Episode 186 - Cubans embrace Bitcoin amidst Monetary Oppression, and the Last Jew in Afghanistan
Today's news update goes international to talk about the intersection between technology and global events. Cubans are using Bitcoin to go around their country's insane currency system. OnlyFans bans porn to placate banks in the UK. In Afghanistan, the last remaining Jewish resident refuses to leave the country as the Taliban come in.
Links
NY Post: Last Jew in Afghanistan will Stay
WION: Interview with Zebulon Simantov
Bitcoin Magazine Alex Gladstein: Cuba’s Bitcoin Revolution
Bloomberg: OnlyFans to bar Sexually Explicit Content in October, Cites Pressure from Payment Processors
Transcript
Max Sklar: You're listening to The Local Maximum Episode 186.
Time to expand your perspective. Welcome to The Local Maximum. Now, here's your host, Max Sklar.
Max: Welcome, everyone. Welcome. You are listening to The Local Maximum. Today, we're joined by Aaron once again, and remote this time. How are you doing, Aaron?
Aaron Bell: Good to be here, even if only virtually.
Max: Well, we're going back to old school, and I'd like to say it's because the studio is being totally remodeled.
Aaron: Let's go with that.
Max: Yeah, we're getting new furniture in. Basically, that's what we're doing. Let me switch to my headphones, just so that we don't get an echo for you here. All right, so what are we doing today? August, I wanted a news update for August. One or two news updates for August and wow, it's been such a slow news month. There's really not much to talk about, but I think we've got to scrape down at the bottom of the barrel and talk about a few things. I've got, it looks like the stories that we have today, well, they're all technology-related, as usual.
But today we're going to talk about some international issues, which I always enjoy talking about. I always like to find out what's going on in the rest of the world because it gives us a sense of is something that we experienced local? Or what technology that we're using, particularly, when it comes to the financial system changes? Bitcoin, in particular, what's going to happen? What's happening globally is very important. Because I remember in the early days of Bitcoin when people would say, "Oh, I don't see any development going on." I'm like, "Well, wait a minute. The whole point is permissionless innovation anywhere in the world. How do you know there's nothing going on?" That's what's so special about stuff like this. It's also true of the internet in general.
We are going to talk about Bitcoin in Cuba. We're going to talk about Only Fans in the UK. Let's get started with this. Let's get started with Afghanistan, with a non-crypto-related story.
Aaron: Yeah. Very, very low-key human interest story. Nothing controversial about this one at all.
Max: I don't want to... I feel there's too many takes on Afghanistan. Not that I have no opinion, but I don't feel like I have anything to add. But this is a pretty interesting story that I covered. I remembered back in 2004 when I was on Yale Radio. When it was like, "Okay, there are two Jews left in Afghanistan, and they hate each other." I just thought that was the most ridiculous story. It turns out, now, the story is there's one Jewish guy left in Afghanistan. I'm not talking about coalition forces or people there part of nation-building or whatever.
Aaron: A person who is an Afghan.
Max: A person who is an Afghan, right. The main headline is he said, "Okay, Taliban is coming back to power. I'd like to get out." They try to pack him up. They say, "Okay, it's time to go." He changes his mind. "No, no. You know what, I'm going to stay in Afghanistan." That raises some eyebrows for me. Again, I remember the story from 2004. The name of the guy is Zebulon Simantov. The guy he was with, who was older than him, was Yitzhak Levy. They were basically feuding over the control of the last synagogue in Afghanistan. People laugh at this because they say it's a very Jewish story. But after looking at the news over the last 20 years, I also suspect it's a very Afghan story as well.
Aaron: I'm curious but a little afraid to ask if we know what exactly, what was the schism between the two of them that was causing this feud? Or was it just they had to have something to argue about?
Max: Yeah, it was very hard to understand from what I've seen. I don't understand half the feuds that are going on in Afghanistan. Also, they're Afghans. They're being translated. They're talking in Dari, which is the language over there. But from what I understand, there is a dispute over ownership of the synagogue. One of them thinks the other one is interfering in his business, and turning away customers, and stuff like that. This was followed up in the New York Post.
By the way, just an interesting tidbit on Afghanistan. This guy was born in the 1950s. He's like in the 60s. He lives in Afghanistan. He was born in the kingdom of Afghanistan—that used to be a thing—in a town called Herat. Now, he's in Kabul. Back when there was Jewish community in Afghanistan, I think that was the town it was in. I think it's a town or a city near Iran.
Anyway, since then, I was like, "Well, how many governments has he lived under?" I've counted, okay, He's born into the kingdom of Afghanistan. Then it was overthrown, turned into the Republic of Afghanistan, then the Socialist Democratic Public of Afghanistan, then the Soviet invasion to make sure it stayed a Socialist Republic or something like that. The Soviet retreat in the civil war between the Taliban and the Northern Alliance, followed by the American occupation, followed by the Islamic Republic of Afghanistan, which is the government we've been trying to prop up, and now, the Taliban again.
Aaron: Taliban 2: Electric Boogaloo.
Max: That's the sequel. Yes, that's quite a few.
Aaron: I've heard the factoid floating around that there are many adults in Afghanistan for whom this will be their sixth government to live under. I guess it depends on how exactly you can slice that, but he definitely meets that threshold. I can see why he might not want to leave. It seems very similar to you here about whenever there's a big hurricane, like for Katrina or something on that magnitude, there are always people who say, "Oh. Well, I lived through the last big one. I'm not I'm not leaving now. If it's my time, it's my time. But I'm not going to run from it." And I can imagine there's a little bit of that going on here.
Max: Yeah, but I also saw in some of the interviews he did he was like, "Yeah, the Taliban is pretty brutal. They're beating people with chains there." It's not like he is, "Ehh, the Taliban is not so bad." He's just... I don't know. He seems a little bit nuts in a few. But I don't want to call everybody... It seems everybody in that whole country is nuts. So I don't want to go there, necessarily. It's a very different culture. Even though he's Jewish, I don't wanna pretend to know that I understand his thought process here.
But anyway, the last paragraph of the New York Post is a doozy. I'm going to read this paragraph. You ready for it? Alright. “Simantov became the country's last Jew after the death of Yitzhak Levy...”
Actually, it's likely he had a more Afghan-sounding name. But anyway, “...in 2005. Though they both lived in the same rundown synagogue, their hatred for one another was the stuff of legend. For years, the two men spoke mostly to each other in swears and regularly denounced the other to [the] Taliban authorities. Once during a mutual stint in jail, their arguing was so annoying that their Islamic captors simply released them.”
Now, I have so many questions. First of all, I hear some very serious stories about the Taliban these days. I don't know what's true, but I hear they're executing people for downloading Christian Bibles on their phones. They ripped up Zebulon's Torah. Literally took the Torah, ripped it up. Why aren't these guys afraid to be executed? Or why weren't they executed, is my question. What's the situation there? I can only speculate but maybe it's like the Taliban...
Aaron: There's this old man vibe. At a certain point, you don't care. And people fear and respect that.
Max: I guess at a certain point, they're like, "We're not going to..." Maybe they don't execute everyone. It's just something that happens, sometimes, is my guess.
Aaron: I can definitely see some middle management Taliban bureaucrat being saddled with these guys, and his reaction just being, "Seriously? Really? I have to deal with this? I'm trying to enforce Islamic law over whether it's a neighborhood, or a city, or a country. And I have to deal with these two bickering old men? Make it somebody else's problem."
Max: I feel like there should be like a sitcom. Zebulon and Yitzhak. It would be very politically incorrect. I know that.
Aaron: I was about to say, "Well, maybe it'd be too soon." But I believe there currently is a sitcom about a, I don't know if it's an Afghan interpreter...
Max: It also makes light of some very serious crap that's going down there, which I...
Aaron: Which on the one hand can be insensitive and politically incorrect. But on the other hand, sometimes, that's the best way to deal with these difficult issues. The only way you can start the conversation is by making a little bit light of it. And that can open a door to deeper discussion and broader awareness.
Max: Yeah. I just wanted to bring this up because this is just a crazy story. It's amazing that it's one person that we're talking about because he's just like, "Well, I'm just not leaving. I'm just going to stay."
Aaron: It certainly seems there's an expiration date on it because even if he lives out his natural life there, there is not a Jewish community in Kabul, or perhaps in Afghanistan as a whole, to live on after him.
Max: Yeah, yeah. Or not openly.
Aaron: It won't be the first country to have completely, either actively eliminated or have run out the clock on its Jewish minority.
Max: Yeah, and there used to be I think I read 40,000, a community of 40,000 Jews there in 1940.
Aaron: Back during the kingdom days?
Max: No. I think 1940. I think it was... I am afraid to get this wrong. But I believe it was one of the Nazi-influenced governments during World War II. It doesn't mean the Holocaust was happening there, but it was just not very friendly during those years and then especially immigration...
Aaron: I certainly don't know much about what was going on in that part of the world during that particular period.
Max: Yeah. Well, different countries in the Middle East had very different situations going on and don't necessarily match up with what's going on today because they've all been through so many governments that it's at times, hard to keep track. What's fascinating is if this guy gets arrested, if this guy gets killed, if this guy dies, we're going to hear about it. You'd know that, so it'll be in the Post, which is I'm sure they don't read the Post over there. But that's very interesting.
Aaron: I guess something to keep an eye on.
Max: Yeah, we're following this story now. I'm excited. Okay, so I think we're ready to move on. Now, I want to talk about...
Aaron: From one potentially oppressive regime to another.
Max: To another. Yeah, exactly. We're going to go to Cuba. And this is a really, I thought, very well-researched article in Bitcoin Magazine by Alex Gladstein because it's very comprehensive. It tells us about what's really going on in Cuba with Bitcoin. He also goes into a lot of the history of Cuba and its monetary system. So, if you're interested in all of that, go to localmaxradio.com/186 and get the link because this is...
Aaron: I assume that Bitcoin Magazine is a digital-only publication?
Max: Well, I don't know if they have a physical version but I think they probably...
Aaron: Certainly, digital first.
Max: Yeah. Okay. First of all, what's going on in Cuba? I don't want to give the whole background, but there's some background that we do need. Cuba is having its worst downturn since 1994. Apparently, that one in 1994 was sort of an aftershock of the fall of communism. The fact that the Soviet Union wasn't around to give aid, and there was actually a third...
Aaron: Timeline-wise, fall of communism, we date that to what? '91? Or '89?
Max: I guess so, yeah. Because the fall of the Berlin Wall was '89. But I think the actual of fall the USSR is '91.
Aaron: Took a couple years for the rest of the... Yeah.
Max: Well, yeah. The fall of the Berlin Wall was not... The USSR still existed. It was just... Yeah. In 1994, there was a 35% decline in the economy. That's a crazy number if you know how some of the gyrations that can occur in an economy like this, in a communist economy or socialist economy. The protests were pretty large back then. But last month's protests, he says, were actually bigger. Turns out the protests that happened in Cuba last month were in, at least the measurement they're using, the biggest since the Cuban Revolution, the biggest ever against the Cuban government as currently formed.
Bitcoin Magazine cites internet and communications as the reason for this. Like we've covered in a previous episode, I should... Well, I'll find out later. But we learned, and I learned when I visited Cuba, that the internet is very tightly controlled there. But they can't control it completely. They can cut it, but they have to allow some of it to go on because it's necessary for international commerce. That's the only way they keep things going. I got my Airbnb through the internet, obviously. I didn't call them up.
Aaron: How comparable is their setup to, for example, the Great Firewall of China? Obviously, China is very much tied into the modern internet.
Max: China is a high-tech economy.
Aaron: They kind of have their own ecosystem.
Max: No. In Cuba, it's very, very difficult to use the internet. You have minutes, and you have to pay for minutes. They tell you who's allowed on, who's not allowed on. You have to kind of go into the park and use it. Highly-tracked. I would say much more closed than China. China has a high-tech sector in a way that Cuba just has none. China needs the internet a lot more.
Okay, so they talk to a bunch of sources. They're a bunch of interviews. The first one on there is Lucia, who’s a 30-year-old medical worker in Matanzas, a city of 150,000. I'm not exactly sure where that is. Actually, let's look that up: Matanzas, Cuba. Right. All right, I see. Okay, so it's in the north. It's not very far from Havana. It looks about an hour, two-hour drive from Havana to the west.
Basically, what she reports to this journalist is she says the food, electrical, toilet, very hard to get supplies. Their toilet-paper shortage is, I'm guessing, probably a lot worse than our toilet-paper shortage back in March 2020. I had toilet paper. It was just like everyone wants toilet paper can get it, but they're like, "Oh, but it's the itchy kind."
Aaron: I'm very curious how self-sufficient Cuba is. Given how, and maybe this is my skewed perception as an American, maybe the embargo really doesn't mean much of anything other than getting US goods.
Max: Yeah, they can trade with other places but...
Aaron: How much of what they need did they make domestically versus are they much like us, dependent on a lot of stuff shipping from China or other nations?
Max: They're very dependent on international trade. I'm going to get into this in a bit because that's what's causing a lot of the problems that they can't seem to produce things locally like they need. They are reliant on trade. In terms of the embargo for specific goods, they could trade with every other country besides the US. They're not barred from getting specific goods, but that stuff does hurt in terms of trade between Cubans and their relatives in the US.
Aaron: Right. Big deal for remittances and that type of thing.
Max: Right, right. Okay. They also report that supposedly the healthcare system is collapsing. I don't know what to say. I could almost say something sarcastic about, "Well, I was told they had the most wonderful health care system in the world." But I don't know. I was there. A lot of things were falling apart. I can't prove that they don't have a great healthcare system but it's going to take a lot more to convince me than a Michael Moore movie. I'll look at this data from the UN, which actually...
Aaron: I'm very curious what the actual metrics are there because I've been hearing news reports about how the American healthcare system is on the verge of collapsing because of COVID-related things for the last 12 to 18 months.
Max: Turns out to be not really as true as...
Aaron: I don't know if they're talking the same type of thing there or if this is a much, much deeper issue that they're encountering. Certainly, I wouldn't imagine COVID has made it better.
Max: They say the hospitals are filled up, and there's bodies on the street. But they also had reports like that about New York, and then it turned out to be not true, really. It's other than... Or at least given the wrong impression...
Aaron: Presumably unbiased reporting access to Cuba is somewhat more fraught than to New York City.
Max: Okay, so, Cuba. Things are bad. Right? What's happening with the money in Cuba? That's a more specific thing that's going on. Right now, the government has a little program going on called monetary purification. If you think that sounds scary, oh, wait until you see what's going on. Basically, they had this crisis in 1994. Since 1994, the government said, "Okay, we're having some issues with our money, so we're actually going to have two monetary systems." When I was there in 2018, which was actually right when I started the podcast, right? Between Episode 0 and Episode 1.
I had to use their dual monetary system. So, they had two currencies. They had the CUP and the peso. The peso is their day-to-day currency that the people of Cuba, specifically for the people of Cuba, which by law is pegged to the dollar 24 to 1. I don't know why they're pegging everything to their enemies' currency, which is us, but that's what they're doing. Then, the CUP...
Aaron: Because if they pegged it to the Venezuelan bolivar, then they'd be in big trouble.
Max: The CUP, that's the money that's just for tourists. That is... Oh, no, no. Sorry. I get them confused. The CUP is the peso. The P stands for peso. The CUC is the money that I got, which is pegged to the dollar one to one. I feel like that's the one that is actually backed by the dollar to some degree. The tourists get those. You could go in and spend those in stores. You're, as a tourist, not really affected by all the shortages. You could get whatever you want, whereas the people in Cuba... Not whatever you want. There are still things that they don't have in the country. But you're kind of walking around buying stuff that the average Cuban can't buy. You're kind of thinking, "Well, that's kind of messed up."
Aaron: This raises a bunch of questions. First of all, are you shopping in stores that are purely for tourists? Or would natives be able to shop there as well? And if so, are prices listed in two different currencies?
Max: No.
Aaron: Or do they just do the conversion in their head?
Max: Those stores are only CUCs.
Aaron: Tourists only?
Max: Yeah, yeah. Tourists only or a local if you happen to get your hands on CUC. Like if I went into a non-tourist-only store and spent it, which is of course...
Aaron: That 24 to 1, that's a fixed ratio?
Max: Yeah, but it's not really worth 20. It's worth a lot less. It's inflationary. Much more. Well, I guess they're both inflationary, technically, but the ones for the people...
Aaron: Because they can't easily convert between them, then it's less...
Max: It's like in the last episode. We talked about when we had gold and silver.
Aaron: I was going to bring up this begs the question of Gresham's Law, which I think you talked about in the Goldback episode.
Max: Right, right. Back then, we had gold and silver, and it was pegged, which meant that one was more valuable, and you didn't want to spend it. But the difference is, those were two good currencies. Whereas in this case, you have one really bad currency and one that's just merely the dollar bad, US dollar bad, and one that's third-world peso bad.
Let me read some of this: “Lucia described the system's output as creating a reality where she could buy a cup of coffee, a bus ride, or even a small meal for an incredibly cheap price in pesos. But a pair of shoes or a phone plan, priced in CUCs, could cost an entire month's salary.” That's sort of how it is to be a Cuban citizen. This system has gone, by the way. They recently removed it. That's this monetary purification. I'm just explaining what was there.
Aaron: This dual currency system is the monetary purification or this is the precursor to the...?
Max: Precursor. Precursor.
Aaron: Okay. We'll get to the purification in a minute.
Max: So, you have the dual system. What economic forces are at play here? Sounds like Gresham's Law is going on a lot where in this case, the dollar is the good currency even though our politicians spend trillion dollars like it's nothing. It's still better, apparently, than what they have going on down there.
Aaron: Is there also like a black or gray market for actual dollars?
Max: I can’t answer that without enough…
Aaron: Or because the CUC is pegged to the dollar one to one, then it's not really different?
Max: I assume there is, but I don't know.
Aaron: You never paid for anything with actual physical American dollars?
Max: No. I don't think it was legal, but I don't quite remember. Let me just read another clip: "In tragic irony, unskilled workers are often far better off financially than highly educated ones." I'm going to read that again: "The unskilled workers…” in Cuba, some of them, “...were far better off financially than highly educated ones." Why would that be? Many people “drop[ed out of] their careers...” and says, “...to clean tables or pick people up from the airport…” from the international airport to get access to the CUC economy. The dual currency system institutionalized inequality, creating clear classes of haves and have nots. For many people like Lucia, this is as much as anything else show that the revolution was a sham.
Because think about it. Is this what was promised under communism? This is like the exact opposite.
Aaron: I guess that makes sense because in a country where you have nationalized healthcare, who pays the doctors and nurses salaries? The government. And obviously, they're going to be paying that in those CUPs, the 24 to 1 currency. Or if you work at the university, well, I would imagine that all universities in Cuba are state universities. Your salary comes from the government. I don't know how far down that goes, but unless you're directly interfacing with tourism, then you're not maybe entirely cut out from the CUC market. But you're probably a degree or two removed from it. You only get very light trickled down.
Max: Again, it's like you want to be picking people up from the airport and getting those tips. All right. What's happening now? They took a look at this, the policymakers in Cuba, and apparently, decided this isn't working very, very well. As of January 1, 2021, the CUC was officially phased out. This is the monetary purification. The Cubans were given six months to exchange your CUCs, the dollars, for pesos at the official exchange rate. You're basically losing a lot of money there. It says Cubans have lost nearly two-thirds of their purchasing power since the end of 2020, as the price of the dollar has gone from the official rate of 24 pesos to costing as much as 70 pesos on the black market.
Okay, so they're like, "All right. You know what? This dual currency system is not good. We're just going to use one currency." But then, they have a problem because they can't do international trade. So, they replaced those CUCs with something called MLC credits, which sounds like it's very similar, which you get when you're doing international commerce. They basically can't get out of this system because they need hard money for trade, but the MLCs are digital-only.
They've replaced their CUCs with a digital version, it sounds like. That's their kind of bait. Not bait and switch, but almost their pretend reform where they end up back in the same place. Basically, all the Cubans who were making their CUCs thinking they were in the money, they're like, "Yeah, no. We're taking that." That's what's going on now. Now, how did they find out about Bitcoin? It's very tough to use the internet in Cuba. How would they find out? This is really fascinating. Apparently, what news do you think they would get in Cuba on their TV? What kind of news?
Aaron: Probably not Fox News or MSNBC?
Max: No. They're getting propaganda, which is the same... Okay, I'm not saying that Fox News and MSNBC are not propaganda.
Aaron: It's a different flavor of propaganda.
Max: Yes, yes. They have to get their own state propaganda. One of the ones that they allow on, which we can watch too, is RT Russia Today because it's reliable Russian propaganda. But it happens to have an American show on it because it has a show called The Keiser Report by American Max Keiser. They love playing it because he's very critical of US foreign policy but apparently... Well, I've seen him on YouTube. Most of the time, he's just evangelizing Bitcoin, so it's kind of like a Trojan horse there. He's evangelizing Bitcoin on his show on Russia Today, and people are finding out about it, and they're joining these groups on Telegram, which is apparently a chat app that they can't stop.
People are impressed. They're like, "Wow. No bank, no ID, no permission to trade. This is groundbreaking." How is the state reacting? The state is apparently reacting very slow. They're not like, "Shut it down." They're still at the point where they don't know what's going on. Currently, the Cuban government is telling people, "Well, Bitcoin is one of these multi-level marketing scams that you don't want to be involved in." But that's really... You have to take some educating. I love this. At one point, and I'll get to it.
One person reported that they interviewed this guy, a TV personality, Erich Cruz. He says Bitcoin is exploding. And he said the government will incorporate Bitcoin policy in their next five-year plan. I don't know when the next one ends, but if they kind of miss it this time, they got to wait another five years. In Bitcoin timeline, that's a pretty long time.
He said the alternative to getting hard money is the mule method where you wire money to someone, and then they physically go to Cuba and give you cash. Whereas, Bitcoin is instantaneous. He says 100,000 Cubans are using Bitcoin on a regular basis more per capita than in the US, and Canada, and places like this. They're using Lightning-enabled wallets like Muun and BlueWallet just like El Salvador, so you can transact quickly.
Aaron: I want to ask, are they mostly using this to get money in and out of the country? Or is it actually for exchanges, regular transactions in Cuba between two Cubans?
Max: I say both. I'm pretty sure it's not like Bitcoin beach in El Salvador. But if you're getting this stuff from abroad, why wouldn't you trade it locally, as well? If you're meeting up with people locally or doing it, why wouldn't you do it as well? Apparently, this is in fact, happening. People, you can get these wallets. It's amazing that the government hasn't tried to shut it down, but they have so many other problems that it seems like they can't, and this thing is growing. The plot thickens in Cuba, which is really fascinating.
Aaron: Yeah, I'll just make the comment that when I was looking at our notes here right before you got to the part about the government claiming it's a multilevel marketing scam, I was a little confused because I saw there's MLM, there's MLC, there's CUC, and CUP. So many acronyms here.
Max: Yeah. Governments like acronyms. MLM is more multilevel marketing. We have it here. What they reported was because times are tough in Cuba, same thing when times are tough in the US, a lot of people turn to multi-level marketing kinds of things to make some extra money, which is usually a pyramid scheme-type thing. So, the government is telling people that Bitcoin is a pyramid scheme. I was told when Bitcoin first came out here that it's a pyramid scheme, actually. There are still people who say it, but you have to be educated.
Aaron: Well, if you don't believe that it has any inherent value, then it does kind of seem like a pyramid scheme, and that the only way you can increase the value of your holdings is to get other suckers to buy into it and pump up the price. But that's assuming that there's, like I said, no inherent value to Bitcoin in the blockchain, which I think there's some dispute about, for sure.
Max: Yeah. Alright. That's all I wanted to say about Cuba. But this changes my impression of what's going on there quite a bit. I don't know what's going on with their government. Is it stable? Did they crack down on the protests? What's going on with that? But it certainly is interesting that this kind of stuff is taking off. And I don't think they're going to stop it. It's just they've moved up a level in terms of their use in Bitcoin, and this is going to continue. That's all I would say about...
Aaron: Cuba has certainly dropped out of the news cycle, given everything that's been happening in Afghanistan. I think even before that, they were falling down the priority list there. But even when they were a trending topic, so to speak, this was not the angle that you were hearing much about. This is fascinating to dig into a little bit.
Max: Yeah, yeah. Before Afghanistan, we're talking about Andrew Cuomo. I heard the other day, Governor Cuomo announces x, y, and z. I was like, "Isn't he gone?" They're like, "Oh, no. He announced a two-week thing." Then, it's like, "Well, how has that been less than two weeks? It seems almost impossible." But anyway, that's just a comment on the news cycle these days. Alright, last one.
Aaron: That can move pretty fast.
Max: Yeah. Last one, I want to be pretty quick with this. OnlyFans, which is a site where you can pay to see content from someone, I guess Locals where we're at, you can pay content. But this is a different kind of content. It's usually pornographic content. This is a UK-based company. Apparently, they've got a lot of porn on it. They say, "We're changing our policy. No porn per se. Only nudes." This is more interesting. I'm not reporting this as just for fun.
The reason why they're doing this is because they're talking about the financial system, specifically in the UK, where they said it's because of the payment processors. They say they're getting a lot of pressure from banking partners and payment providers, and that they're trying to raise money from the outside investors. They're valuated at over a billion dollars, which is quite a bit. They are having trouble raising money because of this problem where they feel like they could be shut out of the banking system at any moment.
In terms of this article... Where's this article? Oh, Bloomberg. I used the Bloomberg article. There was an article from CNN or whatever, but I feel like Bloomberg is usually pretty good with stuff like this. They also wrote, as a product strategy, that they're going to try to position itself “more as a forum for musicians, fitness instructors, and chefs.” But I have a hard time believing that they're going to be able to shift that far.
Aaron: Yeah, so certainly, you can make the argument that they were not exclusively a site providing sexual content. But that was by far the majority of their content, from my understanding. Much like you can find things on Pornhub that are not porn. You can find all sorts of educational instructional content on there. But it is, by volume, a tiny portion of what's on there. You can make a similar argument about Pirate Bay. Some of it is the distribution of legitimate torrents, like Linux distributions, and stuff, and large data set files. But most of it is stuff being sold in violation of DRM and copyright.
Max: Yeah. It sounds like OnlyFans is trying to go legit, so to speak, in order for their board or whatever, their leadership decided, "Okay, we're going to play with the banking system and go in this direction."
Aaron: Yeah. Well, it sounds like this may be a necessary prerequisite for them to going public. They want to take that valuation and...
Max: Sure. But this is where the new economy comes in. And this is where you can compare what's happening to people like sex workers and OnlyFans to people in Cuba, where basically, they're going to turn to the crypto economy. And we have to face the fact that with the emerging of the crypto economy. This will be a non-issue. It's almost guaranteed that companies will fill the void and be like, "Well, we don't have to worry about the banking system anymore. We'll just accept crypto."
Having the rise of the crypto economy, like it or not, it will mean the proliferation of sex work online. But it also means increased financial freedom because these so-called banking partners are acting as gatekeepers for unimproved groups. I want to go back to Episode 28 when we talked about Alex Jones being removed from all social media at once. He was removed from Twitter, Facebook, and YouTube all at the same time. People are like, "Wow."
Aaron: Within 48 hours.
Max: Right. People are like, "Well, he's so nuts. Why should I care?" But we know what happens. They didn't stop at Alex Jones. They just got nuttier and nuttier. In 2018, it seemed like, well...
Aaron: It's a corollary to silence Alex Jones.
Max: It happened fast.
Aaron: Alex Jones still has a platform. They just shoved him into a "darker corner" of the internet.
Max: Yeah, he still goes on Joe Rogan's show.
Aaron: That's absolutely what's going to happen with at least a portion of these folks who are engaging in sex work. They will be forced to find another way to go about this. It very well may be a less safe way for them to do that.
Max: Well, that's one of the things, like people said about Only Fans. It's a safe alternative to...
Aaron: I hate to use this meme structure. But in a way, they were the Uber of sex work. That they allowed an independent contractor approach that was much more flexible and better served the people actually doing the work. I don't want to get too deep into this angle of it, but there's a bit of a religious or cultural crusade aspect of this that people are claiming. "We're doing this to prevent sex trafficking, and child abuse, and that type of thing." Which is if at all, a tiny, tiny, tiny minority of the impact that's going to happen here. I think that most people making that claim, like in most classic “think of the children” arguments, it's a fig leaf for doing something that they want to do just so that they can convince other people to say, "Oh, yeah. I guess that makes sense."
Max: Right. I think the main point that I wanted to make here is that the social media bans did not stop with Alex Jones. Then, they went on to journalists, dissidents, presidents. Taliban is okay, but a whole bunch of people got shadowbanned just for… like The New York Post, whatever. That only happened in a few years. These financial gatekeepers are not going to stop at OnlyFans. I think we're going to start seeing massive financial censorship, as well as social media censorship, and the crypto economy is stepping up just in time for that. This will speed it up. There's kind of a saying, what was the saying like, "Porn is always an early adopter"?
Aaron: Yeah, they tend to be on the bleeding edge of technology, CVHS, and virtual reality, and I'm sure, and the internet in general. I'm willing to take risks on that front.
Max: Sure. Yeah. All this is a sign of the times. Everything we talked about is chess pieces moving into place. I feel like some big changes are coming. I'm excited to keep up with the unfolding crypto-economy story here in The Local Maximum.
Aaron: Yeah, I think all of these issues, I'm very curious to see how they solve or route around these restrictions. I suspect that crypto, blockchain, and distributed data is going to be a big part of that with the exception of Zebulon Simantov. I don't think crypto is going to dramatically change his outlook, but you never know.
Max: Poor Zebulon, he has no one to trade with. Although, I don't know. Maybe. You know what? Maybe they're...
Aaron: Well, we haven't heard anything about what the Taliban's view on crypto is. I wouldn't be surprised if they cracked down on it but...
Max: I wouldn't be surprised if they're using it. I wouldn't be surprised if they're using it also. They're probably...
Aaron: Well, the two are not mutually exclusive.
Max: Yeah. Well, that's true. They're probably facing international sanctions, so I would expect that... Well, they'd have to be pretty sophisticated. Although their media presence seems to be pretty sophisticated, so maybe they are using it.
Okay, I'm going to make a prediction about Afghanistan. I don't think the Taliban are going to run the country as the Taliban as we know it for that long. Just because of the past and that country has been very unstable. Although you never know. This could be a new Cuban Revolution where they have a totalitarian government come to power, and it can stay for a while. But I suspect not.
Aaron: I think you're right that it's going to be a different style of leadership management governing than they were 20 years ago, pre-2001. But I'm struggling to see how you could explicitly operationalize that prediction. What are the metrics there?
Max: Well, another thing to keep in mind. Look, this could end in the next few months, who knows? But the Afghan civil war is not over. There are still fighting groups being like, "We will fight the Taliban to the end of the earth." I don't know what's going to happen.
Aaron: Much in the same way that really, at no point in the 20 years that American forces, the coalition forces were there, was the war over. There was still always low-key conflict going on. I expect that that's going to persist for at least a significant period, if not indefinitely.
Max: Yeah, so again, Afghanistan, too complicated. I could give my bad take, and it could be thrown in the pile of everybody else's bad take, and maybe not look any worse. But that's all I could have. All right. Very interesting update from around the world. Very, very cool episode.
Thanks for joining me today, Aaron. Any last thoughts? I think we already gave our last thoughts.
Aaron: It's been fun as always, and it's making me want to take a trip to Cuba.
Max: Yeah, no. It was worth it. It was worth it. We should plan a trip together when we can.
Aaron: Maybe a future Local Maximum tech retreat to be held in Havana.
Max: Imagine if we record... We could bring this Zoom to... Can we bring the Zoom device in the country and record an episode from Cuba? They weren't checking my bags on the way in.
Aaron: I would imagine that recording equipment would not be that controversial. But then again, maybe it gets you flagged as a journalist, and you get extra scrutiny. I don't know. This is way outside my realm of expertise.
Max: Yeah. Well, all right. Maybe we'll try. The worst thing that could happen is our items gets confiscated.
Aaron: Future goals.
Max: All right. Great. Thanks again, Aaron, for coming on. Have a great week, everyone.
That's the show. To support The Local Maximum, sign up for exclusive content and our online community at 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.
