Episode 165 - Peter McCormack of the What Bitcoin Did Podcast
Today’s guest Peter McCormack is the host of the highly acclaimed What Bitcoin Did podcast. We cover the recent history of getting into Bitcoin with infighting around block sizes and custodial solutions to the near future where Bitcoiners are becoming more confident in achieving their goals of rebooting the world economy on a solid foundation.
About Peter McCormack
Peter McCormack is the host of the What Bitcoin Did Podcast.
The What Bitcoin Did Podcast is a twice-weekly Bitcoin podcast where host Peter McCormack interviews experts in the world of Bitcoin development, privacy, investment and adoption. Launched in November of 2017, the podcast has grown to over 100 episodes with a guest list that is a testament to the diversity of knowledge and opinions that represent the broader Bitcoin community. More
Links
Also mentioned was the Rich Roll Podcast
And the 1999 Book The Sovereign Individual which predates Bitcoin by a decade but predicts its properties
Related Episodes
Episode 157 on the coming “Financial Tsunami” that will propel Bitcoin into the mainstream
Episode 112 with Naomi Brockwell
Episode 59 on Bitcoin in Venezuela
Transcript
Max Sklar: You're listening to The Local Maximum Episode 165.
Time to expand your perspective. Welcome to The Local Maximum. Now here's your host, Max Sklar.
Max: Welcome everyone, you have reached another Local Maximum. I'm really excited about today's episode. Another Bitcoin episode today, an important Bitcoin episode. You're gonna love our next guest, Peter McCormack, one of the most important Bitcoin podcasters out there. He interviews all the industry leaders in Bitcoin, from the Winklevoss twins to Michael Saylor, to the CEOs of the top Bitcoin companies like BlockFi. And we're going to talk about a number of topics.
But first of all, it's probably no surprise that I have been focusing more and more on what's going on in the cryptosphere recently. I mean, I started focusing on the crypto sphere, in Bitcoin, when I first started the program, but it combines all the things that we talked about here in The Local Maximum, whether it's engineering, thinking probabilistically to emerging technology, thinking about what the future is going to be. But also we're going to talk about today, the newfound confidence that Bitcoiners have that we're going to win. And I want to talk more about this on the future Local Maximum episodes, because this is the biggest fight of our generation, essentially, it is going on in slow motion, like, at first I'm like, okay, it's a great investment. And then I go to, oh, my God, it's, it's gonna change the world. Now. I'm like, Okay, this is like the final clash of civilizations, like what, you know, the system of fiat currency has gotten out of control.
So anyway, I just spiraled out there with all of all of the reasons why I love this topic, and I want to talk about it more. But today, so today, I've got Peter McCormack started his What Bitcoin Did podcast. A few years ago, we're going to talk about, like, you know, what it was like to start a Bitcoin podcast in 2017, we're going to talk about the fork wars dealing with, when you jump into the Bitcoin arena, you will, you get swarmed by a bunch of people, usually smart people with very strong held opinions. And it's a rough arena. I'll talk about, we'll talk a little bit about that. We're going to talk about the tension between kind of the old school, do-it-yourself bitcoiners, who, you know, want to be in possession of 100% of their Bitcoin, and then, you know, the new applications out there, like, like BlockFi and so forth, where, you know, you can earn a rate of return or the question of, hey, is having a custodial service okay, because not everyone can hold their own keys. All those are questions that I think need to be further discussed. We're going to talk about a little more today.
And then finally, once again, I mentioned this before, why we think we're going to win, the Bitcoiners that is. And why this is the new emerging global currency. Okay, so with that, now we go to Bedford in the UK, proclaimed by today's guest as the Bitcoin capital of the world. The host of the What Bitcoin Did podcast, Peter McCormack, you've reached The Local Maximum. Welcome to the show.
Peter McCormack: Max, good to see you, man. Thanks for having me on.
Max: Always great to have a fellow podcaster on the show. I've been listening to your podcasts. I mean, I'm sure I've heard about it for a little longer, but I've kind of been rediscovering it diving into it for the last few weeks. What Bitcoin Did. Great work, I feel like you have some really big guests, some people like at the forefront of some of the biggest Bitcoin companies so and and they just have fascinating things to say. It's not like, you know, you could invite some CEOs on and I could imagine they're really boring, but they're not. You have some really, really fun discussions on that. So let's, I guess I just want to start by asking you a little bit about the podcast. I saw that you started it at the end of 2017.
Peter: Yeah, like October 13, I think? No, November.
Max: Okay. Yeah, yeah. And I noticed like okay, mine started like a few months after that. So not that far off. There was some crazy stuff going on. Well, there's always crazy stuff going on in the Bitcoin space but back then, it was some crazy, there must have been so much interest because we had that run up in price from like $200 to $20,000. And in 2017, we had those forks happening which seemed so contentious with Bitcoin cash. So tell me about when you started the podcast, were these issues at the forefront? Were there, did you see like a flurry of new interest? Like was that what started or something else?
Peter: What dude, the reason I started is, I first discovered Bitcoin in 2013, but I didn't properly look at it. And I didn't really pay attention to it. I didn't know what it was. I just traded a little bit on a trading website. And then when it crashed, I was like, “Whatever, forget about it.” And then I rediscovered it right at the back end of ‘16 start ‘17. And I was and when I discovered it, I was on Coinbase. And also had a theory and now I was like, what is this stuff, and I was out of work. I used to work in advertising, my agency had kind of failed. We had eight great years, and then we just had a bad year. And rather than try and keep it going, we decided just to wind it down and walk away with the money we've made, which wasn't a lot. But it was enough to have a bit of breathing space.
And so I wasn't working, but I didn't need a job. And I was looking at this Bitcoiner theorem thing. I was like, this kind of sounds interesting and took a little bit of a deeper look. And I just said to my dad, I said, look, I think I'm gonna buy some of this. And it's interesting. So I bought about $30,000 worth at the time, which was quite a bold move.
Max: Yeah.
Peter: And then I just couldn't stop looking at it. Like most people, kind of went really deep bore every old coin there was like one point. I probably had like 50 old coins and everything started going up and going crazy. And quickly that 30,000 became over 100,000, then over half a million and then just all went crazy. But I knew I didn't know what I was doing in the trading. And I didn't like it at all. And I coincidentally, through a weird set of events, ended up getting to know this guy called Rich Roll who's a podcaster. So it's like this vegan athlete, cultural runner. And I was out in LA, visited him and I said, look I think I'm, I think I want to do a podcast. I like what you're doing. I like your lifestyle. I think I want to do it. And he was like, okay, here’s the equipment you need, and you need to go watch the Pat Flynn course. And then, I went on Amazon, bought the equipment. And I pinged somebody, and three days later I recorded my first interview.
But what my problem was, is like, I'm not a smart person in terms of understanding economics or technical things. I'm more of a creative. I understand sales, I understand marketing, and sales storytelling. I don't really understand the technical subjects. So I was like, here’s what I'm going to do, I'm going to make the show where I get all these smart people on and I ask them questions. But I could have done with having the show for about a year before the fork stuff happened, because I was there. All the people arguing about it had been in Bitcoin for a long time, and they kind of understood the key issues. I didn't. So I was just like this kind of a moron with a flamethrower going around,
Max: That’s like jumping into the deep end. But the before it stuff is overwhelming, I think for anybody.
Peter: I get it now though, like if I was doing, if it happened again now, I would know my position, I would stick to it. But at the time, I was like, well, I see your point. And I see your point. And I don't really know which is right. And therefore I was navigating all this stuff whilst learning as I went. But the show, the show managed to consistently grow quite quickly from when I launched it. And I think the reason the show's always done well, is it I mean, there's a number of reasons I would put to it, but one of the main reasons is just, I just get people on and say look, I don't understand that. Can you explain it to me? And while there's a lot of technical, competent people out there. I think there's a lot of people like me who go through the same. Because I always say look, there's two types of podcasts out there. There's the smart guy interview and the smart guy. There's Lex Friedman sat down with Eric Weinstein and they'd like getting to sit and have a deep conversation about something and I'm going to understand 15-20% of it. And then there's the Joe Rogan side who gets a smart guy and it gets him to explain it, and I always feel like I'm on that side. I'm like, I'm gonna let you do the talking and get you to explain it. So yeah, so I was, what ended up happening is I got a lot of stick on Twitter, a lot of real hardcore Bitcoiners were pressurizing me into a certain direction. Which I get now but at the time I was like, fuck you, I don’t know if I could swear on your podcast. I don’t know what I’m doing, blah blah blah, and it was a real kind of baptism of fire. And looking back...
Max: Yeah, it's like all of a sudden you have different teams asking you to join their team. It's like, oh my God this is gonna create problems, I don't know what to do. So where, it's funny like what ended up happening at the fork. I'm guessing you were just on, I’m guessing now looking back here just on, “hey, playing Bitcoin’s side, we didn't need to fork.” Is it that simple? Or…?
Peter: Well, it's kind of more complicated than that, like, a lot of people still got like PTSD from those forks. That main form could have been the end of Bitcoin. So to explain to your audience, I don't know how much they know about Bitcoin, but I'll try and explain the simplest way possible.
Max: Yeah.
Peter: Bitcoin is a financial system. It's a financial protocol. And essentially, I can send you Bitcoin and you can send me Bitcoin. And when we're sending Bitcoin, it goes into something called a block, and most people if they've heard of Bitcoin when heard of blockchain, but essentially, it's exactly what it says. Each block builds on top of the next block, and on top of the next block. And that's all that Bitcoin is, is a block of transactions on top of the next one. And from all those blocks, you can tell who has how much Bitcoin and who sent who to what. The thing about the block is, is at that time it was one megabytes in size. It still is now, but there's this block wide thing, but that makes it more complicated. Let's just say it's one megabyte in size. That means all the transactions use little bits of data, once you hit one megabyte, that block is full. And therefore you can't get any more transactions into it. So you have to wait for the next one. And if there's a black backlog, you end up paying higher fees to get your transaction into the block.
What, let's say there's a second group of people, let's call them the big blockers, let's say there's two groups, there's a small block and the big blockers. The big blockers said, “Listen, we need Bitcoin to scale. We needed to be able to take on more transactions. So to do that, we need to increase the size of the blocks, we need to make it two megabytes or four megabytes, because that means we can get more transactions in, the transactions will therefore be faster, and they will be cheaper.
So when you first hear that you're like, “Well, that makes sense. Why wouldn't you write more transactions? Why wouldn't you want them faster and cheaper?” But the people on the small block size would say, “The power of Bitcoin is that it is decentralized.” You can run a node, I can run a, basically you can have a copy of the blockchain, I can have a copy of the blockchain, anyone can have a copy of the blockchain. And the great thing about that is it has this property called censorship resistance. Which means if I want to send you Bitcoin, nobody can stop me. And if you want to send Bitcoin to WikiLeaks, who were censored by MasterCard, and Visa and PayPal, you can still do it. The reason it can do that is because it's decentralized.
The big threat to decentralized money is government. They're not liking it. And once, they wanted to switch it off. So one of the precursors to Bitcoin is something called DigiCash. That failed because it was centralized. Bitcoin is decentralized. So if you want to run a node, you can get a Raspberry Pi, and an SSD, a hard disk and a few other components. And you can plug it into your computer, you can download the blockchain. So the total data so far, I'd have to look it up. But the entire 12-month, 12-year history of Bitcoin is around, I think it’s around 380-420 gigabytes. So when you think about...
Max: ...everybody's transactions, all of mine, all of yours...
Peter: ...from all of time. Yeah. So what's really cool about that, is that you can get one terabyte...
Max: Situation messing around.
Peter: Yeah, well, you can get a one terabyte SSD and a Raspberry Pi, and you can whip up a node. Now, if it was two megabytes, you may be creating, putting more data on then, and accelerating the growth of that blockchain. For example, another cryptocurrency some of your listeners might have heard of, is called a Theorem that has a full amount of data on its blockchain. And I think it's about four terabytes in size right now. That's going to be very difficult for anyone to run a node. So the two sides were essentially, one saying we need to focus on keeping Bitcoin decentralized, and everything else, forget about everything else. And another side saying, well we want to grow this for business. So this big war kind of happened, it went on for years and lots of disagreements. There came a point where there was going to be kind of a compromise. But the compromise wasn't something the small blockers really liked. So in the end, there was something called UASF which people can look up; it's quite complicated, won't go into now. That actually kind of stopped the fork happening. So what happened is Bitcoin carried on with one megabyte. Now, despite Bitcoin carrying on as one megabyte, other people can still go and create their own forks and they did. We got Bitcoin cash, and then we got Bitcoin SV and we got Bitcoin, Diamond and Platinum and all kinds of different Bitcoins. But the original Bitcoin stayed as a one megabyte. Is that a good enough explanation?
Max: No, yeah, yeah, but it's interesting to me, because I remember at the time when, you know, I was like, okay, there's this there's this mainline Bitcoin you know, for lack of better term, I don't know Bitcoin classic or Bitcoin Core, some people like, I was like, “Okay, I'm gonna stick with this,” as you know, from my technical experience, I guess that their strategy kind of makes sense to me, but I wasn't sure they were like Bitcoin cash supporters big blockers saying, “Hey, we're just a better technology, we're more scalable, and we're gonna overtake them.” And so I'd have nightmares were like, maybe that does happen. I was scared of it. Like, I don't know, because I sort of picked one horse. I mean, I guess I have, you know, some unforked coins. But still, it's like, you know, I wasn't that sure if myself and you know, a lot of the Bitcoiners were absolutely sure that their side was gonna win.
Peter: See, I'm sure now. And maybe that's the benefit of hindsight. But like, I look at it now. And I spent a lot of time trying to understand Bitcoin. I've traveled around the world, I've been to Venezuela. I've been to other parts of South America, I’ve been to Asia. I was meant to go to Africa, but we had COVID lockdowns. But like, I spent a lot of time going into Alex Gladstein from the Human Rights Foundation, who talks about Bitcoin usage around the world. And what I realized Bitcoin is, it's really important that Bitcoin stays as maximally decentralized as possible. There is no specific benchmark, but there is this directional thing. Directionally he’s trying to become more decentralized, and he's trying to be maximally decentralized. And those compromises on block size are not worth it. That's not to say in the future it won't happen. But the moment, right now, Bitcoin is still working very, very well, at one megabyte in size.
Max: So what you know, I've covered Bitcoin use in Venezuela on the show, and one of the things I'm having trouble wrapping my head around, I've never been there is like, how much are people actually using it? Because, you know, I feel like a lot of people, even in the US, smart people are just like, “Oh, I can't be bothered. It's too complicated. Blah, blah, blah,” even though it's pretty easy on something like Coinbase these days, but like, you know, are a lot of people really just getting involved in it? I see all the Bitcoin ATMs at the gas station. And I'm like, well, well, who's using that? You know, somebody must be?
Peter: There's a good question. It's why I wanted to go out there, because you often hear is, Venezuela is the perfect use case for Bitcoin. I was like, well, I want to go and see I want to understand it. So I firstly, when–
Max: You go there, and you tell someone like where can I get some Bitcoin? You know what, like, and I'm not saying it's not something bad about the average person, the street in Venezuela, but the average person on the street is just not going to know anywhere, I feel like.
Peter: Well, look, it's a mixed picture. So I first went to Colombia, and I went up to Cucuta, which is the border with Venezuela. I wanted to see these border towns because I heard they're crazy. And like it was insane. Like every day, people are piling over the border just to buy basic necessities: toilet roll, biscuits, female sanitary products, because they can't get them within Venezuela, right? So that was happening, or they're coming over to get work. But basically, the people coming over it, just poor. Really fucking poor and struggling to get by I mean, most of them are trying to get work on the smuggling routes. Basically, the paramilitaries control the smuggling routes back into Venezuela, and people are trying to get jobs smuggling goods back because there are certain things you're not allowed to bring to the border. But I went into a class run by a charity. And it was there to teach people about Bitcoin, which was fascinating. But I knew pretty much nobody there was going to be into Bitcoin. Some of them didn't have a phone, or they were sharing phones, or they didn't have data plans. So it's a valiant effort, and it's a valid idea. It just felt wrong.
When I went into Venezuela itself, again, a mixed picture. When you go into the slums, absolutely no use: these people are living on a couple of dollars a year, basically between $3 and $5 a month. A Bitcoin transaction right now and the first block is like $15 to actually process it, so it's no good. Where Bitcoin is useful right now is within the middle and upper classes. So I spent some time with a guy who runs a tech company, you know, he does okay in Venezuela. What he does, he keeps all his money in Bitcoin. And then every week when he needs, when he's run out of bolivars, which is a local currency, he just transfers a bit of Bitcoin into bolivars. And he does that because he needs the bolivar to spend, but he holds his money in Bitcoin because the bolivar has inflated so much, so that's what he can do. So there is definitely a use case there. There is a use case for people trading. And there's a use case for people getting money into the country. It's certainly being used. But there are an awful lot of people who are very poor in Venezuela and it just, right now, I don't see it solving that problem for them straight away.
The other thing is, it's not generally the culture of saving either. People earn and spend. Most of the time they're thinking about “What can I, what meal am I going to get today?” It's very much like a hand to mouth. So it's not a no, it's not a yes, it's just a mixed picture.
Max: Right, right. So you mentioned before, you were buying all these old coins. All right. Well, I get the sense from your website, you're not still into them as much. Are you more sympathetic to the maximalist position? What changed your mind on that?
Peter: Well, I am. So I mean, I was kind of bullied at the first. I'd say bullied jokingly. I got a lot, and so when I was talking to a Bitcoin cash person about to do an interview, I got a lot of pressure again, and a lot of the time when I released shows where they weren't maybe a Bitcoin show, I get people say, “Oh, you're just a shit quarter, blah, blah, blah.” And I would say, “No, no, all this technology is useful.” And then, God, it was early 2019, maybe late 2018, I decided to just go Bitcoin only. Just focus on Bitcoin. I also sold all my old coins, I mean, I made and lost a lot of money on them as well. But there were a few things that kind of made sense to me with these old coins is that actually, they don't need blockchains. Most of these things do not need a blockchain because they don't need to be decentralized, or they are...
Max: So you’re saying that you're saying like the use case might be legitimate. But the application of the technology is just unnecessary.
Peter: Yeah, yeah. I mean, look, when you think about Bitcoin, what's Bitcoin trying to solve is trying to solve the problem of government money. And the main problem with government money, is they just, they can print as much as they'd like. We've seen it now during this pandemic, they just approved another 1.9 trillion stimulus bill in the US, of which every person is made to get like a $1400 check. Right? 19, is it?
Max: Yeah, 14. At this place, it's like, at this point, I'm like, I'm not even mad. It's just like, it's just like fun bucks at this point is just...
Peter: But that's given $1.9 trillion divided by whatever it is, 380 million people is not what, $1400. is about $5,000, or whatever. So there's obviously printing that money for other good, other means. And I'm listening to an audiobook in my walks in the morning called When Money Dies. It’s about what happened in Germany after world war one and the collapse of the currency there? And you can certainly see some similarities. You know, you can't just keep printing money and not expect some form of inflation or future currency devaluation. So, I can’t remember where I’ve gotten. So Bitcoin is trying to solve this problem. And the way you solve this problem is you have a fixed supply of money, you have a fixed supply, you can't print it. And everybody understands the rules of the game, there's a fixed supply. So that's a really interesting project problem to solve. And actually, it solves in quite a simple and elegant way, has the blockchain, she’s a way of processing transactions, there's a way of cryptographically saving those, there's a way of decentralizing it by keeping the block’s ore. We have proof of work in terms of mining, to provide security to the network. So it doesn't get all these elegant things. But it's actually quite simple. It is just money. In the end, it's just money.
What a lot of these other old coins are trying to do, many of them, they're trying to do a lot more complicated things like with smart contracts that you put I think they put on the blockchain another comparison, but what you tend to find out so it's like a theory in which you keep fine is like the smart contracts fail or they get hacked, or someone does an exit scam. And I think it's because fundamentally, those systems are just too complicated to put on an immutable blockchain. An immutable blockchain of money is a good thing. Yes, you have to take some responsibility with your Bitcoin, you have to secure it, you have to make sure when you're sending it to the person, you got the address correct. It's quite simple. When you meet something very complicated, like a theorem, you're creating this huge attack surface for people to just try and hack or steal from you. And it just happens so often, and also, it's just not meaningfully decentralized.
Max: Hmm. So there was an episode that I really liked a few weeks ago that you did this is related to what you just said. It's called Why Bitcoin Wins. I'm trying to remember what the guests were. Gary...
Peter: Gary Vee and Robert Breedlove.
Max: Gary. Right? You're right. And so that started the discussion on this podcast. And it was like, “What if Bitcoin wins?” And we concluded that, you know, it's not just a bunch of people getting rich or a bunch of new tech at the point of scale. It's like, basically a revolution of our whole society. And there's gonna be a lot of pushback on that. And it's coming relatively soon. It's not like 50 years in the future. It's probably not 20 years in the future. It's probably closer than that. So, I mean, I don't expect you to predict the future. But I was like, what kind of massive changes should we be on the lookout for here?
Peter: Yes. It's a great question. There's a lot to unwrap there. So I'm beyond the stage now of thinking Bitcoin can fail. I think it's succeeded. It already has succeeded. Not every technology lasts forever. But I think, I really think it's succeeded. Is it still essentially some kind of like, perpetual beater? You could argue that. I think no, I think it's close to a finished product. It's been improved. But the job is trying to do upgrading censorship resistant money, it's done that. And it's got a very high uptime. And, yeah, I mean, when you see Elon Musk investing $1.5 billion of Tesla's money, you see Jack Dorsey investing $50-170 million micro strategy, but hundreds of millions in, and then you see Goldman Sachs and they're gonna offer trading and fidelity offering custody. This is a mature community, and it's a mature industry. And it's, it's because the system is very, very secure now.
So now it's here. It's like, okay, where can it go? And there's two things to look at. Firstly, it's like, How big can it be? But also, I think you have to look at where does the pushback come from the state? So anyone enjoying Bitcoin wants to find out more, I recommend a book called The Sovereign Individual. It's a fantastic book. He kind of predicted Bitcoin, and it talks about the information age when...
Max: Sorry, it predates?
Peter: It predates Bitcoin, but predicts it as well. It predicts a digital form of cryptographic money. We're entering that age now where anyone can really go and live anywhere they want in the world, kind of. Obviously, there's some restrictions. You can't go live in North Korea, again, in China it’s difficult. But you know, if you want to go and work and try and find a job, you probably can get there. But that also gives small states or small countries, this kind of regulatory arbitrage where they can attract people in. Estonia has done it brilliantly with cryptocurrencies in the mortgage system. We're starting to kind of see it internally in the US with Wyoming and Miami and try and offer different things. A lot of people during the latest election goes, why the hell am I in San Francisco and get shouted out by crackers. I can go and live in, I can do my same job in Texas, and get and pay no state tax. So we've got this person–
Max: I mean, that's exactly what I just did. I mean, I'm in New Hampshire here. I was in New York City for 15 years. And it was a party for 15 years. And the last year was like, party's over. And I know my friends are doing some crypto stuff there. And all, you know, stuff is like, lots of websites are restricted because of the regulations. I did something crazy. Rather than get a VPN, I took the train into New Jersey, and I was using certain websites and like Jersey City. Like shapeshift I think so.
Peters: The point I'm trying to get to is like, we've got this changing world. Now. Bitcoin isn't going away, is here. Okay, so we can talk about the next big battles. And we can talk about what it will mean, the next big battle with the regulatory side. Now, the most hardened bitcoiners will talk about the importance of privacy and they’re right., We shouldn't deserve to be able to transact privately. And there's so many reasons for that. Just basic as a basic human right, but also because, you know, certain countries buying certain goods can get you arrested by buying a Bible in certain countries may get you arrested, can making political contributions to charities or political parties to get you arrested.
But we all deserve financial privacy. But we don't tend to have it and it's usually under the guise that Oh, well. You know, when we need to be tracking in case people give money to terrorists or funding crime. But whenever you look at natural statistics is a very, very small amount. But what's going to happen is, I think the state is gradually—well, it depends on the state—I expect certain states the likes as I happened in the Gary Vee, I mean, he raised it your Russia as you Brazil was India's China's to be very hostile towards Bitcoin. I just do because they're all authoritarian. They're all authoritarian states, or they're more authoritarian than other places, but I expect them to be very hostile, because why would they want to support an open protocol for money, which they can't control? I mean, Putin is regarded as potentially the richest person in the world. But no one knows where his wealth is, right? Why would he support an open protocol for money? China, for obvious reasons, would never support an open protocol for money. Brazil, potentially, yes, no.
But what we've got is places like the US and Europe and UK, rather than banning it, because it's a little bit more difficult. There are certain argument is that code is free speech, and why would you ban code, they certainly might make it a bit more difficult. They might require more stringent KYC implementations. They might force people not to be able to use certain things like coin joins, which allows you to obfuscate your transactions. There might be certain things they do like that, that make it just more and more difficult to use. But Bitcoin has fought many battles. And I think it would clear that battle anyway. Because I think other nations will go, I mean, the smart move for a small nation right now is to put Bitcoin on its balance. So hold Bitcoin in its reserves, and say, we're open to supporting Bitcoin, and then going public would become what I become far wealthier nation once it has.
But if we get over those hurdles, how far can this go? I don't know. Honestly, I'd be guessing. I don't know if we have enough in two worlds, we end up with the bed, like when you have those dystopian future films, where it's like, there's the red, half the world's red and half’s blue and they're at war. I don't know if we're gonna end up like that, the half the world adopts and uses Bitcoin and the other doesn't. And you have China and Russia transacting using digital Yuan, and, you know, whatever. And you have half the world who's adopted Bitcoin or you have this mix of dollar Bitcoin, I really don't know. What I do know, what I do expect is Bitcoin is like gravity, and it will continue to suck people in. Because once you've huddled hard money, and you've come to understand what hard money means. And you've, you've because it doesn't isn't like it's gonna sound hyperbolic, right. And somebody lives in this might be like, I use chat bots. But there is a reality, once you hold hard money like Bitcoin, you don't want to let it go. And the reason you want to let it go is because you know it's pristine collateral, you know, it'd be worth a lot more in the future. So you become a little bit more wiser about your spending habits, you can become a little bit more considerate, and therefore you become a little bit more considerate about other things. I mean, it has for me, So I would just say, I expect it to continue to grow, continue to draw people in like gravity, as I said. But how big can it go? I don't know. Can it be the world reserve? I don't know, I don't even know what world reserve means. I know, it's my reserve. And I've got friends who use it as a reserve, and I know it’s the reserve from my company. But does it become the world reserve? I don't know.
Max: How do you think about people who want to go all in on Bitcoin or be Bitcoin huddlers? And then, you always hear this phrase, “Not your keys, not your coin,” but it seems to me like everybody holding their own keys, is, it's, it's quite a big responsibility. You might want to lend it out. I mean, I know you've had people on from BlockFi and Abra, where, you know, you could you could lend it out and make more. And then there are some people online saying, well, you shouldn't do that. Because then you don't know, someone else has custody. How do you think about that?
Peter: Yeah, another really good question. So for again, anyone listening who doesn't know this, not your keys, not your coin term. So with Bitcoin, there's no customer service. There's no call center. There's, if you've sent a transaction to somebody by mistake, there's no chargebacks. You become self-sovereign, you hold sovereignty over your money, but you hold responsibility over it. So once you've got that Bitcoin and you're holding it, you are responsible for it. Now you've got a couple of options. If you buy a coin base and leave it on Coinbase, they are sovereign over your money. It is yours, but it's essentially an IOU until you take it out. The way you take it out is, you hold it in a hardware wallet or you hold it in an external wallet of some kind. Now, whether it's multi-sig or whatever. We refer to any industry is, once you've taken control of the Bitcoin, once you've got it on your own hardware wallets or your own wallet somewhere, you are holding your private keys when somebody else is holding a few custody, a few, you're not holding your private key. So this is what we're talking about.
Now, I don't think every single person from day one has to hold their private keys. If someone says to you, and you know, I'm going to get into this Bitcoin, and they go on Coinbase, and they buy 100 bucks a Bitcoin, leave it on Coinbase for now, just leave it for now. And then go away and learn about Bitcoin and think is this something you really want to get involved in and get involved in deeply and then you need to learn about security. But if you get to the point where you're starting to stack and build up a decent amount of Bitcoin, then you do want to hold your private keys. But let's say it comes with some responsibility, you know, you have to have a way of backing those up.
The next point that you've referred to as it's a company like BlockFi. So this is a kind of company which allows you to lend your Bitcoin. You can send them your Bitcoin and they will lend it out and give you some interest. Or you can borrow money against your Bitcoin again, you send them some Bitcoin and they'll give you a loan. And when you read and pay the loan, you get your Bitcoin back. Highly controversial companies, they split the community, some people are saying, What is the point of giving your Bitcoin to another company to hold for you for 6% interest on an asset pristine asset that goes up in value? What if that company goes bust? You lose a Bitcoin?
Now back in 2011, I'd have to take the year, an exchange called Mount Gox went bust because 800,000 Bitcoin was stolen.
Max: And that was very traumatic for the Bitcoin.
Peter: A very, very traumatic, a lot of people lost a lot of Bitcoin and a lot of money. So there's, again, there's a PTSD with this and people are like, hold your Bitcoin.
I think any financial system needs borrowing and lending services, I think it's important. There are different ways of doing it. I would never put all my Bitcoin with a BlockFi, I wouldn't even put over 20% but I certainly am happy to put a certain amount with them. I trust the service. I think we've got much more mature companies where they’re in custody in it and not losing your Bitcoin. I think we, I think we're in a very different place. And right now, I do trust them, but I'm always keeping an eye on it. You know, I'm always asking the CEOs that cringe questions, always welcome him on the show. I'm always listening to feedback, you know, it is a moving feast for me, I'm always keeping an eye on it. Because if something did happen to them, and I lost that Bitcoin, obviously I would, I would be devastated.
Max: Yeah, yeah, for sure. I yeah, I've looked at it. I feel like the chance of that happening for something like, like Blackfyre is far lower. I mean, you know, but again, it's like the Bitcoin cash people when they say they're taking over, like, I'm not 100% sure that I'm right here. So I think it's safe to spread around your investment a little bit.
Peter: Yeah. Do your research, as we always say,
Max: Yeah, yeah. All right. So we'll, we'll start to wrap up. What's in store for 2021 for the What Bitcoin Did podcast? Do you have any? Are there any topics that you'd like to cover that you haven't covered yet? Or?
Public: I've got I mean, just to keep growing, you know, I've just done my numbers for February did 724,000 downloads I like, in my head, I'm like, I want to get to a million just just want to have million for a month as a target? Yeah, I want to break it out to a few bigger, more mainstream guests. I'd like to get Eric Weinstein on. I'd like Lex Friedman on. You know, I'd like some, you know, Jordan Peterson, Sam Harris, all these big names, like to get them on and get their opinion or get them into a debate with some top Bitcoiners. Because I think, as part of this going mainstream, you know that that's really important. I'm growing what Bitcoin did into a platform. I want to make it less about me, and more about other voices as well. Because I have one job, which is to ask simple questions. But there are some really smart people who can provide really good content in a different way. I want to make little audio documentary series until topics don't tell narrative stories. So I don't just keep developing and growing the brand and expanding it. And then I've got little side projects I do as well.
Max: Cool. All right. So as we wrap up, do you have any last thoughts on this? And where can people find your podcast and website and all that?
Peter: Well, thank you. Thank you for having me on, Max. And I really appreciate it. And I don't usually like to do interviews because I think I'm better at asking questions and answering them but it's a good test, but I always feel like I'm not the best but so thank you.
Max: I'm glad you chose to come on to The Local Maximum.
Peter: Well, I appreciate you having me on, giving me the chance. Look, if anyone's interested in Bitcoin and wants to learn about Bitcoin, I do have this podcast. It's What Bitcoin Did. You can find it in www.whatbitcoindid.com. I've got a beginner's guide on there. And then just most weeks, I've just got different types of interviews from good technical people, or traders. So there's all different types, you'll find the content you like. And if you want to follow me on Twitter, it's @PeterMcCormack. And yeah, just thanks for having me on, Max. Really enjoyed this.
Max: Alright, Peter, thanks for coming on the show.
Peter: No worries, buddy, you take care.
Max: All right, all of this will go in the show notes page at local max radio.com slash 165. We have a lot of stuff on deck for you. You know, if you want more crypto, I am planning on doing—I'm planning a number, a couple of crypto-related episodes. I'm planning on doing a solo show on decentralized finance, DeFi, I think the kids are calling it. And that's an important one to know. So I'll get to that.
I also have a guest coming on to talk about time stamping uses in the blockchain. So we're, I'm gonna have a couple episodes. And I'm not sure right now whether I'm going to do it all next week and the week after kind of push them all together. Maybe that's a good idea or whether I want to space it out. I'm going to think about that a little more.
In other emerging technology news, I have a great guest on augmented reality coming up for you very soon. And Aaron and I, in addition, are going to do another news update. We're going to talk about The Fourth Turning, which is really fascinating, kind of historical, social idea that Neil, it's a book by Neil Howe and William Strauss that came out in the 90s that seem to predict a lot of what's going on now. So we'll talk about what their theory is. And yeah, there's that, I use—sometimes I come on at the end of the show, and I say, I don't know what we're going to talk about. Now there's so many things coming up. This is gonna be a very exciting spring for The Local Maximum. Have a great week, everyone.
That's the show. To support The Local Maximum sign up for exclusive content and their online community at www.maximum.locals.com. The Local Maximum is available wherever podcasts are found. If you want to keep up, remember to subscribe on your podcast app. Also, check out the website with show notes and additional materials at localmaxradio.com. If you want to contact me, the host, send an email to localmaxradio@gmail.com. Have a great week.
