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Join JD, Bondor, Anton, and Cory for a deep dive into the intricate world of Bitcoin hardware. They explore the critical role of silicon manufacturing, the risks posed by centralized production in China, and the potential for decentralized manufacturing in the U.S. Learn about the challenges of hardware backdoors and how they're being discovered and tackled in the Bitcoin ecosystem.
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Hosts:
JD - @CypherpunkCine on ๐
Bondor - @gildedpleb on ๐
Anton Seim - @antonseim on ๐
Cory - @PykeCory on ๐
Sponsors:
Unknown Certainty - The Bitcoin
Ad Company
IndeeHub - Reshape the Business of
Storytelling - @indeehub on ๐
Bitcoin makes everything better. Join the team and our guests as we unpack how, why, and where we go from here.
I
Hope it's everything you wanted
That's always my hope and dream on this thing is that it's everything you all want and you all hope for
But what are we talking about today?
Bitcoin hardware we want to download we want to update
JD you are very familiar and close to this stuff because you
Have some connections, let's just say that are that put you in privy conversations. And so we wanted to try and have
folks
Yeah, I want to try and see like what's happening on the inside. What's the
What's the Bitcoin hardware stuff obviously?
Hardware is a part of the Bitcoin world and a part of the Bitcoin
Ecosystem and it's very important Bitcoin mining needs hardware Bitcoin nodes need hardware and without these things
You don't have Bitcoin. So yep
Good you want to start with just a high-level
Overview actually probably might even be good to just talk about the basics of like, you know
What what are the different types of hardware and then what?
What's happening in those spaces?
yeah, I think we can do that and I think we can't even dig one one layer up higher and I and if you guys
Have any more insight on the like power grid side of it because there's a bunch of different
Pieces I think the beginning of it is if people aren't aware actually kind of like the the energy money is what I'm gonna call
Bitcoin idea actually originated from Henry Ford and I believe it was in like
1940 whenever he wrote the articles an article named the New York Times I can try and find it
But he essentially posited this idea of an energy based money
Hashtag Bitcoin and so it took a while but it was interesting because he was thinking about this and what he posited in his article
Was if you have a money that's backed by energy or a currency that's backed by energy
Which is something that's finite based on physics because you have to have conservation of mass and all that stuff
Wars would end that's literally what he posited back in the day
Was you would have wars end because you can't fund these endless things forever
If you have a currency that's actually based on something and so flash forward to now where we have the tariff war going on
or we have
You know the the
centralization of not just Bitcoin mining but the centralization of
manufacturing
period you know that people don't realize that the largest manufacturer of
Semiconductors in the world is a company called TM TMCI, which is basically Taiwan
Like silicon manufacturing company, and I think it's TSM. They did just announce that they're opening a plant
I believe somewhere in Texas
But if you take China so mainland China and then Taiwan those two entities and merge them together
Which this is actually why everybody was always talks about Taiwan. Like why is Taiwan so important because Taiwan as a
small
island in the Pacific Ocean
Equates to I believe 56% of all silicon production in the world. They're the largest manufacturers of silicon
Yeah, then if you take China mainland so you take mainland China and silicon and
Taiwan and merge those two together that equates to like 94% something like that. It's it's in the 90s
Percent of all manufacturers silicon in the entire world. Why is that important?
because at the end of the day if you don't have silicon these things don't work and
The issue with that is we've become so dependent as a culture and as a society on
Silicon manufacturing the the biggest
risk we have in
Terms of society not just Bitcoin is the centralization of the manufacturing of those ships because now we're in this terraform with China
Which is doing wonders to kind of remove a lot of the inflation
We're actually seeing deflation in the market, but the big issue that we're seeing to go to actually we're gonna question is now
We're now getting an understanding though of the danger. We're in
When it comes to the centralization of the manufacture of chips not just for you know cars and for computers and for all that stuff
But the centralization of chips for a six for Bitcoin
China just said yesterday, which again we don't have proof of this, but they said they just sold 15,000 Bitcoin
Yes, I personally don't believe it show me the UTXO show me the transaction
but the reason that that is actually super interesting which now plays back into the hardware thing is
Hardware and software are really difficult to reverse engineer, but hardware is even harder because if you can get software
You can kind of poke and prod at it really quickly if you have a computer you can kind of look at it
You can open it you can look under the hood
Hardware is not that way think of hardware as a gated thing where if I you know you send water down a hill
It's going down that hill
It's really hard to push water up the hill
To try and see where it floats because like if you push the water down the hill you see it goes in all the different
Like you know crevices and does all that, but you can't really push the water back up the hill
So if you're trying to reverse engineer it, it's a lot more difficult to find
Hardware back doors so like Scott and the bid axe guys are doing a lot of really good reverse engineering
That's actually how they made bit X work, and they're kind of putting it all putting all that out there
but being able to find a back door which a back door if you're you know if you're familiar with the term if you've heard
the term a
Software or a hardware back door
Would allow you to put something into the hardware or the software that would give you complete control over it one of the things
I think it was on Rogan or
Tucker the other day, and it's been kind of going viral on the internet is the Department of Homeland Security when
Somebody was importing a power grid so to manage the electrical grid
They have these giant transformers somebody brought in the transformer from China
And the DOD heard just caught wind of something and what they caught wind of was this
Particular grid thing had a hardware back door in it ie China could turn off. Thank you camera for freezing China could turn off
this
piece of our power grid
Ad nauseum as they would want to do and that thing goes into now
What the bigger topic of this Bitcoin mining stuff with the centralization of all of these ASIC chips being built in China a?
Nation that has been openly hostile towards Bitcoin
By kicking all the miners out. You know
Well, they've attempted they've attempted to be hostile they've attempted, but the problem is that
Bitcoin has a higher level of game theory than they can engage for sure and so the really that mustering right
landing the plane though is
you have
Centralization of the manufacturing of these chips we need to decentralize that and
That's honestly one of the biggest problems that we have and personally I think would be interesting to see
How we can get that here at LA that's kind of where it is
So I guess the question to open it up is
You know and I just kind of like went high level on like a bunch of different things, but hardware back doors
and then like militant nation-states can
Bitcoin survive that I
I
Mean yes, but to like to even just to just like wrap that up into like a
More digestible entry-level kind of thing what JD is talking about here is
To mine Bitcoin you need hardware and
That hardware needs to be manufactured
China
Presently manufactures most of that hardware some would you say 90 think China's actually for when it comes to Bitcoin so all
Silicone is like 90% I believe when it comes to Bitcoin mining. It's like over 99%
There is a very few if any a six not manufactured in China
so if if there's the possibility of having a back door on a
Bitcoin
ASIC minor
Then that can for instance with the ant bleed
Vulnerability, which I don't fully understand, but it it's it's kind of a remote access kind of thing
What's like hey, you can shut down somebody's minor from China?
Because there was a vulnerability a back door that they put into these miners this happened years ago
Actually, I haven't again last week with the new firmware up to in the s21 pluses
Yeah, so there's another interesting thing. That's continuing to happen. Yeah, so essentially these hardware back doors are
Are real we're starting to see that they're real or rather. It's seeming like it's plausible that they're real and
They're starting to be
Put in place we'll put it that way and so it's a shout off just one minor
They used a back door to shut up one minor so no there is a firmware update for the s21 pro
plus I think and
After people were doing this update they were no longer allowed to mine on certain pools
And so their miners just would not connect to those pools
and so that's the kind of stuff that we're getting into is that is if an update is pushed and
You just kind of are doing what you're doing you're doing you're okay cool
We need to do the newest update because I've got security bug fixes or whatever
Could you do an update that bricks your minor from be or rather?
Restricts you from doing what you want to be doing you know because ant pool is the largest Bitcoin mining
conglomerate
Not just from hashrate, but from block temple construction like where there's a whole bunch of different things here
But hardware is so we want to talk about but they they legitimately did something or rather it appears
You don't have proof yet, but it appears. There is something that was done that is
causing a
ruckus with some people trying to mine on particular pools and
It's it's only after a software update because the people who did the update on some of their machines and not others
The machines that were not updated are still able to mine on these other pools
so that's one of the issues are starting to see now is the game theory of if China wants to win the Bitcoin war
They're going to war and they're actually gonna like start doing stuff like this. I mean
hilariously they've also just
allegedly sold
15,000 Bitcoin for gold right so I
Mean they're interested in control right any power structure is interested in control so whether or not they believe that
Bitcoin then nobody can do anything about Bitcoin. They're still interested in the control. They want to control Bitcoin right oh well
You have fun with your bitcoins as Trump says, but we're still gonna try and control that ecosystem now
The thing about Bitcoin is that nobody can control it and
The the result of that is is is just straight up well
We really don't like that. We are manufacturing a six in China, so let's manufacture that in the u.s.
Or let's figure out a better
You know less controlled situation. I want to take ownership of that pipeline on you know figure out how I can get
How I can solve that problem how I can meet mitigate that risk how I can reduce that
Exposure right
Yeah, I agree. I'm curious
This is definitely gonna be a topic where I'm the one that needs it to be explained to them like they're five
But to me the hardware backdoor is such a bigger deal
If you're running a node if there's somehow to some way to manipulate know yeah at a large scale
Because the ability to prevent
Miners from mining just makes it more likely for a short period of time that other miners are gonna get the Bitcoin instead
Which doesn't actually threaten the system at all?
It's a way to gain
Razor-thin odds it's like pushing the casino in your favor a little bit
Yeah, in terms of a threat to Bitcoin
It's it's kind of a complete non sequitur to me right if you're if you're manipulating miners
Yeah, because well, I mean there is a threat there like you can you can
Reverse transactions within a certain time frame you can do you can you can cause damage?
But the network is resilient, it's that that damage will will not be very long lasting
No this guy right here
These are all this is my
Raspberry Pi
high availability node
To your point directly
Corey those are that's that's five Raspberry Pi nodes
Orchestrated together using kubernetes and
if
Raspberry Pi like if that found if the Raspberry Pi foundation
Basically was infiltrated and they decided oh, you know what one of our primary use cases is for Bitcoin nodes
so we're gonna
Put in a backdoor in the hardware for Raspberry Pis
that basically says oh we recognize that a Bitcoin node is running on this Raspberry Pi and
And
We're gonna you know, oh we oh they usually use this particular
consensus
mechanism
21 million Bitcoin. That's the standard mechanism. Well, if you're running on a Bitcoin or a Raspberry Pi node
you know if it has a
Back door, maybe they maybe some nefarious actor would want to change that back door and that's like that's the real threat
By the way, I made this node years ago
I do not recommend using Raspberry Pis as nodes anymore, but it's a whole nother conversation
But um, yeah, of course, that's what I mean with the node
That's yeah, the back door that could actually real a significant number of nodes feels like the real threat
Yeah, and that all would come down to the silicon though
Right is what the thing the the brain of the node is the silicon and that is the the key here is the centralization
Risk outside of the ASIC construction is the actual CPU or SoC software or system on a chip?
Infrastructure like or like hardware infrastructure that would cause these issues because if you're you know
You build your hardware in such a way that it sees a Bitcoin transaction
Coming and it just basically flushes that out
You know that they flip a switch and it's like cool now all nodes that were manufactured or that exist outside of China
Essentially just flush Bitcoin transactions now, we're gonna get into an issue now again
we're getting over my head when it comes to actually how some of this technical stuff works, but the the TLDR is the
decentralization that was the risk and so the question comes in do you guys
Do you guys ever?
be
You know manufacturing coming back to LA you guys see this like that's been actually one of my hopes for a long time
This is seeing this become big. Yes
Yeah, that's what I'm hoping but I mean, it's gonna be difficult. I mean before I answer I want to hear Anton answer
Well, I'm not I'm not trying to change the subject
I love talking about this stuff, but I do want to bring up another thing
Do you guys remember in the late 90s to early 2000s? I actually even before that
Because we're all about the same age. Do you guys remember Circuit City or?
Fries electronics. Oh, yeah, and you go there and you look at the latest
Sony little or those things called the little flip computer things
You got Vizio or the PSP?
Yeah, but what they call that device where it's like a little mini computer that everybody used. Oh the the pocket PC type things
Yeah, there was a word for it. Yeah, they're always coming out with new
Hardware that was really cool that had different features and now when we think of hardware we think of a black
screen a black mirror and
Something that I think a lot of Bitcoin errs
Get excited about have gotten excited about as people become Bitcoin errs is all of the weird hardware
That's involved with Bitcoin. You have hardware wallets like there were ledgers treasures
Cold card, you know cypherpunk ism has this hardware aspect to it. Maybe that changes in the future, but
You know if you've ever mined if you've run
GPU mining or if you've had a six
There's a lot of different hardware that's used for it. And in the future if we're using Bitcoin as money
There's a lot of different ways that we can interact with the world like bond or and I were talking about before we went on
The tap card that people are using for lightning in Costa Rica
there's all this cool gadgetry and people have to make that gadgetry and
So there's I'm just saying there's a big opportunity for people to manufacture actual products again
And so we'll we'll manufacturing come back to LA. I think yeah
I think it already is starting to do that on a on a small scale the fact that a cold card
This is an LA but a fact that a cold card is made in Canada as opposed to China
You know, maybe that maybe some of the electronics are Chinese components, but it's assembled in Canada
it says made in Canada on the device and
You know
I'm just trying to imagine what that's gonna be like in the future
They're gonna be things that are made in the USA that are these weird hardware devices that we use to interact with Bitcoin
I think probably there will be
NVK who makes the cold card actually posted about this to a degree. I believe some of their
Hardware circuitry is made in China if I remember the the tweet
Specifically but I could be wrong on that so NVK or anybody if you're watching please correct me on that but
But yeah the the the issue regardless though is the with apologies to NVK
Yeah
I'll try and find out
I was trying to read I couldn't I couldn't remember though
Maybe his thing was saying that you know making in China is the problem
but I think that the tweet though that was more specific was
China does have the
Largest in the same way. We have brain drain for like software engineers from India. They have the largest brain drain of
Really high value high
Like
Insight and
Understanding silicon manufacturing
We just don't have that all that goes over
To China because they have the plants because like to drop a silicone plant
I believe is it's like a 15-year venture in 2 billion before you're even
Like turning it on to make it work kind of thing and we have no incentive to do it right now
Because you have cheap labor cheap manufacturing. The infrastructure is over there right now
The incentive is gonna be you know
If trade wars heat up turn into real wars and all of a sudden you can't get the silicon the value of bitcoins going
Up people want to mine Bitcoin
We're gonna have a massive incentive to make new bigger faster more energy efficient a six and have them in the United States as
An actual race to mine Bitcoin starts to take place that gets really feverish
I mean, they're already firing up nuclear power plants to run
What are essentially data
Facilities so that they can run HPC high-performance computing is what they call it
AI as soon as it was financially viable. Yeah to underwrite an AI
We figured out climate change
Climate change not a problem anymore
The climate changed it's better now. It's the densest form of energy we've ever discovered. Yeah, it was that one
Wow, yeah, it's interesting. There's a lot of
Yeah
Just power and yeah all the things so in terms of LA
I mean Corey and JD you guys were both
Did an entire episode about the studio space in LA and how the Hollywood the entire industry of Hollywood is essentially
bifurcating and turning into a
distributed storytelling
device
internationally, right
Historically that all of that industry took place in LA and
historically to produce movies you needed
unbelievable amounts of space
right
Warehouses on warehouses next to warehouses like so much of that space today
I imagine and Corey you probably have better numbers on this than I do. I don't have any numbers
So much that space largely goes unused because the productions are not shooting here in LA
Consequently, that's true. And and you just just just drive through the city of industry. It is warehouse after warehouse. You can like pull up
pull up a
Google Maps and like look at the east side of LA it is
Huge big box actually had an internship at a big-box real estate commercial real estate firm in college
And we would just drive around and look at all these like massive
warehouses
most of that
Back when I was in college was was utilized for
Distribution it was you unload your trucks you or you unload your your shipping containers
It sits in the warehouse and then it's shipped to the rest of the country because LA is the biggest port on the west coast
now
what does that look like in terms of
Retooling the economy, right like half. Oh, well, LA has this incredible already connected infrastructure
Does it have the?
whatever 10 mile
Square my 10 10 square mile manufacturing things that China has no
but we have all this infrastructure that's already there ready to go and
It's it's really fascinating to think like well jeez if
You you start switching the levers of the incentives in the the political landscape and like all of this stuff can come back
Pretty quickly. I mean, there's a whole ramp up of difficulty with bringing
Manufacturing online, but the space is there the infrastructure is there at least there is enough
Yeah, enough enough infrastructure and enough like way to get it's like to okay cool
We got our foot in the door. Now we can get to the next level right proof of concept. Yeah
For sure. I still think the space is so much more expensive even than going
To like the desert Nevada or like outside of Phoenix right within a drive
You can get to so much empty land where you could
I think the space isn't the issue. I think I think it's not coming back to LA
Manufacturing at all all due respect to the trade war because when China becomes non-viable
There are the a hundred other countries that want to do it and they can still do it a tenth of the cost
Because our labor costs are too high and I don't know how we're getting around our labor costs being too high
It's it's I don't know how you put the toothpaste back in that in that tube
But
Yeah, that to me. I just need a deflationary currency. Yeah, we've got that taken care of but could do that
Yeah, that that was actually one of the biggest things that orange filled me from BTC pins
talking with with him down at his meetup when I first became a bit corner and and he kind of explained to me the
the deflation of of
Job titles and so what he means by that is, you know, if you're a really damn good writer
It doesn't matter where you are. You're gonna be able to write and you're gonna get paid the same as somebody else
Regardless of where you are in the world
Then AI is gonna make that even more true because at the end of the day and this kind of goes to what you were
Talking about in the in the last pod
Anton where it's like you can put your books from your taxes into this AI and it'll tell you exactly how much money that you
Oh, so you're not gonna need to go to a person you can literally just use this AI and so then what you're gonna actually
Be paying for is it's like the job costs, you know, I'm gonna use Bitcoin at a million
So if the job costs a thousand sats a day, whatever it is
Or a thousand sats an hour
But what you'll pay extra for is or what? I want somebody closer to me
okay, so like the premium on somebody closer to me is like 250 sats or whatever it is an hour and then the premium on
Corey's take on it is gonna be another 300. So like I might pay like the standard for
Chipset manufacturing person a is a thousand
But if I want them closer to me, I'll play a premium for that if I want Corey's specific take
I'll pay a little bit of a premium on that and so it's like everybody kind of knows
What the what the rates are?
Globally because everything is just settling on chair, you know on L twos or whatever
But the the the
Skillset is what you pay for and then like the bonuses of like, okay
How close to are like how close to me? Are you how close to manufacturing? Are you that that that that I?
remember
Back in the early 2000s. There was this
director, he's like a commercial director and he lived in the suburbs in North, Texas and
Everybody was like he's not he's not legitimate. He lives in the suburbs and
You had to live in downtown Dallas to be
Legitimate in the commercial industry now if you have an Instagram and it looks really good
You're legitimate and nobody gives a crap where you live and you get paid the same amount and I'm witnessing this in my own industry
I'm a cinematographer by trade and I know there's a guy who lives in Iowa who is really in demand
He just loves Iowa. It's where he was born and raised. That's where he lives
He gets paid more than I do for doing work. He just flies wherever he's gonna go
And so yeah, it is a little less important when it comes to job titles where you physically are anymore
not only because things are so online but also just because the ease of travel is you can just go anywhere I
Yesterday I had a job in Phoenix. I literally flew from LAX to Phoenix and back same day
I commuted to Phoenix for the job. There was no problem
in terms of in terms of
Manufacturing this really gets interesting because of 3d printing how much is it necessary?
To do that. Oh, I got a manufacturer this part this teeny little plastic piece
In Chile, and I got to ship it to China to be assembled and it's got to go through here and there and it's like
why don't we just print the print the piece with and you know, not just like silly plastic parts, but like
the
legitimate hardcore 3d printed metal
like pieces that you like really
Specified
High grade stuff that you can. Oh, yeah
well
we just bought the the printer and that as as people realize you can do this the cost of the printers come down and like
the whole thing
Wait a second. We don't like what kind of scale are we looking at here?
And then all of that again to Zack's point on the the pod you guys did
Bro, it's all being distributed. All of it is decentralized now, right all the manufacturing like
90% of 94% of manufacturing takes place in China 99% of the chip manufacturing. There's gonna be
Some other place where it makes more sense
and then there's gonna be another place or it makes more sense and as the as we push the limits of you know,
How close we can go to the physical the physical limits of reality as we get closer to those?
As we get closer to those well, then the economies of scale are gonna say like well, you know
Any anybody who wants to manufacture a six they can just do that
Right now we're at the stage where it's like anybody who wants to run a miner in their home
They can just do that which is cool. But like you you start to
Unravel this a little bit further and push a little bit harder on the same logic. It's anybody who wants to have a
basic manufacturer and their home can do that, you know, that's
Decades away probably but it's still like that's that's the direction we're headed. It's crazy to think about that. Yeah
Tesla has done that to some degree. So Tesla gets talked about as being the largest manufacturer of
US made cars with US manufactured parts
But Tesla also has a factory in China where they make cars that are made in China
But the cars look the same if you take a Model Y in China and a Model Y in the United States
They look the same one is made in China one is made in the u.s
And it makes sense because they have a robotic arm that is programmed to make the car
You just put the raw materials into you know at some point
this is not exactly how it's done now, but at some point you just put the raw materials in a
Computer program and a robotic arm just assembles the thing and you can have multiple
Assembly plants in multiple places all over the world making the same stuff you hit on one unique thing there Anton to on the
Raw material
Transformation into the thing because Tesla is actually doing that exact thing
I've heard Elon and a couple other people talk on that is the the other issue is the raw material
Manufacturing process where it's like actually making the silicone that you need to actually like the silicone wafers and menu and
Manufacturing those into like creation and existence type thing
That I think is also another thing that's like regardless of who can actually make
Like do the printing on the chips because it's like once you make the chip
Then you have to like do all the laser etching and everything on the actual
Wafer, but it's like turning the raw
Silica and everything else like that into the actual wafers is also another
completely
centralized
Thing that Tesla's doing a good job of starting to you know distribute and and and make I think also some chips are many to manifest
in Mexico
But yeah, it's it's it's I agree with you Corey that there's gonna be
It's gonna be hard-pressed to get that stuff here, but I'm gonna certainly possible
I just think that we had like the wave of globalization basically since the 90s
was
multinational companies dodging taxes and finding the cheapest place to to make their goods and all of that works when
America's the most powerful we spend half of the half of the half of the naval spending in the world is American and
that's not by coincidence, that's because our shipping lines are perfect and they're protected and
there's absolutely no difference to an American multinational company whether something is is
It's fabricated in Cambodia or Vietnam or China or
The the middle you know the middle of the country middle of America
And that's been true like those assumptions have been true for all this time
And it feels like those assumptions are starting to unwind and we're saying it's not possible
It can't happen, but it's just not as financially viable as if the world was as peaceful as it was in 1992
Which basically just moves the supply-demand curve a little bit?
And probably makes goods generally quite a bit more expensive
I'm curious on your take on this Cory because I think you might know more about it
but can you unpack a little bit about the
like rise and fall of Japan during the 90s and kind of like
You know because I'm curious like I'm on a Japanese camera right now
I think most of you guys are in Japanese cameras right now
It's like they have
Really good optics like they still have that thing that they own like optics
Anywhere in the world if you're gonna get lenses or whatever you might have Leica which was I think German
Like for the most part you're using like you know Canon Nikon Sony all these are you know?
Japanese optics to a degree or Korea, but like what what what kind of happened there?
Yeah, what kind of happened there, can you kind of yeah?
I'm not I'm definitely not a scholar on this my dad taught a lot of this. He's a he's a supply chain
Like business school professor about supply chains and ops management and inventory management and all that
But I mean Japan just dominated innovation there aren't that many countries in the world where innovation is really protected
And you you know you we talked about most of the countries in the world being capitalist, but in most of the countries
If you start a company and successful the government can just take it from you. That's true in China
So the best Chinese entrepreneurs come to America the best entrepreneurs anywhere come to America. It's basically for the past 50 years
You know Brazil's okay, Japan's very good. Germany is very good
America's very good in terms of actually protecting IP so places that really fostered innovation
There's only a handful of places
And they pulled you know America mostly pulled the entrepreneurs from around the world because they want to capitalize on their own value
Japan did that really well. I think the way that they've tapered off is genuinely just
Massive massive population issue they have an incredibly aging population. They didn't value children at all they didn't value family at all
And there's this mix of this new world old world. That's led to this population bomb
That's blown up and is an enormous issue for them that that to me genuinely is by far their biggest issue not a
Lack of interest in innovation or a lack of interest in being a part of the world economy. They just didn't
They just didn't have kids. It's pretty straightforward. They should have been a power player of the past 10 years
Well longer than that the power player of the last like 90s 2000s
I forget when when was the the book made like there's a famous book on this called Japan on top
and if somebody wants to like fat check me on when Japan on top was released, but
It basically marked the top the thesis of the book was like Japan's manufacturing their culture
Their innovation they're like every single thing basically says that Japan is going to be the leader going into the future and
when that book was published
that marked the top of
Japan that's a real Jim Kramer call. Can you imagine being a Japanese inventor at the time like come on?
Yeah, so I mean the the results of that like from that point like that was the height of the
Unless my history is incorrect, but that was the height of the the Nike
How we pronounce it like their stock market, which
That was the height of their stock market peaked and it didn't
Return to those peaks until like the last month. I think yeah, right. It was over 30 years
It's been such a
Long it's been a long slow to unbelievable long road. Yeah, not the last 10 years the last 30 years like it's just yeah
No, it's really true. I just
Just crazy. Yeah, it's been it within my adult life that they've been a relevant player in tech and hardware and yeah and innovation
But in you know decreasingly so and I didn't actually realize when when that Japanese carry trade
Blew up. I didn't realize how much foreign investment was propping up their currency. That was incredible
I didn't realize the volume behind that trade
But it's pretty savvy move by them for a long time, you know
Yep, get an enormous amount of you know for an investment by basically just giving it away for free
Anton can you can you unpack?
You're really close to this
Like the cultural context and what what you know, cuz again going back to hardware manufacturing in like Japan with you know
the lack of care for families, but can you unpack the
Like the cultural context because I think you've you know, you have successfully tapped into cultural like ice twice
Like how do you how do you see us pulling out of this tailspin? Can we?
Well, yeah the way that I see us pulling out of the
cultural tailspin is essentially things get they're probably gonna have to get worse and
There's gonna have to be some sort of collapse and at the exact same time the time is not gonna be perfect but
there's gonna be a point where
Bitcoin essentially decouples becomes incredibly valuable and then the people like us frankly
who are Bitcoin errs are going to have a lot of
For lack of a better word. It's gonna be a lot of power
to
Deploy the capital we have to do the things that we want to do at the same time as that's happening
even people who haven't been Bitcoin errs are going to
They're essentially gonna buy Bitcoin. They're going to see the value of their own money growing
It's gonna slow down their spending a little bit because they're not gonna want to spend money that is growing value
Essentially, they're gonna be investing in Bitcoin as well
How we get there, I don't know
I don't see things going in a positive positive direction for a long time
Like Wanderer was I think it's Wanderer was asking if manufacturing is gonna come back to LA or maybe it was you JD
Things are so bad from a regulatory standpoint here
There are so many laws on the books that make it so hard to do any kind of business here that the
Taxation the fees you're essentially punished for succeeding here and it just drives out anybody who's doing innovation punish for even
Participating here whether or not you succeed you're punished for participating
Yeah, if you obey the laws here you get punished for it. If you completely break the laws
It's a free-for-all you can do whatever you want. But if you know business at all
Being ethical is the way that you succeed in business being wildly unethical
Let's say you're a drug dealer or you're mafia or whatever. There are consequences for not doing things ethically
but if the environment is so punishing from a regulatory standpoint and
Essentially people vote for this stuff. It makes it that makes the cost of living too expensive
It makes the cost of doing business to it expensive
And so even though we have all of this infrastructure here in a place like, California
Which is like the Shangri-La of the world. This should be the best place ever
It's hard to do any kind of business here
so that stuff has to massively fail to a degree to where the
Mentalities of the type of people that come here have to then want to change
The systems and those systems don't just change overnight. They take a long time. And so I don't know how all that shakes out
Yeah, good
Here's an interesting take on it. This is just a new thought so
Shoot shoot down if there's nothing there
But there's a theory
You guys have you have to have heard of this theory if you haven't I'll explain it
But if you haven't here tell me if you haven't which is the nothing ever happens theory. Have you heard of this?
Okay
So the nothing ever happens theory and you go look it up because I'm gonna butcher it right now
But it's this idea that like nothing ever happens. Oh, well, there's this emergency
But then there's
administrators that are that exists to handle the emergency and so the emergency is handled and the results of the emergency is that
Well, nothing really ever happens because it was all just taken care of
so and it applies in this these really weird ways and you can you apply like I
First had this thought like in Trump's first term of president when they're basically something like
The mainstream media is essentially saying
We're gonna enter World War three because Iran is gonna send some nukes over here. We're sending nukes to Iran
This is happening this week. This is like this is like a month before kovat something like that, right?
but then the administrators got involved and I realized well, this isn't
Nothing really happened nothing there was no World War three now some things do happen obviously with kovat
But to bring it bring it home to the point that Anton's making or not to the point that Anton's making but to
To have a further thought about it
the state of the world as it is right now is
The is the nothing ever happens world, right?
When people say things are gonna get a lot worse. Well, maybe they get a lot worse, but
There's all these like we have this insane administration state that basically just
Quote-unquote manages all of these things like oh, it's gonna get so much worse
But then there's like a thousand people employed to handle that particular problem. It's this weird
Unbelievable weird fiat world dynamic, right? So nothing. It's always a little bit worse
But it's never catastrophic. It's like the riots. Oh, there's so many riots, but
Wow, we have all of the riot gear already. It's like these weird dynamics of
but this is not really a
Problem. I mean, you know again real real disasters really happen
which is
the fires here in LA burned down a whole bunch of people and burned down a whole bunch of buildings and a whole bunch of
People lost their entire existence, right?
But like what's changing from that like literally nothing is changing
The entire administration state has completely just dug in their heels more like oh, well
We got all the men. We got all the consulting firms working on
Making bringing people there the permits so they can rebuild their homes
But like what is it the Palisades have approved permits for like less than 10 homes or something. It's like
No more than I thought
It's just it's like none of like none of this is is none of these problems are like
none of the the disasters actually
Result in anything changing. I think that's what I'm trying to get at
So when people say things are getting a lot like it's got to get a lot worse
I'm sitting here. I mean like well, it's never gonna get a lot worse. It's always gonna get a little bit worse
It's never it never goes all the way, but it always gets a little bit worse, right?
But that's just the incentives of Fiat
Some I don't know just throwing that out there curious about your like your thoughts because it ties back into
Anton what you're saying like yeah things got to get a lot worse for people to wake up and I'm just sitting there thinking
No, no things never get that much worse. It's like yeah some people's lives like bad things happen, but
at a large scale the last
Worst thing to happen in the last 20 years is basically two things or maybe three things which is 9-11
30 years
Kovat
BLM
GFC for things right and and what are the what are the results of that how much of your lives have changed because of those things
To me it feels like I'm kind of living in this weird
Twilight zone where it's just kind of goes on
It's like it just kind of goes on. There's the ongoing joke. Yeah, we're still in March of
2020 that's groundhog nothing is
Nothing has changed since the shutdown. It's just the same thing over and over again
Anyway, the point the point here. Yeah, the point here is that like I
Don't necessarily think think things need to get a lot worse for people to change
I think it's I think it's actually just an intellectual switch. I think it's it's wait a second
We just push on Bitcoin more. We explain Bitcoin more. We get out. We should like take the time to like really try and
Change people's minds intellectually about this stuff go through the logic and see that see that this the logic is sound
Do you agree or disagree with the logic and and go from there? I don't think it necessarily that it's this
Like catastrophic end times kind of thing. Anyway, okay all done
Can I just say one thing on that and
It's very positive. It's a very optimistic way of looking at things and that's good optimism is it's important to
Feel optimistic so that you continue and you take steps forward in your life
One thing that's also optimistic is you can say well one thing that hasn't changed is Bitcoin hasn't changed for the last 10 years
it's just continued running and
Nothing ever changes and one day to the next like there's not that big of dramatic changes and even for us as big winners and
Yet, if you look at the price of Bitcoin 10 years ago compared to today, it's gone
Essentially a hundred X. So nothing has changed and yet over 10 years if you have been
investing into
studying Bitcoin
Investing your actual money into Bitcoin the money that you've been invested
I mean wouldn't have 100 X unless you put all of it in 10 years ago
But if you've been dollar cost averaging you've been seeing your purchasing power
Increasing during that entire time. Whereas if you were saving dollars, you've seen your purchasing power
Decreasing that entire time so nothing ever changes
But at the same time you get to choose at this point what does change for you over? Yeah, exactly. Yep. Mm-hmm
Nothing ever changes for everybody all at once
But things you get to in the whole social media like I live in a silo
I can just choose who what all of my inputs are and nobody else has the same inputs all of your stuff
You get to essentially choose
What?
What things do you want? This is like a very like Christian concept to which is the idea like oh, well
You know the CS Lewis version of hell well hell is just you just get what you finally want like that's what hell is because
Bro, if you just if you just wanted the big house and that was the entire you'd lived your entire life
And then you die and like that was your God your big house. Well, you get your big house and in hell great
Have fun with your big house man for eternity and there's nothing else that you can get just the big house, right?
it's
It's interesting. I'm kind of just I was I'm using a
Grock to look up some Bible verses. So if the Bible verses are wrong blame grocks, I'm I'm not quite checking a lot of
theological inquiry to grok to
But it's interesting the whole nothing ever changes theory is actually biblical to a degree
Ecclesiastes 1 9. Oh, yeah
literally
What has been is what will be and what has been done is what will be done and there's nothing new under the Sun
Is there a thing of which you know is said to see this is new
It has already been in the ages before us. So literally that is it nothing ever changes is biblical in that sense
It's interesting because that was actually one of the things that
If you think about it
You know you have an idea and this is you know
La is so litigious and what's one of the first things I learned when I got here was just how litigious ie suing everybody it
is
And it's like the number of people like you stole my idea you stole my idea you did my thing you do whatever and
It's just so interesting. It's like there are you know, seven billion people on the face of the planet
Outside of the fact that your DNA and you occupying a specific space at a specific time
Will be completely unique
like that just will be but
completely unique ideas I think are
very very
uncommon
Bitcoin was one of those things and you everybody recognizes them when you see them, right?
Because Bitcoin is an amalgamation of a lot of ideas, but like the execution is the thing
People people recognize them as something new but also people absolutely
reject like
Full-heartedly get out of here, etc
Like that's another sign that it's an actual new idea because people are like so well
I mean heliocentric reverses geocentric in terms of like, you know
Our
Exactly. Yeah. Mm-hmm. Yeah solid so the point love that point
Like AI is like that like
You're good things that people are Luddites for
JD we didn't hear anything. What do you just said? There's nothing important
He's gonna sue us
Yes
Well, just you know, you're saying, you know how you know, you have something
Really innovative as if some people accept it and some people hard reject it AI is one of those things there
We're talking about just now using AI to essentially do theology research
I mentioned this to somebody recently and he was he just thought that idea was important
that and I was like what I used it for was
There was a particular character in the Bible who was mentioned in all these different books and I was like you can have grok put
All the verses chronologically for you so that you can just see him
it's a nice study tool if you're interested in this character for me this character happened to be John the Baptist and
He just didn't immediately didn't trust this
And I was like, well, I mean you can check the work like the AI doesn't have any incentive to lie to you about this
You're not you're not, you know asking the AI
You know something that's gonna make you like reject your faith you're just doing this objective research and
Yeah, I mean, that's just what I doesn't
Yeah, this goes into actually one of the things I know
Bondo and I've talked about
at different periods of time where it's like the the
The value of the work going into something like the garbage in garbage out
concept of stuff and this goes into like a greater concept of like the future of work that he sees that would love to see
which I'd love to talk about a different episode, but I'm not gonna open up your kind of worms, but it's just the
You know, the the trust is gonna be the key trust is the currency of the future
Period, you know right now. I'm working with some people and the you know, I'm like thinking like oh
I don't have like a proper contract in place with this person yet
And you know, sometimes that just happen even just in you know entertainment in general. It's just a
Traditional thing is like hey, are you free Thursday to work? You don't know anything about these people. It's literally just cool
Can you come be a gaffer or be a DP or be or whatever and then people show up and they do work for you
and then you know
They expect you to pay them and they want you to pay them and you should pay them
but the the thing is it's like LA and entertainment are
One of the few remaining completely handshake businesses in a lot of ways
That I think actually will be the way of the future just like if you guys know the story of Sriracha, you know for until like
Sriracha all of the chilies were grown by a farmer that
Just had a handshake deal with the the guy who founded Sriracha
Literally, that's it. He just was like, hey, man, you grow these chilies
I'll pay you and the guys like cool and he just basically kept sending the chilies and the guy kept paying him and
Kept going back and forth and that there's that's it. They're like, where's the contract? We don't have a contract
it's just a handshake deal, so it's just wild, but I think that's gonna be actually the the future and
Agree hard
We've talked about well, first of all, please don't talk about food anymore or some of us are fasting for Good Friday
We're very observant secondly
We talked about the return to the trust economy
Where the less that you can trust what's happening digitally the more you have to trust in the way that humans have always trusted
which is the people that are right in front of them and the people that are right around them people that they know and
have history with and we've substituted that trust for this digital presence and
we gave it to things like news organizations and politicians and big churches and
But there those are things we don't know at all and we just feel like we do and I think as as that digital
Trust moves away the new trust economy
We'll just return to what it was before and we'll look back on this as an odd little blip
Where it was really easy to capture people with propaganda using this digital thing that for some reason we all had this implicit trust in
and honestly, I think Bitcoin plays a huge role in that because
Like you're I mean just at the extremely basic level. Oh
If I am cussing my own Bitcoin and I have my own private key
Hope holy. Holy shit. Do I I have my private key on my computer?
But now I'm questioning whether or not I trust my computer at all, right and like it's
Wow, right, but that's just my computer now. Let's talk about the web browser. That's on my computer. Do I trust that?
Okay, cool. Let's talk about whether or not I trust the website that's on my web browser
that's on my computer and you just like the whole thing going back to the very top of the conversation and
All of this runs on
a microchip do I trust that right looks like the hardware itself do I can I trust that and
You really start to get anything like and Bitcoin basically
Calls all of that out. It says well, maybe you can but like you probably shouldn't and then you just you just go down that rabbit
Hole of like no, I don't trust that I don't trust that intercept and then all of a sudden Corey to your point
The things that matter the most in everyone's life are the real-life in-person
relationships they have the
Handshake is
Way more important than any legal document or DocuSign BS signature that you can ever create
Your hands that you look at somebody in the eye and you shake their hand. That's the deal you're getting and if it's not then like
Like
I'm not interacting with this person ever again their reputation. They're dead to me like that kind. It's like
We're it's a different
Different playing field for all of civilization like and it's awesome because it's real. It's it's like the way God designed
Humanity to interact with itself. Yeah, it's incredible. Yeah. Yeah
Now I will say when that was more the norm xenophobia was also just the assumed interaction with the world
Just the assumed interaction between cultures. Do you think we see a rise of that as we as we go back to that?
um, I
Think you have to define
Xenophobia because I think we're gonna get into
The
Yeah, I think you'd have to define it
It's probably a whole different podcast
But it's an interesting thing right the the globalization did lead to peace among cultures in a way that we haven't really seen before
Yeah, to get get rid of that do you think we know it's very
Right now, yeah, yeah, it feels like we're getting back like babbles happening again essentially
yeah, I
Would love to talk about that on another episode
You guys have any because we're kind of coming up on the hour, so what are the what are some last thoughts?
I'll give my two seconds, which is we need to
We need to start building our own stuff. That's it
And so I think it's the most valuable and important thing we can do as a as a country and not just the United States
Everybody, you know if you live in Germany, you should make your own chips
If you live in France, you should make your own chips and this goes back to though the things you should be making
Not just hardware. You should be making your own culture like you should
Be requiring people to assimilate to your culture if you're in Italy you were Italian
You know if you're in Ethiopia you become Ethiopian because the the
We as humans are called to be in tribes. That doesn't mean you can't have people in right?
You can't be a melting pot, but you are American period and so I think it's really really important actually to not
You know ignore your differences you should actually celebrate them and you should move forward in them and I think that's the problem is you know
Yeah, so
Yeah real tangible things that you can feel are very very important for
Years, we have had things go
Streaming and now we're meeting to get even though we're all in the same city. We're meeting together virtually
But hopefully one day in person
Yeah, we should we should do one of these in person. So if you think about what we ate as children
It was
Absolute garbage and we didn't realize because there was this convenience all of a sudden we had packaged food
We had cereals we didn't even notice when the grains were eating started becoming horrible filled with pesticides
We didn't even notice when the coca-cola
We were drinking started to have high fructose corn syrup or the potato chips that we're eating or the McDonald's french fries went from
being made with beef tallow, it's being made with
seed oils so
Being able to make your own things applies to everything like we still live in a physical world and
Somehow this thing this digital currency that I mean, it's not just the digital currency with this thing Bitcoin
That's united us and got us all thinking on this same thing
Even though it's digital has started making us
Reconsider how we interact in the physical world and the importance of the actual physical things our actual physical
Relationships that we have the things that we put in our bodies
It's all interrelated somehow
Yeah
the one thing that comes to mind so there's a
1970 novel by Larry Niven called ring world and
Cory
You got to read the whole series. I don't know if you've heard of this series. Have you okay?
Go sit down there. There's the original ring worlds and then there's like the extended ring worlds
You got to read the whole extended series. It's some of the best sci-fi that's out there
Not without its faults ridiculous in some capacities, but there's one thing that I thought was interesting
Larry Niven has a future for envisions a future for earth where earth is essentially this
homogenous all cultures are 100% the same and
you know, that's a it's a result of the technologies that they have and all that sort of stuff and
Listen interacting and listen to you guys talk about this and like looking at Bitcoin. I'm like, bro. That's so off
the thing that's gonna map the thing that's gonna like make humanity like
Humanity is the uniqueness of every single culture and how we all dig into our own
personal cultures and own local identities like
Maybe we get teleportation where we can like literally travel across the world in a second
you know, that'd be awesome great, but like
Yeah, but that's not me. You know like that's yeah, it's great to go to Japan and
interact with Japan and consume
the incredible quality that that Japan is able to produce but like and
Speaking of somebody who's lived in South Korea. It's like yeah, that's all amazing
But like it's not me. It's not my culture. It's not my people. It's not and
Maybe there's xenophobia in there. I don't I really don't think so cuz I like I love I love
All the people like this is incredible, but like they're not my people, right?
So, I don't know. I just I just look that look at that
I'm like, no, no, like I'd always like rung false with me. Like this is not
This is not the the beauty the depth of humanity
That really is
It immediately makes me think of the Tower of Babel which is
Thought of as this prideful act of humans and there is pride in it
But God doesn't frustrate it because they're gonna fail to be to act like God if he frustrates it because he says
For them nothing will be impossible
right
They're gonna deliver the promise of earth without going forth and multiplying
They're gonna ignore the first command and deliver what I want them to do
But without actually becoming all of what humanity is supposed to be and it's an interesting thing with sci-fi
Yes, Lewis does it in that hideous strength as well where there's there's a group of people who I now
Think are extinctionists, but communist also works
Who want the world to go back to a complete homogeneity, right?
They want the world to be a world economic forum
Exactly
but then there you know, there's people on the other side who want humanity to grow in individuality and
Connection across community and you know
University right as you want those cultures to come together in a way that cherish that it cherishes each other and as Christians
We say that that that every person reflects God differently
So every human life has the opportunity to bring something to the world to the kingdom of God
literally
Every single life has something that no other life will ever have in terms of reflecting God because it lands on an individual fingerprint
And that should be really encouraging and I would love it if our economy and our hardware
This is such a cheap way to bring this back around
But if story if story did that if culture did that if architecture did that if hardware did that right if the things that we bought
And the way that we interacted with the world was also reflected the individuality and beauty of humanity
That would be way better. So I you know
Things are gonna get more expensive because we're not in 1992 globalized free trade
But I think that was fake
I think that was a Fiat driven fake fake piece fake like
Similar to the euro like let's just make a policy that pretends that we're all friends with each other
Is it a good policy? No, but it'll be nice. Won't that feel nice, right?
And now they have this terrible currency that's lost most of its value since it was incepted. Yeah
So the fake stuff dies the individual stuff
You know the the stuff that's real that stuff that's actually driven by humans
Yeah, we get back to artisanal aspects of things but we get back to real value and pride in your work
You know and I say this is somebody who our air conditioner just died
But we went back and looked at it in our air conditioners from 1994
And so it's like 31 years on AC is wild actually and so because those are usually like 20-year units
But it's one of those things like we're gonna get back to that
We're gonna get to a place where it's like you have a 50-year refrigerator, right?
It's gonna cost you three grand four grand five grand, you know, whatever it is
But it's gonna last you a half a generation, you know
You're gonna use the same fridge as your kids and their kids, you know, and it's gonna be and it's gonna be manufactured locally in your neighbor
And then your other neighbors gonna make the chip
And if it breaks you're gonna be able to fix it yourself. Yes
Yeah
so
Cool, any other any other closing thoughts, but I'm stoked guys. Thanks for
Good stuff interesting
All right, who's gonna say it better by Bitcoin