📖 Episode Transcript

Cody Ellingham (00:00.258)
Anthony, thank you for joining me. Yeah. Thank you, Cody, for the invitation on your show. Yeah. No worries at all. I really enjoyed your book that you co-wrote with a couple of others. Decrypting Money, comprehensive introduction to Bitcoin. Thank you very much for sending the copy. And I mean, I thought it was really awesome for me as a seasoned Bitcoiner. It sort of gave quite a...

Cody Ellingham (02:10.386)
Quite an interesting take. It gave me some new mental models actually I found. really? Yeah for looking at a few things which were really interesting but I guess starting off if it's okay Anthony maybe we could just go a little bit into your background and then we can talk a little bit about the book if that's okay please. Yeah sure although I'm interested to hear how it changed your mental models but we can certainly talk about it later if you like. But yeah I mean essentially my

my background from a sort of educational professional direction. Firstly, I studied maths at university and then went in the direction of engineering into mechanical engineering, in particular, fluid mechanics and fluid dynamics calculations. And that led me to ultimately to the automotive industry. So I spent many years working in the German automotive industry.

doing engineering calculations, in particular with heat management in the car and for cooling systems and for other situations where fluids come into play, for example, driving through fords or bodies of water and various other different things. So yeah, my background is essentially automotive engineering. And the link to Bitcoin there is actually

I came to Bitcoin through a friend of mine who I met in automotive industry. were firstly colleagues. We worked together making new ways to calculate heat flows in exhausts. he was the one who he discovered Bitcoin for himself. And very soon after, a series of very long

telephone call, he explained to me why he thought Bitcoin was such an interesting idea, a groundbreaking novel creation. And that sent me down researching it more and got me into it. And he Christian Handel also from down under Australia. He we've done several different projects together in the

Cody Ellingham (04:34.326)
in that field. he also, he was the one who introduced me to the co-authors, or at least one of the co-authors. He introduced me to Marco Krohn and Marco String back in the day. And then they in turn introduced me to the fourth co-author, Zoran. Yeah. Were you, so you were both engineers, so Christian as well? That's right. Yeah. We're both mechanical engineers and we were both at that time in automotive. Yeah. Do you think?

Anthony, there's some sort of connection between people who work in the practical side and the connection with reality you get with engineering, mechanical engineering that lends itself to grasping Bitcoin potentially. Sure. I mean, at the end of the day, whatever you're doing in your organization, in your company, if you're an auto manufacturer, you have to have a thing which works. You cannot.

fake it, a car has to work, has to go forward, it to stop, to turn and so on. Of course, engineers therefore have a strong, must have a very strong connection to reality, must understand reality very well in order that the car that they produce actually does what it's supposed to. And similar for

the thinking which is quite rightly quite prevalent in Bitcoin as well you have The dominant form of money is not really acting well as a form of money So we have a form of money which is for example freely printed And then as an engineer you look at it and you study the properties you study what money should do

And then you compare the dominant form of Bitcoin to this new emerging form of money. And you notice the differences and you say, well, this is obviously a better way of doing it. Just like a steam engine is a less advanced means of having a propulsion in the car than a petrol engine. Yeah, sort of a progression of technology that sort of works towards

Cody Ellingham (06:58.312)
better systems, more efficient systems. And I'm also struck by the great foreword that you had in the book by world chess champion and chairman of the Human Rights Foundation, Garry Kasparov, which as you know, chess is a rules-based game and there's a deep level of game theory and understanding of these systems and the way you can approach it. to read Garry's thoughts, very pro Bitcoin, very insightful on the nature of Bitcoin and the bigger

I thought that was very interesting as well. How did you connect with Gary? He's a friend of Marco Strang. So Marco Strang met him at some point. Marco Strang was doing many different meetings and he was the one who established a contact with Gary Kasparov. Marco did one or two things with Gary Kasparov in a business sense. And in the course of that then

Marco asked Gary to forward for us. Yeah. You know, I thought that was interesting. And coming back to the book, Decrypting Money, for me, it was really interesting, as I said before, it gives a brief history of money, as well as some of the projects that preceded Bitcoin, as well as an excellent technical introduction, which I thought, for me, you know, having studied this for a while, it still was quite fresh. And there's some great graphics in there as well that helped.

explain some of the cryptographic primitives that underpin Bitcoin. And so I thought it was great for someone who's maybe new to Bitcoin as well as someone who's been in it for a while. But there was one thing that really stood out to me, and this was actually in the introduction, and it was just a little piece, but the way you talk about the three main groups that engage with Bitcoin, which is the original cypher punks, the libertarians, and then speculators. And I wanted to dive into this topic a little bit because I think

there's something interesting in how these three groups of people sort of interact and sort of push and pull the system of Bitcoin into, I guess, where it is today as a very robust, broader system. I guess maybe picking that topic up a little bit, mean, I'm keen to hear your thoughts on that, please. Well, the cypherpunk strand is where it all comes from. mean, you had back in the 90s, this whole where

Cody Ellingham (09:20.59)
Adam Back was also involved in this whole idea of having a strong cryptography being able to use to give you a degree of privacy and also to make it accessible to the layman. So, especially with the introduction of this public key cryptography, of course, later used in Bitcoin, anyone could use a type of cryptography which would be

as far as we know, unbreakable to the most powerful secret service agencies in the world. yeah, mean, you had this group of people who were interested in technology and interested in the application of technology to enhance their privacy. And of course, for them, it's quite natural to want a form of money which corresponds to that.

They are of course very ready to take up something like Bitcoin and want when Bitcoin came along in order to that this sort of form of human interaction, that transaction transferring value is being able to done and to be done both digitally and in a much more not completely private way of course, and transactions are of course written on the blockchain, but at least

in a way which is cryptographically secured and also permissionless as well as pseudonymous. I mean, these people were essentially primed to take Bitcoin as soon as it got out there. you have libertarians. In particular, libertarians will prefer private money. I we go into the book you'll have seen, we discuss various periods in history where

the money was not issued by a government or government linked authority or an authority authorized that exclusively by the government, but rather by private banks and they were competing monies in the same economy. this then again, Bitcoin is also going to appeal to them that you don't have a state currency, but rather a private currency.

Cody Ellingham (11:48.172)
also can compete with other private currencies in the market. then you have speculators there. I would say a little bit like they're not maybe not so much interested in some particular principles. mean, speculators are essentially to use their financial resources to work for them. mean, if you've made money and you have some capital,

of courses of interest to use that capital in such a way that it reproduces itself. And the better you can do that, or to better to do that, you're looking for different instruments in order to accomplish that goal. And Bitcoin compared to the dollar as a fairly high volatility asset is able to offer that to speculators, these high price fluctuations. So I mean, how they all interact, would say just how Bitcoin works.

leads one group into the other. If you're a committed cypherpunk, and then you come into Bitcoin, Bitcoin lends itself to, because of what it is, to a libertarian form of economics. So then you get interested in, you may not pay much attention to economics or nor on the side, but then it leads you to get more interested in this, or you buy a Bitcoin and then you see, okay, the value is fluctuating. This is interesting for me.

my own personal finances and not just necessarily some interesting idea or concept, but this can actually make a change to my personal financial situation. So, yeah. Well, it's interesting. mean, the cypher punks write code and they keep us private from the state and then the libertarians keep the money sound and then the speculators pump the number. And I think there's something in there which I think reflects

some of the other decentralization that is prevalent in Bitcoin and which I feel it's a little bit hard to articulate, but I feel like it's just another one of those examples of it being quite broad and it doesn't fall into these narrow scopes, which I think are easy to fall into where you maybe focus say on the technology side of something or you focus on just one aspect, but there's the certain decentralization that means that even though

Cody Ellingham (14:07.66)
You could consider speculators some of the traditional funds and things as being very statist potentially and kind of against maybe what the cypherpunks had in mind or the libertarians for that matter. There's something about the way they all sort of push and pull together or push and pull even in different directions. But the act of that leads to this anti-fragile outcome and Bitcoin kind of continues going. And there's something quite powerful about that which I was certainly impressed upon.

by reading about your explanation of it. Yeah, yeah. I I think and I think that also kind of spreads as well. I mean, you mentioned, for example, our appeal to engineers. And I think in various different fields, you can see how aspects of Bitcoin also has this attraction, I think, for example, legal profession, for example, they will then see, okay, you have some

organize it. have, firstly, a community which can resolve conflicts in a decentralized way. You don't have one court which stands above everyone and determining this obey the way. And you also have rules being both defined and achieving consensus in a decentralized way. So a lawyer can also take some

inspiration how a system could work in a different way. I think it can appeal to many different people. then historians as well, historians can also see the parallels between having a hard money in the past, having these private monies in the past, and then the scarcity and also the missionless nature of Bitcoin. And yeah, I mean, these people then entering the field, as I say, then they can

or all the other aspects are there and they can explore that further and all as you say as it's mixed together. Yeah well I'm certainly struck as well by I mean there's a lot of technical detail and you can really geek out on a lot of this and I enjoy that myself but when you do bring in the fact that there is this speculation element and even though there may be some people who say see the likes of the large funds or

Cody Ellingham (16:25.954)
BlackRock, these kinds of organizations purchasing Bitcoin, being involved with the ETFs and all of that. There is still something there that is powering the engine and is contributing to the overall thing. And you can't plan for that from the beginning. So even though it is an engine-ed solution and the rules have been set out, the way that it unfolds and the emergent nature of it is very interesting. And it seems like it's just in this Goldilocks zone where everything

was just right or at least good enough to sort of start off. exactly. Yeah. I mean, it was just, was, mean, the fact that it has changed, mean, of course it hasn't developed since 2009, but the fact that the fundamental principles held for so long is really a tribute to the creator of Bitcoin, to Satoshi. Yeah. Yeah. There was certainly some foresight there though. I do wonder sometimes, I mean, that was before my time, but you know, has there

been maybe a change in attitude as it's become more broad, because certainly the cypherpunks were the first and then the libertarians came in and then it took a few years for speculators to really get involved. I wonder sometimes what that progression looked like and maybe what it was like during the early days. I imagine it was maybe a bit more esoteric, a bit more technical, and that was important in the beginning. But then once it started to monetize and there started to be speculation, all of that work and that technical work sort of paid off because the system could handle

people getting involved and the thing scaling up and increasing in value and that sort of thing. I not to say, I mean, there were certainly some challenges and questions asked about the scaling thing early on, which I don't know if you have any comments on, but just the way that unfolded as well spoke to this decentralized governance model, which was also very important, still is very important to Bitcoin. Yeah. I mean, certainly at the start, you had very much the impression that

it was really an experiment. There was the degree to which it established itself and also gone over to and had these interfaces with the conventional financial system. That of course, was not the case back then. It was really quite decoupled from every other system and also the general perception of it was

Cody Ellingham (18:48.948)
And we still, of course, have strains of it today of the skepticism and then all the various different misconceptions of Bitcoin. And that was, I would say, fair degree stronger back then. there was also this, I would say there was also at the moment, the confidence level that it will really be there for the long term, the very long term is a lot higher. Back then, was clear it was

especially to the people who were convinced by it, that it was something quite new and quite a step above what had come before. But not this confidence, yes, this is really going to be the thing which will be around for a long time and will be the thing which will come through. And you had that also, especially like you then had the phase in 2017 where you had a lot of altcoins.

again, going back to speculators, a lot of all coins trading. And then this whole concept of the flipping, this idea that ether would at some point overtake in market capitalization, Bitcoin. And there was this idea that you could have either have Bitcoin supplanted by something technically superior. And I would say this is also at least speaking today, as of 2024, this is also subsided somewhat.

Bitcoin because it's had this dominance as a form of digital money, of digital gold for so long. It's built, I wouldn't say an impregnable position, but not a fairly, a very, very strong lead against any potential competitors. Yeah. And it's interesting again, coming back to this engineering background of yours, I'm wondering if you can see any analogies with say, technical developments and

engineering, automotive, or whatever it happens to be and the way those sort of are taken up by the industry because often change can feel like it's quite slow or maybe change gets taken in a very narrow scope and the broader impacts of something are not fully appreciated, especially by incumbent companies. So I mean, do you see any sort of crossover? I'm thinking in terms of automotive, you've got the whole EV revolution, you've got things happening around the idea of transport, et cetera, that maybe don't.

Cody Ellingham (21:12.526)
get fully appreciated or it took a long time for people to get up to speed. Do you see any connection between those? Well, I think what we see and what we will see is similar. I mean, similar to automotive cars are the dominant form of personal transportation just because they are so useful and you see it being taken up by people. People drive who are either indifferent to cars or actively don't like cars. I mean, my girlfriend does not like driving.

especially in the nighttime. But a car is just such a useful thing in many ways. Actually, how the car she uses it, she just gets on with it. And you see that with many successful other technologies as well. mean, like smartphones, for example, were a lot of people back in the sort of late 00 years, early 2010s. They were quite skeptical about smartphones, but eventually, essentially everyone got a smartphone just because they are so useful.

And I think you will have my prediction. I think this is what we're seeing like in real time as Bitcoin adoption will continue also for people who are not particularly interested in Bitcoin or perhaps even don't like it just because it is such a big advance over the previous form of money. It's so much better than fiat and people will see.

that the people, other people holding Bitcoin or it can be organizations as well. The organizations, other governments and other companies who hold Bitcoin have such an advantage from it. It becomes so compelling. do it even if they are not particularly interested or even actively dislike it. Yeah. Yeah. And I guess the book gives a really good history of money. It also gives an overview of the technical aspects of Bitcoin, but

I guess if we were to partake in some speculation of our own, I think what I'm very interested in is maybe some of your thoughts around some of the different possibilities that this presents because there is maybe a history of study of commodity money and what kind of digital gold would mean in a hyper Bitcoinized future, for example, but that still is relying on our previous models of say the golden era of banking in the 19th century or earlier and maybe doesn't

Cody Ellingham (23:35.49)
quite take into account sort of how things have changed so much with information technology. painting a picture for what you see in the future, I'm really interested to dive into that in terms of Bitcoin, Well, putting you on the spot. I'm quite optimistic on Bitcoin. Otherwise, haven't written the book and been having my other problem with it. as I said previously, think adoption will just

increase and increase and then essentially have the situation where everyone is able to take advantage of what Bitcoin has to offer. on a straightforward sense, have the fact that you can transact so much easily, have much less friction with the than that which you have with the conventional banking system, especially if you want to just send money abroad.

You have also the, as individuals, as families, as organizations, as companies, as people like Michael Saylor have been talking about, you have the ability to save in money. At the moment, you cannot save in fiat money. You'll lose the purchasing power if you do that in the long term. With Bitcoin as the dominant form of money, you'll have money, which is absolutely scarce.

And therefore, you'll be able to plan for the future better, because you know that the Bitcoin which you hold will not be inflated due to the fact that someone else controls the supply of it. this allows you to, I mean, if you're a family and you want to prepare for building a house or for your children's education or for other big expenses, you'll be able to

do that a lot more easily. And then on the flip side, have, course, the government will have some constraints which you do not have. of course, states print money because it's in their interest to do so. Otherwise, they wouldn't do it. And they will have to think a lot more carefully about how they spend the money. They will not have this option.

Cody Ellingham (25:58.734)
to either directly print money or to issue debt based on the fact that they are in a position to repay the debt and the currency which they can print. so governments will have, I mean, they will have to be a lot more careful and a lot more thoughtful about what they're spending money on. And this will lead pressure to things like more efficiency in government. will not be essentially not be able to afford inefficient

practices, as they would today. I mean, one, one, I mean, there's many funny examples you could spend a long time talking about. mean, one funny thing you have in Germany is like, there's various aspects of the government still using fax machines. I think you also still have them in Japan. Well, I mean, if you're in even a fairly traditional part of private industry, you haven't seen a fax machine for 20 years. So I mean, that's just a fairly

jocular example, but of course, there's many examples where you have a state spending which is probably not efficient and could be improved in this discipline which you have may change things there. Yeah, well, just pulling on that because I mean, think most people would appreciate that argument that changes that dynamic with the state and money and I think that's clear to all of us but

I'm pulling on the mechanism a little bit further because this idea of adoption and it just sort of happens and it continues, you know, potentially gradually then suddenly as many people say, is I guess one lens, one way of looking at it. But I'm also really interested in how these kind of ecosystems collide because Bitcoin really works best when it's in its own world. know, Bitcoin natively works extremely well. It's extremely easy to use, but

you always come into issues when you're trying to touch the fiat system and those on ramps and those off ramps are always the issue and that's where most people are. And I just wonder again it's a little bit speculative but sort of where this these two worlds meet and how they kind of coexist because they really seem like there's one argument that perhaps Bitcoin is

Cody Ellingham (28:15.33)
sort of on the side and it's sort of sucking value from the Fiat system and just growing bigger and bigger. But there's another idea that maybe they are symbiotic and Fiat continues to be used as a payment system because, know, Gresham's law, you spend the bad money and you save the good money. And there ends up being some sort of US dollar dominance or something like that where we're all spending US dollars, but we're all saving Bitcoin, at least in the midterm until something else happens. I mean, could you paint a picture?

sort of what you think could happen there or what the different scenarios may be? Well, obviously, I mean, I would say it's at least premature. mean, maybe who knows what will happen in the far future, but I think in the near term there, I think it's a mistake to underestimate Fiat as well. Sure, for the person in power, it's very easy for him to create money. It's an act of Fiat.

these people with this power really do have a lot of power. have lot of power. They've taken a huge fraction of the GDP of all the economies in which they operate. In the case of the United States, have enormous military power and a whole raft of other tools of power also at their disposal from going also into sort of the whole

cultural side and media influence and control of the university. the fiat itself may just be created very quickly, but it's backed by organizations which do have a lot of power. And therefore, I think it's a mistake to underestimate this. And to some extent, also, there are many

problems with this situation and Bitcoiners can and do and rightfully do and also explained all the flaws and all the misallocation of resources and all the waste and so on. But nonetheless, at least in the Western world, the fact is historically speaking, now we do have very, very high living standards and that has occurred with what has been a basically fiat system for the last 50 years. So I think

Cody Ellingham (30:35.118)
And these things then, because it's so powerful, because it has had fair degree of economic success, this then does have, of course, organizational and institutional momentum. mean, things don't just things of this nature, or unless there's some big catastrophe, tend to perpetuate themselves. So I think there will be at least, there will be some time where fiat systems and

Bitcoin do coexist. I would also say what's also quite interesting, there has been pushback from the fiat side. mean, there has been some resistance from the fiat world with regard to Bitcoin. Nonetheless, I think it could have been a lot worse. I think regulators and governments could have been, especially if they've been coordinated, and they do coordinate with some things, they could have been

extremely aggressive against Bitcoin. could have made things much, much harder than they are today. mean, the fact is, in most jurisdictions, you can. It's maybe not trivially easy, but you can buy Bitcoin. It's legal to hold Bitcoin. Mostly, it's legal to mine Bitcoin. And then, of course, we've seen over the years and last decade, really, increasing number of fiat world financial products with connections to Bitcoin, both sort of

Bitcoin companies listed on stock exchanges and then all the Bitcoin products. So I think you'll have a period where both coexist and my hope personally would be that that would be on a more cooperative rather than the confrontational mode. then as you say, with referring to Gresham's law, people will use the money which is best suited to

The use cases, so if your use case is store of value, well, clearly it's Bitcoin. It's not discussion, paying at a supermarket for your eggs and milk. Well, at the moment, the fiat solution works well. So, and this is an established solution and there's no huge disadvantage to it. In fact, with pure cash, can even be more private and you have even more privacy than Bitcoin. I mean...

Cody Ellingham (32:58.978)
To summarize, would say there will be still some period where you have coexistence, with growing adoption of Bitcoin, just because in some senses it is so much more superior to fiat currency. Yeah, that's interesting. It's sort of almost, if you look at a layered money approach, there's this kind of swap out of the reserve asset at the top of the pyramid with Bitcoin potentially. And then that means people can sort of

continue on and systems are relatively similar, know, it's still the same point of sale systems, it's still the same banknotes, et cetera, but maybe there's something on the back end that changes, which is one way of looking at it potentially. then that would reflect maybe closer to something like the gold standard then historically, but with the added 21st century innovations of digital payments and, you know, tap and go and all of these

things which we have in the fiat world as well. I'm curious maybe how those fit together because you then almost start getting the different qualities of Bitcoin where there's the real Bitcoin where you're self-custodying it and you're using it as Bitcoin and then you've got the fiat that's backed by Bitcoin which lives within the fiat world and that's kind of an interesting kind of four-dimensional relationship which is maybe a little bit hard to conceptualize.

I don't know, do we ever get medium of exchange or unit of account if everyone's still using a local fair currency denominations and they just happen to be backed way up the chain somewhere with some kind of Bitcoin, et cetera. Yeah. that's where these whole, I mean, what you mentioned about the Laird's solution, I would also go along with and that's where you have this whole, in the Bitcoin world, of course, where you have the whole.

layer two solutions like lightning or liquid RGB, etc. And yeah, you could have a scenario where you have Bitcoin native layered solutions for medium of exchange. And then you could have what you mentioning where you have still a fiat system, or a system which has been developed from the current fiat system, but with

Cody Ellingham (35:23.054)
Bitcoin backing. mean, I think it's difficult to say how it will pan out in the future, really. That's because it is so novel. Yeah. And also because with with, mean, it is also somewhere where you can banks and the financial system have to be quite cautious. They can't introduce systems which don't work if if you

people can't buy food at the supermarkets and you have really a big problem. So they have to be quite cautious about how they introduce changes to the system. I mean, even in the conventional financial system, forgetting about the big client side of it, there have been advances. mean, you've of course, this whole touch and pay system, which has come up in the last say, I would say 10, 15 years. Then of course the

transitions to having your smartphone wallets and being able to pay with this. And you've had the whole phenomenon of new banks. Of course, you've had the digital payment systems based on fiat systems like PayPal and more in the US. I mean, I mean, as we wrote in the book, finance industry does take up new technology. And, of course, from a

conventional financial point of view, they're not as focused on Bitcoin as they are. But for them, Bitcoin is just one of many different things which they're interested in. But nonetheless, you're, again, you're quite right with Gresham's law and another Bitcoiner I know. He often says the parallel of, he's an Argentinian and he brings up this parallel between

Argentinian peso and the dollar and there you also had essentially, peso being devalued and continually devalued and people trying as much as they could to move to the US dollar and you could have something similar with Bitcoin as well. Again, over time, people seeing, okay, if I want to store value, it's better for me to hold Bitcoin and fiat currencies and people just taking the

Cody Ellingham (37:45.454)
choice which is optimal for them. Yeah, I think that's why maybe there's again this ecosystem approach is important where you understand the importance of decentralizing nodes, having your own keys, these kinds of things. But yeah, I mean, speaking of Argentina just had some Argentinian friends visit and you know, they wanted some US dollar, hard, you know, hard money.

or not hard money, but cash as hard as it gets at least in that part of the world. And so they, you know, was selling Bitcoin for US dollars. And again, that still connects back into the fiat system. I mean, I appreciate this is a bit speculative, this side of the conversation, but I'm more and more interested in soliciting people's thoughts on this, because it seems as if... do you see it developing? What's your sort of...

for me? mean, I'm... Yeah. mean, I'm sort of still collecting perspectives. I don't have any real crystal ball as such, but really interested in how these kind of, these worlds collide because they really are different things. And again, within the Bitcoin space, you know, everything works so smoothly and so easy to work with. But it's when you start trying to use that in the real world and...

That's the challenge and I appreciate that as a criticism people have had and we could say that we are just early but at the same time, countries have been able to bootstrap currencies in much shorter periods of time and that is through decree and through charterlism. They define money and then that becomes money and I wonder, just running the scenarios, where do we get to with the outlawed Bitcoin, for example, the classic topic.

You you and I are able to transact maybe, and as resistance money, we can use Bitcoin, but most people are still potentially using Fiat. That, as I said, somewhere up the chain is backed by some kind of Bitcoin ETF type situation, and they go about their daily life, you know, none the wiser. And does that lead to this sort of majority and minority type setup where...

Cody Ellingham (40:01.11)
you know, the Bitcoin is self sovereign and they do what they want. And then everyone else is still within a kind of Neo fiat where, know, extensively there's Bitcoin up the chain that gives the system stability, but you're still KYC and using third parties and banks and stuff. So I don't, I mean, I don't know. I'm, I'm, have it certainly. I hope that it would be more, more free and everyone's running their own, their own thing and they've got their own keys, et cetera. But

I'm keen to sort of compare what the different outlooks might be and sort of compare and contrast and sort of see where things are at because I mean this doesn't exist in a vacuum and if you look at the work that they're doing on CBDCs, the stuff that the government's pushing for, you know, that's not stopping and certainly in my country, they're pushing forward with it. I mean that's sort of my high level take at the moment is it's important to kind of gather.

opinions and and maybe not be dogmatic about how a currency forms because again the engineering solution potentially is There and we can look at it. This is how technically it would bootstrap, but then there's a whole social cultural narrative and move to it similar to the way Bitcoin itself got started it required these different kinds of people Getting together for it to kind of emerge and get to where it is today But what is the next thing is it massive currency crisis that helps everyone get ready?

move into Bitcoin or is there some other black swan type event that, know, cause I mean the argument, you know, if you look at somewhere like Greece, 2015, maybe Bitcoin wasn't ready at that point to take on the Greek people and have them using Bitcoin natively. And so they ended up just floundering around and searching for us dollars, I guess. Whereas maybe the next time that happens, is Bitcoin in a better place to be ready for that, et cetera.

Well, I mean, my hope would be if something like that does come along, that as many people as possible have their own bitcoins, they are insulated from that as they can be. mean, the ideal situation, of course, is you just have like a smooth transfer over like more more people, families, organizations, states, convinced by Bitcoin, it just

Cody Ellingham (42:24.364)
that you have like a very smooth and positive transition from an old technology to a new technology. Like the more, I would say, negative scenarios, of course, that you do have some big catastrophic event. And of course, can, as you say, you have the Greek and more generally European financial crisis. then you have, of course, looking back in history series of

financial crashes in 1987, 1929 and so on. Yeah, obviously, they are hard to predict. And I think also it's like, you will still have that in the Bitcoin standard. In fact, you'll probably even have it more because I mean, you see in the Bitcoin and more generally in cryptocurrencies do have these big sort of swings between the euphoric phases and then the

the big crashes in 2022 with these whole series of bankruptcies of three hour capital and all these other companies which collapsed. of course, that is one of, I wouldn't say it's an advantage necessarily, but one of the characteristics of the fiat system as they print money to try and ameliorate these situations. What obviously often happens is they end up kicking the can down the road.

Well, you just don't have that with Bitcoin. You don't have an instance. It's decentralized. You don't have a centralizing organization who will organize a bailout. There is no central bank and there's no mechanism to print money to prop up the organizations which did fail. So you end up with a situation where a big crash is really a big crash and no one steps in. It just has to play out.

And in 2022, you have the domino effect. it's not like back in 2009, Lehman Brothers collapses. And then the government says, dear, and then says all the other ones. It's like the first domino collapses. And then every other domino which must collapse, in fact, does collapse because there's no one to catch them. Yeah. Well, one other way looking at this. So again, I'm soliciting opinions and thoughts on this. Because I think there is a dogmatic.

Cody Ellingham (44:48.782)
argument that Bitcoin just wins and we can wait a very long time and that will happen potentially as well. But I am very interested in that short to medium term and what the tactical maneuverings are and where the pressure points and pain points are for the fiat system and the state in particular. And as you say, there's a smooth possibility where it just is welcomed in and there's the resistance money route where things may be a little bit more...

chaotic and I'm reminded of in New Zealand, you know, there was the move from the New Zealand pound to the New Zealand dollar in 1967 along with decimalization, which I believe happened in the UK and other parts of the Commonwealth as well, where, you know, you went from like shillings and however many 12s and 24s, base 12 money, you moved from that to decimal money. And that was a very smooth process that literally just took one day and that was the decimal day and they moved over.

But that was because the state was driving it, right? And effectively that was a new currency because you had old notes and you had old coinage and everything and it was suddenly re-minted and swapped over. And there was sort of a period in between where you could transfer and those were compatible. But as it stands today, no one uses the New Zealand pound. That's not legal tender. So effectively that was a rug pull.

And so there's a possibility if the government embraces it, you know, there's that, there could be something like that. But then the other side is, yeah, it stays as a sort of background radiation, lingering resistance money used by a few and far between as self-sovereign money. And those people maybe gain a lot of wealth through doing that. But when was the last time people were really interested in freedom anyway? You know, so I don't know. Yeah.

How is it in Japan actually? how is the government's approach to that? And were they particularly affected by this whole Mt. Gox situation? Did that have an influence on how the government there sees it? I mean, I wouldn't say I'm really super qualified to comment on Japan, but certainly Mt. Gox had a very strong chilling effect on Bitcoin in Japan. I mean, it's got its own issues. mean, it is a...

Cody Ellingham (47:11.468)
the currencies lost so much value since it started. mean, it used to be one yen to one US dollar back in the day, know, a hundred years ago, but that has changed massively. so I think, I'm not sort of super, super qualified to comment on that, but I think the bigger piece around, again, that convertibility, the people's thoughts on medium of exchange, it still was rooted in this.

nation state currency and this fiat currency and you know does that get to a point where it sort of gets swapped out again at a higher layer and arguably I mean this is a bit more of bullish argument that we could adopt. Is Bitcoin already the reserve currency of the world and people just haven't realized it yet. At what point do people understand that there's a mathematical reality to the absolute scarcity that a few of us hold.

And everything else is a layer two on top of that. I mean, that's another argument. And so that sort of flips the perspective a little bit. It's sort of the same picture, but you're looking at it in a different way. that, I mean, arguably that's already hyper Bitcoinization has happened and we're just experiencing the transition now to a full Bitcoin rollout potentially. Yeah. Yeah. That's thing that's quite certainly an optimistic perspective.

Well, mean, it's true that I mean, you could measure, you know, government reserves and basically everything can be measured in Bitcoin just as Bitcoin can be measured in fiat currencies. So and Bitcoin has been growing in strengths against all of those fiat currencies. So I don't know what it's kind of like what's sharper than a diamond, you know, and you test it by sharpening other things and which one scratches it. And I mean, nothing can scratch Bitcoin. Nothing can make a dent. So.

Arguably that's one way of framing it and I think that framing is really important because it is an ecosystem, right? As you say and coming back to your engineering background, it's kind of like, you know, if you think about an internal combustion engine There's no point where you can kind of point out the vehicles sort of energy cycle You know, you've got the moving parts of the engine. You've got the radiator the drive drive chain That's sort of the whole thing acts in unison and as the car moves as the pistons move around They then create the momentum that can pull more

Cody Ellingham (49:26.252)
you know, gas into the cylinders and there's this sort of this engine that keeps going. It's not just like a one shot thing. It's sort of four dimensional. I think maybe there's some analogies there with sort of the way Bitcoin is just sort of like suddenly got momentum and it's it's taken flight. Yeah, that I mean, I would agree with I think the momentum as you can express it as a kind of network effect, mean, the more

more people use Bitcoin just because of the, not necessarily because of the financial value, but just because of the number of participants in the network, the network becomes more useful, thus attracting more people and so on as a snowball effect. I think we're just in the middle of, or maybe not in the middle per se, but we're certainly not at the start. We're in some stage of this process. And yeah, I mean, because again, because

Bitcoin is so much superior to previous form of money. I this will just continue and continue unless there's some very aggressive, unless either A, there's some big catastrophe, like there's some big technical catastrophe to Bitcoin, whatever that might be, or B, some very aggressive and also worldwide coordinated action taken by the state. But otherwise, I think it just rolls and rolls and rolls, just as I say, like

cars or a smartphone. More people use cars, then the streets are improved to help their use and then cars become even more useful for more people, then mass production becomes feasible, then because the mass production becomes cars become cheaper, then even more people want to use them, etc, etc, then more petrol stations are built because there's more demand for petrol, then it's even more interesting and so on and so forth. Same for Bitcoin. Yeah.

Absolutely, and I wonder whether that's not where the speculative aspect is very necessary because cypherpunks and libertarians alone, it's a very powerful group and the libertarians have been operating for a long time. Classic gold bug idea, but maybe possibly it is the speculators and arguably even the statists who are coming in and holding Bitcoin and want to see it succeed.

Cody Ellingham (51:48.632)
people peppered throughout government personally hold Bitcoin, et cetera, they benefit too as individuals. And that's maybe the magic source here, coming back to what I started with, something that struck me about your book is you mentioned that kind of push and pull of all of these parties. So even though it could be pushed away by the government when people within government are getting rich from Bitcoin too and they're storing their value there, maybe they won't come after it and they'll do something else instead.

Yeah, I mean, and I would see that's the advantage of institutional adoption, course. mean, that's not all discussion, but of course, the state is very closely connected to, of course, the large financial institutions who are now actively pushing Bitcoin with their new products. And also, they are very connected to universities and some universities also have as part of their endowments Bitcoin.

holdings. So you have large influential entities who are close to the government who, yeah, would be sure to raise their hands if the government were more aggressive. they're working for us. That's great. Yeah. And what you said also, I mean, that's about people in government, I would say that it's quite similar to what Michael or the Marco said on another

podcast we did recently, of course, you just have a generation change. When younger people, new people come in who are more sort of positive towards Bitcoin, actually part of the system. And of course, that will have an influence on the system itself. this is just a natural sort of progression, the generations change, new things come with new generations. Yeah, just as an inspiration. Yeah, absolutely.

Well, look, Anthony, I am keen just then briefly to talk about what's next for you and what you're currently working on as well, if there's anything you've got on the go at the moment. Sure. regarding the book, so the audio book came out earlier this year. So I spent some time earlier this year preparing the audio book, which came out in the market in summer. And at the moment, we've been working quite hard on the translations. So all

Cody Ellingham (54:12.362)
four authors have connections to Germany. Marco and Marco are both born and bred Germans. I'm a naturalized German, although originally from the UK. Zoran also lived part of his life in Germany. So we have a German translation, the German version coming out soon. And then also in one or two other languages in particular, we are

hoping that we will manage to get a Chinese Mandarin out before too long. And then we have another one or two languages in the pipeline. Excellent. That sounds good. So that's going to keep you occupied for a little while then working on that. Yeah. It's been a little translating a book from even from English to German, which are quite similar languages. It's not quite as straightforward as I thought originally. I I'm an engineer, so I can speak fluent German, but

I'm not a translator or working in this. It's coming along well. Yeah. Excellent. Awesome. And if people want to find you Anthony, where can they go? Well, our website for the book is decryptingmoney.com and there are those contact details there or on Twitter. My Twitter name is Jefferies, my surname is 000. Excellent. All right, mate. Well, I appreciate your time and sharing what you've been doing and

Talking about the book a little bit certainly interesting to me and again, and thank you for the copy and yeah much appreciated Yeah, well, thanks for inviting me on your show. It's been an interesting chat Yeah, thanks very much.

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