When El Salvador’s president, Nayib Bukele, shared with the world that his “Bitcoin Law” had been approved by the nation’s Congress in a supermajority vote, it was a watershed moment for the original cryptocurrency, and for cryptos generally.
The adoption of a crypto coin as a parallel currency was billed as a means of mitigating the Central American nation’s economic exposure to monetary policy made by another country’s central bank — the U.S. Federal Reserve — and of giving Salvadorans more direct control over their own financial affairs.
Now, not quite a month later, issues of financial self-determination remain in the spotlight for Samson Mow, chief strategy officer of Bitcoin technology company Blockstream.
“The key here is to bring sound money to the people,” Mow told Forkast.News in a video interview. “Now, when they’re earning a dollar in Bitcoin, they’re getting the same hard currency and finite amount of currency that Michael Saylor would get when he invests billions into Bitcoin.”
But in order for Bitcoin to succeed as a superior currency to existing fiat money, the network must be able to support micro-transactions. That’s been a challenge, particularly in recent months — at their peak in April, average Bitcoin transaction fees topped US$60.
“When you’re spending, you don’t want to pay a dollar for buying your groceries and then pay another dollar to pay for your [transaction fee],” Mow said.
Layer 2 projects such as the Lightning Network and the Liquid Network are one means by which transaction fees can be lowered, as they decongest Bitcoin’s main chain by moving transitions off it.
“The Lightning Network is kind of like a network of bar tabs,” Mow said. “When you go to a bar and you want to order a drink, you’re not going to pay for every single drink. You’ll give them your card and then they’ll charge you at the end of the day.”
Although authorities in most countries are still grappling with the regulation of cryptocurrencies, Mow suggests that the increased adoption of Bitcoin will lead to what he calls “hyperbitcoinization” — a situation in which Bitcoin evolves is a ubiquitous currency.
“At some point, you’ll reach a tipping point, or inflection point, where you just cannot convert dollars into Bitcoin,” Mow said. “And at that point, your choice is to either mine Bitcoin or earn Bitcoin.”
Watch Mow’s full interview with Forkast.News Editor-in-Chief Angie Lau to learn more about Bitcoin’s road to ubiquity, the lingering questions about the environmental impact of mining it, and how Layer 2 projects are paving the way for a Bitcoin-centric economy.
Highlights
- Bitcoin’s answer to depreciating currencies: “The key here is to bring sound money to the people. The problem with fiat currencies is that dollars can be printed out of thin air, and you have people in developing countries that are earning U.S. dollars. A lot of countries are using the dollar as their national currency, either officially or unofficially. But when they’re earning dollars, they’re scraping together a living and earning hundreds of dollars a month, maybe, or less. Sometimes central banks are printing billions and trillions of dollars out of thin air and devaluing it. So it’s almost like they’re stealing money from the people that need it the most.”
- Crypto is not immune to “money printing”: “Bitcoin is finite, [but] cryptocurrencies are infinite because you can make new cryptocurrencies all the time. And the incentive to print fiat currencies also applies to cryptocurrencies, too. You have new people making altcoin every day, and they’re just inflating the aggregate amount of cryptocurrencies out there and inflating the aggregate to crypto market cap. But I think all of that is irrelevant. The thing that matters is Bitcoin and its finite number.”
- Defending Bitcoin’s energy consumption: “One of the common things that is thrown out there is Bitcoin uses more power than a small country. Well, Christmas lights use more power than a small country, too. It’s just mind-blowing to aggregate all Bitcoin usage and compare it to a country, because any number of things that we use — like washing machines, dishwashers, clothes dryers — they all amount to the energy consumption of a small country when you aggregate it.”
- The road to hyperbitcoinization: “We’re moving towards hyperbitcoinization. Everyone will just use Bitcoin and you don’t need to convert from Bitcoin back to dollars. It just would not make any sense anymore … It’s impossible to make a fiat currency or a national currency that is as good as Bitcoin. If that was possible, you could make an altcoin that was as good as Bitcoin, but you can’t really do that, because somebody is in charge. The key here with Bitcoin is that nobody is in charge.”
Transcript
Angie Lau: Bitcoin is now legal tender in El Salvador. Who’s next? Is Bitcoin ready to be a nation’s payment system? And what about its carbon footprint?
Welcome to Word on the Block, the series that takes a deeper dive into blockchain and all the emerging technologies that shape our world at the intersection of business, politics and economy. It’s what we cover right here on Forkast.News. I’m Forkast Editor-in-Chief Angie Lau.
El Salvador has become the first country to adopt Bitcoin as a currency, and this has triggered a wave of Latin American politicians donning laser eyes on their Twitter profiles.
Laser eyes — if you don’t know this already, has been a social media trend for Bitcoin supporters — a cheering effort to push Bitcoin to US$100,000.
From way back when, and accusations of it being drug money, to now a national currency — boy, have times changed…?
But the technical questions still remain. Can Bitcoin be used for micro-transactions? And what are we going to do about its energy consumption?
Well, we’ve got a treat for you, Bitcoin supporters — and for those of you who are just joining the industry right now and learning more about it. We’ve got the chief strategy officer of Bitcoin technology company Blockstream, the CEO of game developer Pixelmatic, and a true veteran — someone they call an OG — original gangster — and loyal champion of Bitcoin, Samson Mow. Samson, welcome to the show.
Samson Mow: Thanks, Angie. It’s great to be here.
Lau: An OG — an oldie but goodie — this is to designate those who saw Bitcoin’s potential even in its infancy. What made you see Bitcoin as something that could be powerful in the way that we see it now?
Mow: My background is really game development and developing online games, so I’ve been building games with economies and currencies, and I have to deal with things like inflation, or deflation in some cases. Having to manage these economies was very interesting, and people treat the digital currencies in-game as if they were really money. When I first encountered Bitcoin, it kind of turned on a light bulb in my mind that this is like a game currency, except it’s not managed by a game company, it’s actually decentralized. There’s nobody in charge and the network is permissionless. Anybody can become a Bitcoin miner and anybody can use Bitcoin.
Lau: In the early days, when Bitcoin went to market when it was first traded, it was really in the pennies. Did you ever imagine a day when the height breached — was it US$69,000? Samson, remind me.
Mow: 64-ish?
Lau: Now it’s under US$40,000. Whenever our audience watches it, I’m sure it’s going to be a different number by then. But did you ever imagine that, from pennies, we would see such an exponential increase in the value of Bitcoin that we see today?
Mow: Yeah, definitely. I believe that Bitcoin is going to be just simply money in the future, and to get there is going to swallow up all fiat currencies — bonds, gold, everything like that. So it’s just going to become money and it’ll just be ubiquitous. We’re starting to see that trend now, with nation-states adopting Bitcoin, as you said. It’s one of the first steps for the next series of Bitcoin’s growth.
We had Michael Saylor and MicroStrategy bring on the corporate Bitcoin buying, and now we’re seeing nation-states buying.
Lau: And let’s dive right into it. When Salvadoran President Nayib Bukele sent that historic tweet confirming that his Bitcoin law in El Salvador was approved by Congress with a supermajority vote, where were you? What was your reaction after watching Bitcoin from its infancy to becoming a legal currency in a country?
Mow: At that exact moment, I was in Twitter Spaces, hosted by Nic Carter and a few others, and I was listening to basically the live blow-by-blow of the voting for the bill. So it was pretty cool to watch that happen and to have President Bukele in there and explaining things and talking to everyone about it. I’d say it was kind of like the ‘State of the Bitcoin Union’ address. Everyone was waiting with bated breath on the outcome of this piece of legislation. And you’re watching it in real-time and you’re having an intelligent discussion with a head of state about Bitcoin. So it’s just amazing.
Lau: The dynamic is different, though. This is El Salvador, where 70% of the population does not have a bank account. Its economy is very challenged, as you know. Why adopt Bitcoin here to even circumvent their own economic issues?
Mow: The key here is to bring sound money to the people. The problem with fiat currencies is that dollars can be printed out of thin air, and you have people in developing countries that are earning U.S. dollars. A lot of countries are using the dollar as their national currency, either officially or unofficially. But when they’re earning dollars, they’re scraping together a living and earning hundreds of dollars a month, maybe, or less. Sometimes central banks are printing billions and trillions of dollars out of thin air and devaluing it. So it’s almost like they’re stealing money from the people that need it the most. And Bitcoin fixes that, because now when they’re earning a dollar in Bitcoin, they’re getting the same hard currency and finite amount of currency that Michael Saylor would get when he invests billions into Bitcoin. So you’re kind of on equal footing with everyone in the world. That’s the key thing — bringing about this more fair and equitable currency to the masses.
Lau: It’s a difference of monetary policy. You’ve got the traditional fiat … exactly as you’ve expressed it, with central banks around the world, with monetary stimulus, and really devaluing the dollar. That is what we’re seeing in the traditional fiat space. But the monetary policy of cryptocurrency is that it’s a finite number of 21 million Bitcoins ever to be mined into existence. That is very specific. It is a finite number. And so the pie does not get slivered down into micro-pieces. It remains intact.
Mow: The key thing here is that Bitcoin is finite, [but] cryptocurrencies are infinite because you can make new cryptocurrencies all the time. And the incentive to print fiat currencies also applies to cryptocurrencies, too. You have new people making altcoin every day, and they’re just inflating the aggregate amount of cryptocurrencies out there and inflating the aggregate to crypto market cap.
But I think all of that is irrelevant. The thing that matters is Bitcoin and its finite number. So I think it’s really clear to make that distinction because for the “normies” — the non-crypto savvy people — they can look at that system and read it incorrectly. So I believe Ruffer [Investment Management] said that they’re sitting out. They bought some Bitcoin, they bought 500 million-something Bitcoin. They ended up selling most of it or all of it. And now they’re just waiting on the sidelines because they say there are so many cryptocurrencies, we’re not sure. But it is a serious issue where — [for] people that don’t understand the scarcity of Bitcoin and the abundance of altcoins — it can be a very scary and confusing thing for them, because it’s a kind of different paradigm than what people are used to.
Lau: You know, I totally get that — I think that a lot of people have a really dim view of altcoin for exactly that reason. But back to the point that I was trying to make, is that these are two very different kinds of systems, Bitcoin being finite, traditional fiat being kind of endless printing of money. But aren’t those two still tied together? You can’t have value in one without unleashing the actual value of that into fiat.
Mow: You can always exchange fiat currencies for Bitcoin up to a point. I guess this is really about money and our use of money as a species or civilization. We’ve always been looking for sound money, and I think we finally found it with Bitcoin. But previously we’ve used seashells as money. We’ve used rai stones as money. We’ve used paper. We use gold as money. But all of that fails.
You can convert dollars to Bitcoin now. But in 100 years, will you still be able to do that? I don’t know. If you gave me some seashells today and said you want to convert them to dollars, I don’t think I would do that trade with you. At some point you’ll reach a tipping point, or inflection point, where you just cannot convert dollars into Bitcoin. And at that point, your choice is to either mine Bitcoin or earn Bitcoin. And that is kind of when you reach hyperbitcoinization, where it’s just Bitcoin for everything. It’s the store of value, medium of exchange and unit of account.
Lau: And that also means that it’s got to be usable. That debate has already been well debated, about the ability of Bitcoin to actually act as a daily transaction vehicle for everyday life.
Mow: Well, I think Bitcoin can be that daily vehicle for your living. One of the things I’ve been talking about for a number of years now is a concept of a Bitcoin-circular economy. That’s effectively being able to earn Bitcoin and spend Bitcoin. There’s a lot of friction involved with on-chain transactions, because if you’re paid in dollars and you need to go and buy Bitcoin, then you’re paying fees for the on-chain transaction, sending it to an exchange. You’re paying fees to the exchange to convert it to Bitcoin. There’s a number of bottlenecks that really slow it down. And of course, when you’re spending, you don’t want to pay a dollar for buying your groceries and then pay another dollar to pay for your gas or whatever.
The key here is Layer 2 scaling tech like the Lightning Network, and like the Liquid Network. So, these are layers that sit on top of the Bitcoin main chain, and they allow for much cheaper and much faster transactions. Bitcoin’s often attacked in the media for only having three to seven transactions a second. But Bitcoin is a settlement network.
When no one was using Bitcoin, like back in the days when Laszlo [Hanyecz] was buying pizza with Bitcoin, that’s great. Or some of the altcoins that try to market themselves as for payments, that’s great if no one is using it.
But when you get to scale, and especially if you wanted to get to planetary scale, you cannot do on-chain transactions. It’s just a computer science fact. Either it’s going to be a decentralized, permissionless system, or it will be centralized into a number of servers. And then, yes, they could probably process hundreds of thousands of transactions, like Visa, but then the network is no longer decentralized. So are these trade-offs. But with technology like the Lightning Network, you can effectively pay a fraction of a cent to transact something. A liquid transaction is somewhere between 10 to 15 cents. And these are because they’re not polluting the main Bitcoin chain and they have different properties. But I think what we’re going to see is the emergence of the circular economy in El Salvador, because they’ll be rolling out Lightning wallets. I think [Zap CEO] Jack Mallers is building a wallet for the government, and he’s a Lightning application developer. So we’re going to see this actually come into play, and see a nation state have Bitcoin on the treasury, and the people living there using Bitcoin in everyday life.
Lau: And just to help people who are just joining this conversation and just new to understanding what even Layer 1 or Layer 2 means — you talk about Lightning network. Blockstream, of which you’re a part, is a Lightning Network developer. It is a Layer 2 that sits on top of blockchain that allows off-chain transactions. In other words, it sits on top, makes the network work faster and cheaper, and actually brings down those transaction fees. They’ve been enormously high. That has been the criticism of Bitcoin.
These transaction fees … now when the prices were really high, it was up to US$20, US$30, US$40 per transaction. That has fundamentally gone down. Bitcoin is not the only thing that is experiencing those high network usage or high gas fees. We’re also seeing it in Ethereum. We’re also seeing how other Layer 2s are helping Ethereum, which is a Layer 1 — and Bitcoin, which is also a Layer one — kind of be more efficient, kind of like the gas-efficiency scenario.
But to your point, people are starting to use it in El Salvador. I know that we just did a story at Forkast.News how bars across Asia and restaurants etc are starting to accept Bitcoin using Lightning for transactions. Do you see the ubiquitousness of cryptocurrencies like Bitcoin being more effective as we see technology innovate better, especially Layer 2? What other things can we see that actually will make Bitcoin faster and more efficient?
Mow: Well, Bitcoin itself — the base layer is actually quite fast and quite efficient. If you’ve ever done a bank wire and had to input the routing numbers and whatnot, you know how ineffective it is, or if a wire transfer is lost, you have to ask the bank to trace that, and it’ll take them a couple of days.
Already in and of itself, Bitcoin is incredibly efficient. You can move a billion dollars worth of Bitcoin paying US$4 in transaction fees. That’s the thing. With a settlement network, the network doesn’t care if you’re moving a billion dollars or a dollar — you’re going to pay the same amount. So it’s an incredibly, incredibly efficient movement of capital. It’s just not great for micropayments, but we have other technology to do micropayments, like Lightning and Liquid.
So, for the Lightning Network, it doesn’t have a blockchain. You’re effectively opening up channels by locking up your Bitcoin on the chain and then transacting in this kind of network peer to peer, and routing through that network. So the analogy I like to use — you were talking about bars — the Lightning Network is kind of like a network of bar tabs. So, when you go to a bar and you want to order a drink, you’re not going to pay for every single drink. You’ll give them your card and then they’ll charge you at the end of the night. But you can think of Lightning as a network of bar tabs for everybody using it.
Now, Liquid is a sidechain of Bitcoin. So what that means is it’s a separate blockchain, but without a native currency. So all the other projects that you’re talking about, like Ethereum and whatnot, those are all a separate blockchain, but they have their own altcoin token, and they have their own incentives to print their own money. But for Liquid, there is no native currency. The only way you can get Bitcoin in Liquid is to lock up Bitcoin on the main chain and unlock it in Liquid. And once you’ve done that, you can use it in Liquid with one-minute block times. And it’s very fast and very efficient.
Now, the real cool thing you’re talking about — the evolution of how this technology goes — is that with Liquid, you can actually spin up a Lightning Network on top of any Liquid asset. So if you think of Bitcoin as having one asset, which is Bitcoin, Liquid can have multiple assets. You have Liquid Bitcoin, you can have stablecoins like Liquid USDT or Liquid Canadian dollars or Japanese yen. Each of those assets can have its own Lightning Network on top of it. So you can have USDT having its own Lightning Network, and then effectively you’re spending a stablecoin instantaneously and with almost no fees attached. And I think that’s a real game-changer. And I think that is something that’s going to really spark the adoption of this technology — basically eliminating all the friction that you have for spending, and you can actually have higher throughput than centralized systems with the Lightning Network. So I think Visa, Alipay and those kinds of things, they talk about it a few hundred thousand transactions a second. But with the Lightning Network, you can actually get up to millions of transactions a second.
Lau: That’s incredible. Back to El Salvador. You have an entire country, 70% is not banked or is unbanked. Then a day after the news of El Salvador adopting Bitcoin in a congressional hearing, we’ve heard from U.S. Senator Elizabeth Warren, who said that cryptocurrency has created opportunities to scam investors… to assist criminals… worsen the climate crisis. She said that the threats posed by crypto show that Congress and federal regulators can’t continue to hide out, hoping that crypto will go away, and it won’t. And it’s time to confront these issues head-on. We’re increasingly hearing this type of criticism, with very basic and consistent talking points, from day one has not gone away. How would you like to refute that? How would you like to respond?
Mow: Every criticism of Bitcoin that we see in the mainstream media is patently false and is just a — I don’t know — it’s either a willful ignorance or a lack of research. Like things like “criminals use Bitcoin”, that’s like 2015 FUD [fear, uncertainty and doubt]. And the FUD of the year in 2021 is “Bitcoin uses too much energy” or “Bitcoin is dirty energy.” But all of these things are false. And if anyone did any research whatsoever, they would know it is false. The vast majority of Bitcoin mining is driven by renewables or zero-emission energy sources.
Blockstream is a major miner. We’re one of the largest in North America, with over 300 megawatts of power. And I think we’re 80% emission-free. We’re a mix of hydro, wind, solar and nuclear. It’s incredibly clean. The reason why Bitcoin mining is so clean is because typically renewables — especially nuclear and hydro — are the cheapest. So Bitcoin miners are driven to find the cheapest sources of power available, and usually it’s renewables. So it kind of is a problem that solves itself.
The other thing is the “too much energy” thing. And I just find that really weird. And I’m not sure if people are buying that argument. But it’s strange to me that that is even a thing, because human civilization is based on energy consumption. From the time we managed to harness fire we’ve been using energy. We use energy for a lot of different things. We use it for clothes dryers. We use it to take a ride in the countryside in our cars. We use it to launch rockets that bring satellites into orbit. We use energy for a number of things.
And it’s odd that Bitcoin is being attacked for energy usage, because we are minuscule when you compare it to what energy we’re using for everything in the world — a fraction of a percent of world energy consumption. One of the common things that is thrown out there is Bitcoin uses more power than a small country. Well, Christmas lights use more power than a small country, too. It’s just mind-blowing to aggregate all Bitcoin usage and compare it to a country, because any number of things that we use — like washing machines, dishwashers, clothes dryers — they all amount to the energy consumption of a small country when you aggregate it.
Lau: If you ever tried to do a banking transaction in Asia, in some countries, you’ll realize there’s a lot of energy expended unnecessarily to do just one transaction. So there’s that, if you want to do a direct comparison.
But if it’s a red herring — and I can’t disagree with any of the things that you shared — what do you think the real issue is? Why the fear from traditional governments, from government leaders, from regulators?
Mow: I have to say it’s just to control or furthering their own agendas, for whatever reason. You just have to follow the money people that are speaking out against Bitcoin, who is funding them, right? Do they have their own agendas? Like, for example, Elon Musk spoke out about Bitcoin energy usage, but he is living off of subsidies and people buying carbon credits from him, so is he just trying to get Bitcoin miners to buy his carbon credits? I don’t know. But the whole carbon credit market is due for a shakeup, and other car manufacturers may no longer buy his carbon credits. So perhaps he’s looking for someone else, a new customer, but he’s just willfully ignorant. He’s not being honest with people that are following him when he FUDs Bitcoin.
It looks bad, too, because he just bought — you know, billions of dollars worth of Bitcoin — US$1.5 billion worth of Bitcoin. Did he do no research before he did that, or is he lying now? But there’s no good answer there. They’re both bad answers. So I don’t know. It’s just really weird for me. If he doesn’t like Bitcoin’s energy usage, just refusing to take Bitcoin for Tesla payments isn’t enough. He should sell all the Bitcoin on his balance sheet at a loss and take the L. You can’t have both. You can’t say we’re not happy with Bitcoin until it reaches 50% renewables — which is way past that — we’re, like, 80% renewables. And then you can’t keep it all on your balance sheet and look good to your investors that way. It’s just he’s trying to have his cake and eat it, too.
Lau: There’s no doubt that he triggered a lot of the hype and the enthusiasm that we saw in the early rise of Bitcoin at the beginning of this year, and that very same person deflated a lot of that hype by making those comments. The volatility of the market of Bitcoin is one thing, but there’s a certain hype factor that also leaves a poor taste in a lot of people’s mouths.
Mow: Well, I think Elon wields a lot of power. He’s one of the richest men on the planet, and he’s got two companies that are doing very important things for human civilization. And I agree with his goals. I just think he’s incredibly misguided or ignorant in regards to Bitcoin. I would say he does wield a lot of influence, and he’s able to move those markets. So I think he should be careful with the things he says, and he should have some researchers provide him with research before he goes and runs his mouth.
Lau: Tell me what you really think, Samson! But let’s move on from Elon Musk and back to what we’re seeing across the globe here. So, El Salvador said that they’re going to use Bitcoin. We see this in a number of states. The Iranian president also spoke at a government meeting, stating for legalizing the activity of cryptocurrencies, protecting people’s capital in this area. We’re seeing China’s efforts with CBDC and the like. But this is also, when we talk about cryptocurrencies, because of its decentralized nature. That also removes a tool of foreign policy enforcement from governments like the United States to enforce perceived good behavior. One person’s enemy is another person’s friend, so that’s politics. But removing fiat, removing the ability to enact sanctions and things like that, is that also something that one should consider here?
Mow: In what way are you saying it’s a bad thing because we’re removing power from governments?
Lau: It’s just a function of one thing that cryptocurrencies do remove. That’s the nature of decentralized cryptocurrency. Whether or not it’s a good thing or a bad thing, it is a thing. My question to you is, for some people, this is a serious problem, especially if this is one of the tools in which you hope to enforce good behavior. That might not be at the retail level, that might not be at your or my level. But certainly, it is entirely a possibility if there is more adoption of cryptocurrency.
Mow: Well, the crux of the issue here is that Bitcoin returns power to the people. It’s permissionless money. Anybody can get Bitcoin, anybody can be a Bitcoin miner, and anybody can transact Bitcoin. And it does take power away from the state, and that’s why people are saying Bitcoin is a separation of money and state. The importance is on par with the separation of church and state. And I think this is a good thing in the end.
Let’s take the sanctions thing, so why do you need the government to enforce sanctions if everybody is on the same page and you say this country is very bad. Then technically the people should enforce that sanction if it is a democracy. Because they themselves can vote with their money, they can choose not to buy goods, they’re not to do whatever. You don’t need a central authority to say, “We’re going to do this” or, “We’re not going to do this.” Ultimately, at the end of the day, not everyone’s going to agree with that. If you look at the state of American politics, you can see it’s very divided. What Bitcoin does is return things to this natural free market. It’s free-market money. If everyone in the U.S. thinks, “We should effectively sanction this country,” then all the businesses there would just do it. You don’t need enforcement. Enforcement is kind of a bad proxy for what people really want — in my view.
Lau: You’ve just exposed something that’s really real, which is the removal of power of currency as a power base for a centralized entity and redistributed to people in a decentralized way. And you’re absolutely right. We see sanctions happen every day at a retail level when sponsors remove sponsorship from a show because of some controversial event and the like. We can lift all of the examples in this past year for that. I think that is really a great point. When power is returned to the people with Bitcoin and cryptocurrencies, something is coming, an inflection point is coming. I’m not sure we’re there yet. A lot of people feel that we are heading there very soon, with the inflation rates that continue to rise and also the stimulus that has been pouring in to devalue dollars. What do you think that event is going to feel like? Is it going to be an economic event? What do you think it’s going to be, Samson?
Mow: It’s difficult to say we’re moving into uncharted territory. I would say in the past, when we were using precious metals as money — that was more like a natural state of things. There’s a proof of work involved with mining gold or mining silver or whatever. You actually need to get the thing.
But once you move into the stage of infinite money printing — “money printer go brrrr” — you just kind of have dissociated from reality. Like what does a billion dollars mean these days? What does a trillion dollars mean? There’s no meaning to any of this any more, and Bitcoin fixed that. Bitcoin is really The Great Reset. We’re going back to sound money, except now, you don’t need to get it out of the ground. You don’t need to store it in a bank vault. And actually, if you look at gold, it’s actually kind of inferior to Bitcoin in a number of ways because it’s difficult to store your own gold and it’s difficult to move gold around. But with the advent of the internet and Bitcoin money, it’s just now information. And that’s a big game-changer that we’ve never had before in human history. So I don’t really know the answer, but I do know that big changes are coming, and I think it’s going to be net-good for humanity.
Lau: And at the end of the day, that’s really what it’s all about. Not only are we seeing blockchain really change systems. We’re also seeing the rise of cryptocurrencies with Bitcoin — obviously in 2008, as we saw its rise amidst the Global Financial Crisis. Do you see that potentially this could be an answer against a future economic event and those who have placed money into Bitcoin in the same way that we’re seeing corporate treasuries do right now.
Mow: Yeah, definitely. We’re moving towards hyperbitcoinization. Everyone will just use Bitcoin, and you don’t need to convert from Bitcoin back to dollars. It just would not make any sense any more. It’s anyone’s guess how long that will take, but eventually fiat currencies will just be gone. You can’t compete with sound money.
It’s impossible to make a fiat currency or a national currency that is as good as Bitcoin. If that was possible, you could make an altcoin that was as good as Bitcoin, but you can’t really do that because somebody is in charge. The key here with Bitcoin is that nobody is in charge. The rules are set. It’s math and code. And there is this concept of consensus. The whole network is based on consensus. So either you agree or you fork off and you make your own fork of Bitcoin, and then it trends towards zero, and Bitcoin is still Bitcoin.
I do think there’s a sea-change. And if we do have hyperinflation in the U.S., for example, then Bitcoin is definitely a hedge to that.
Lau: Samson, it was so excellent to talk with you. It’s very clear you are a Bitcoin loyalist, but it was great to understand all of the global dynamics that have really driven Bitcoin forward into mainstream.
You are OG, and now everybody’s there with you. And who knew that this day would come and certainly more to follow. Samson, it was great having you on the show.
Mow: Thanks, Angie.
Lau: That was Samson Mow, and now he’s Blockstream CSO and Pixelmatics CEO. And thank you, everyone, for joining us, as well, on the latest episode of Word on the Block. I’m Angie Lau, Editor-in-Chief of Forkast.News. Until the next time.