#244: The Quiet Master of Cryptocurrency -- Nick Szabo

If you see a fly in amber, and it's got a millimeter of amber around it, well, that could have been done yesterday or a year ago. But, if you see the fly is trapped in a huge block of amber, you know it's been there for a long time—it's been accumulating. So, a blockchain is a series of blocks. Each block is a series of computations done by computers all over the world using serious cryptography in a way that's very hard to undo.

To me, the people who get outraged are sort of the most anachronistic, least intelligent members of society, and I'm happy to leave them behind. The more easily outraged you are, the less I want to have to do with you. Be gone. If you think words can hurt you, you're going to live in a world of misery and pain your entire life.

Just like the Internet took out Hollywood with Netflix and Spotify, and it took out newspapers with publishing and Twitter and Facebook... the Internet is going to fundamentally change and possibly take out the finance industry as we know it, and the new finance industry is going to settle wherever the home of innovation is for smart contracts and cryptocurrency.

One definition I really liked of money is, 'Money is the bubble that never pops.' So, if the tulip bubble had never popped, we'd probably be dealing in tulips today. Now, it popped for fairly good reasons, which is tulips make for lousy money—they're hard to store, they're hard to transport, they're hard to subdivide. But cryptocurrencies, actually, are the exact opposite end of that scale

Socially, we are taught [that] you have to have a point of view, you have to have an answer, you have to pick a side, pick your tribe, fit in, defend it, and be consistent. But reality is really complicated, so if you're really smart, and you're operating on the edge of any field or trying to figure out anything new, you probably need to have quantum thought. You probably have to hold both states in your head and constantly weigh probabilities.

Any government that really embraces Bitcoin or any of these cryptocurrencies—it doesn't have to be Bitcoin; they could even start up a new one if they wanted to—is just going to benefit so much from really owning the money that's native to the Internet. I called Bitcoin the Internet of money because it's really native to how code works.

Bitcoin enables a form of social scalability where it allow humans who don't know each other, who don't trust each other, who may never see each other again, and who don't even reveal their identities or locations to each other to still transact securely—not just with money but also with contracts.

I try to keep a very low level of mental surface activity for anything other than whatever I'm directly dealing with in the moment. One of the ways I'm trying to do that is by stripping away layers of identity. So, I don't want to overly identify as Indian or American or libertarian or Democrat or any of those kinds of things because that keeps me from actually engaging in thinking as I need to—it's all preconceived beliefs.

I think the worst Twitter is Trump Twitter where everyone's getting outraged over politics all the time, but the second worst Twitter right now is blockchain Twitter.

What separates humans from other animals is that we are social across genetic boundaries ... You could have 150 Neanderthals on a battlefield because they're all genetically related, but you can have 5,000 Homo Sapiens on the battlefield because they believe in the abstract idea of Christianity, and they can communicate that story to each other.

Every time I go to New York, I'm actually highly entertained because I see all these huge towers, I see all these peoples in suit, and I know that 90% of them will be obsolete within 20 years.

If you attack someone's identity, you shut down all conversation with them. That's why political conversations don't work. So conversely, if you want to be rational and open-minded, you should not have an identity, and the less of an identity you adopt, the better.

Bitcoin is almost to computers what quantum mechanics is to physics—it throws a lot of people in the field off.

One of the problems with Bitcoin is that because a lot of people hold a little bit of Bitcoin, everyone has a financial incentive, and they're all talking their own book, and they get really emotional about it. Nick [Szabo] had this great tweet that I like: 'The best way to destroy your investment in Bitcoin is to gather an Internet mob to go and redesign Bitcoin.'

Over time, we should see bubbles form faster, pop more quickly, and I think they'll fall into a power law distribution. There'll be ones that will be really large. There'll be ones that will be really small. But this idea that the future is going to be very smooth and linear and predictable is a human illusion.

The new bankers are the miners. The new Fed is the cryptographers ... The new owners of the infrastructure are the holders of the coin, which is everybody or could be everybody.

Bitcoin is electronic gold. There is a generation of kids who will grow up that as long as they've been alive—like my son when he's older as long—as he's been alive, there will have been gold and there will have been Bitcoin.