

Jimmy Song: But the big thing I want them to walk away with is that the current system’s majorly broken and that there’s a solution out there in Bitcoin that can really change things for the better.

Alex Gladstein: Yeah. I mean, I think, again, the target for me is going to be people, maybe who work at big tech companies, for example, and I’ve talked to people who are going to help us get this book into Microsoft, into YouTube, et cetera, and just kind of get the conversation going. I’m going to be giving a talk at Google at some point in the next few months through the help of some friends about the book. I mean, I think people building the current technology infrastructure, once they start to start to see the real value of Bitcoin, I think it will really change their viewpoint on a lot of things including, maybe hopefully how they’re building what they’re building.

Alex Gladstein: I mean, it’s not a zero-sum game. It doesn’t need to be all or nothing. If education about Bitcoin makes people want to add more privacy and sovereignty into whatever they’re building. That’s like a massive benefit. I hope that, as Jimmy’s saying, it changes their perspective a little bit. We intentionally tried to make the book, not like a how do you buy Bitcoin book. I don’t necessarily want people to go and buy a bunch of Bitcoin after reading the book.

Alex Gladstein: What I do want them to do is go down the rabbit hole that I went down which is, “Wow. This is really cool. Let me spend the next year or two of my life learning about this thing as a hobby.” Be immeasurably richer mentally and sort of spiritually and intellectually as a result of that. I think hopefully, the book can do what I can be what I didn’t have when I was starting out three or so, let’s say three years ago, which is a clear and concise like, “Here’s why Bitcoin matters.”

Alex Gladstein: Whereas I had to root through dozens of nonsense videos about blockchain. I mean, even like Harvard Business Reviews thing is like all nonsense. All of it is just so misleading and so confusing and if you don’t know that, if you don’t have Jimmy’s perspective or whatever, at first, it takes so many months to gain that knowledge. It’s like very hard-won knowledge, right? I want to make it a little lower hanging fruit for people.

Stephan Livera: Obviously, it’s early days so far, but what has the reception been in terms of reviews on the book and how’s it going?

Jimmy Song: Well, so far we have three reviews on Amazon. They all seem very positive. I gave out copies to a bunch of my students and most of them have liked the book, a few had liked corrections, which we’ve incorporated. The reception has been really fantastic so far. I think it was number one in digital currencies category in Bitcoin. Beating the Winklevi book and many others that had a lot more money and marketing behind it.

Jimmy Song: I’m really excited. Obviously, being on this podcast I think will help out. Hopefully, a lot of your listeners would buy it for their parents or their uncle that’s curious about it. I mean, someone was telling me once like when you start talking about Bitcoin to somebody, there’s already like a tax that in time that you’re sort of committing to by talking to them about it, because like they’re going to come to you to explain about all sorts of stuff.

Jimmy Song: This book hopefully reduces that cost or burden on the person explaining by saying, “Okay. You know what? Just go read this book. It’s pretty easy. It’s 115 pages and it’ll answer a lot of the questions that you might have and maybe some that you haven’t even thought of.” That way, we could make the spreading of this knowledge a lot easier and less burdensome.

Alex Gladstein: Yeah. I hope it can be a sort of a phenomenon. I’ve already observed something that’s really interesting. People have told me they bought like 15 to 20 books for their office or for their friends or my brother just messaged me and said, “He’s going to buy.” He’s getting all his friends to buy a copy. That doesn’t happen normally with books.

Jimmy Song: I wish that happened with my book, man. Nobody buys 20 copies of my book.

Alex Gladstein: Well, it’s going to happen with your next book, with your current book, and that was the idea that it can be this like little gifts kind of, and the fact that it’s easy to read and short and comprehensible to someone who reads a newspaper, I think is really going to help. Again, people that are elderly, people that are very young, high schoolers like I think this is going to be something that I’m handing out like candy, right?

Alex Gladstein: At the end of the day, even if someone leaves unconvinced, that they finish this book and they’re unconvinced, they’re going to have their head spinning with all kinds of interesting provocative questions about the way money works. Even if we don’t convert them to someone who’s like a “Bitcoin evangelist,” which I certainly don’t expect. What I do expect is that they leave the book and they put it down and they think about the world a little differently and then they have some big questions that they need to answer and that would be a victory for me.

Stephan Livera: Yeah. I fully agree with that. I mean, from my perspective, it’s a short book. It took, depending how fast you are as a reader, it’s maybe two or three hours. It’s a pretty cheap book as well. You can buy at Kindle for like $7 or $8. I definitely encourage my listeners to have a read. Obviously, read it for yourself. Make sure you’re comfortable with it, and you like it yourself. I’ve had a read of it and I would be very comfortable recommending this book to a new coiner or a person who is not that knowledgeable about Bitcoin.

Stephan Livera: Jimmy and Alex, why don’t you tell my listeners where can they get the book?

Jimmy Song: Well, the first place that you can get it is Amazon and depending on your country, it might be a little bit more difficult to find or less difficult to find. But search for The Little Bitcoin Book. It’s available on Kindle and it’s also available in paperback. I believe you can buy it on barnesandnoble.com. I’m still kind of confused as to how it got on there because we did everything through Amazon, and yet it’s on Barnes and Noble somehow.

Alex Gladstein: That the power of modern publishing is incredible and just as a note, when you normally sit down to write a book as Jimmy knows, and as people listening who are authors know this is several year process usually for people. The idea that we could take and synthesize like a really powerful idea and basically get it done in like two weeks from soup to nuts is just such an exciting thing to do. It’s really empowering the way that you can do this today.

Alex Gladstein: We can rail against Amazon as this corporate behemoth but what it does make possible is like the democratization of publishing, right? I don’t have to go and like bow down to HarperCollins or whatever like I might have had to do 40 years ago to get anyone, like literally like anyone in the world to be able to buy this book. I mean, now we may not be guaranteed placement in certain stores but if we’re effective enough with a media campaign, which I think thanks to you and many other inquisitive journalists I think we will be. They’ll kind of want to stock this book because people will buy it. That’s kind of the idea.

Alex Gladstein: It’s a very exciting to be alive in this time when like we can just publish an idea and get it out there so fast. Amazon, Barnes and Noble, and pretty soon, I think, Jimmy, some of us, some of the co-authors are working on a way where folks will be able to go to our website, which I believe is like thelittlebitcoinbook.com and buy copies from us directly with Bitcoin and Lightning. That I think should be up and running in the next couple of weeks so keep posted for that.

Jimmy Song: Yeah. I love how everything’s like democratize like 30 years ago, Stephan, you would have had to like beg every radio station to get on. Now, you have your own podcast that’s very popular around the world, right? Like similar thing with YouTube, nobody has to go and beg people, beg TV stations for a slot or something like that. You can make your own show. Same thing with books, same thing with software, same thing with almost everything. Even money to some degree like we have this decentralized money now, and it makes it … It’s empowering. It’s personally empowering and that’s a very good trend.

Alex Gladstein: Well, the first stage was building that infrastructure, the internet, and Amazon, all these things. The next stage is being able to interact with these things in a way that doesn’t violate our privacy, and then that’s what I really believe in Bitcoin as something that can be a possibility, whereas before the invention of Bitcoin, I don’t think it was possible. I’m pretty excited about this idea of democratizing knowledge and the ability for people to publish work like ours, and the ability for people to buy this book without, again, disclosing their entire personal history.

Alex Gladstein: I mean, I think that that’s going to be really fun, because unfortunately, folks, right now, when you buy it from Amazon, unless you’re using a gift card or some intricate kind of like method, you’re probably alerting many, many third-party companies that you’re buying our book, but it’s okay for now.

Stephan Livera: We’ll allow it for this book. Yeah, so look, guys, I think that’s been fantastic. Lastly, before we let you guys go is well just let the listeners know where they can follow you and find you.

Jimmy Song: I’m on Twitter at Jimmy Song and my website is programmingbitcoin.com. I do education and other stuff. Yeah. That’s where you can find me.

Alex Gladstein: I’m at my last name Gladstein, G-L-A-D-S-T-E-I-N on Twitter, and you can follow me there as well as my organization, the human rights foundation, @HRF. We also have a conference series called the Oslo Freedom Forum, which is at OsloFF on Twitter, and we have upcoming events in New York and in Taiwan and in Norway and in Mexico that you can learn about. I also do some teaching about Bitcoin for Singularity University and I’m going to be coming to Sydney on October 22nd to give a talk about Bitcoin and the future of money. I hope some of your listeners who are Australians can come and hang out with me when I get there.

Stephan Livera: For sure. That’ll be great. That’s pretty much it for us so once again, thank you for joining me, Jimmy and Alex.

Jimmy Song: Thank you for having us.

Alex Gladstein: Thanks so much for having us on.

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