March 10, 2022

Bitcoin and the Cryptocurrency Revolution with Mick Morucci

Bitcoin and the Cryptocurrency Revolution with Mick Morucci

If you’re alive in 2022 you’ve probably also heard of Bitcoin and cryptocurrency or the blockchain. Whether you’re an active trader, just dabble, or think you’d never touch the stuff, cryptocurrency raises a fascinating challenge to the question of...


If you’re alive in 2022 you’ve probably also heard of Bitcoin and cryptocurrency or the blockchain. Whether you’re an active trader, just dabble, or think you’d never touch the stuff, cryptocurrency raises a fascinating challenge to the question of what is money? And how can technology fundamentally reshape how we engage in finance and social life? Is crypto a revolution?

If you're listening to this episode in early 2022, then you're probably well aware of the ongoing inflation and commodity price increases both in the United States and globally. You know, money and finance are often the table stakes of how we think about navigating life today. That can both be part of the background or very much in the foreground of our minds, depending on how things are going. And as we wrestle with economic uncertainty in the wake of war, a changing climate and geopolitical shifts things can feel bleak. But at these moments, it's important to stay curious and ask where and how are we trying to make things better? And this is a bit about where that revolutionary technology part just might come in.

Mick Morucci is a crypto-anthropologist, Bitcoin expert and the co-founder of geyser.fund, and NFT social discovery platform. He’s also a prolific writer and publishes regularly on Bitcoin, block chain technologies and NFTs.

In this episode we explore:

  • the cultural and financial origins of Bitcoin
  • what is a blockchain
  • money as information and story
  • open source technologies
  • why decentralization matters
  • privacy and surveillance

and more!


https://www.mickmorucci.com/
https://geyser.fund/

Check out some of Mick's writing:
Bitcoin as a Divine Idea
Why Anthropologists are More Interested in Bitcoin than Economists
The Social Experience of NFT Art

Episode produced by Adam Gamwell

Transcript

[00:00:00] Adam Gamwell: Hello and welcome to This Anthro Life. I'm your host, Adam Gamwell.

Wherever and whenever you're tuning in from, I hope you're happy, healthy, and safe. If this is your first episode of TAL then welcome welcome welcome to the anthro curious family. And to our earbud aficionados, I want you to know how much I appreciate you sharing your time and energy with me and the fine folks that join us each episode.

I believe there's a strong connection between curiosity and compassion and hope. And let's be honest, the world needs a bit more patient wisdom right now. So this conversation has been a long time coming and one that I'm super excited to share with you.

If you're the kind of person like me, that gives a bit of a side-eye when someone says revolutionary technology that will change the world, then you're in good company. However it is important to recognize when in fact we do see a revolution sitting in front of us. Even one that snuck up a little bit under the radar for a long time in terms of mainstream consciousness but now it's finding itself onto the global stage in ways that can't be ignored. If you're listening to this episode in early 20 22, then you're probably well aware of the ongoing inflation and commodity price increases both in the United States and globally. money and finance are often the table stakes of how we think about navigating life today. That can both be part of the background or very much in the foreground of our minds, depending on how things are going.

And as we wrestle with economic uncertainty in the wake of war, a changing climate and geopolitical shifts things can feel bleak. But at these moments, I do try and put my attention towards curiosity and ask where and how are we trying to make things better? And this is a bit about where that revolutionary technology part just might come in.

If you're alive in 2022, you've probably also heard of Bitcoin, and cryptocurrency, the blockchain, maybe NFTs. And whether you're an active trader, you just dabble or you think you'd never touched the stuff, cryptocurrency raises a fascinating challenge to our question of what is money? And who gets to control it?

Today, I'm very excited to introduce you to Mick Morucci. Mick is a crypto anthropologist. He's the co-founder of geysers.fund and brings a background of anthro, economics and creative design to the table. He's also a prolific writer. He publishes regularly on Bitcoin, blockchain, NFTs and all the world of cryptocurrencies.

As my own interest in crypto is blossomed over the past few years, I found Mick is one of the best guides to help us break down what Bitcoin and blockchain and NFTs are really all about in how they're changing the world. So if you're as crypto curious, as you are anthro curious, you're in for a treat. Well, the reality is we're in for a treat either way. Cause Mick is great. Super excited. Let's dive on in. so first off, Mick, I want to say, thanks so much for joining me here on This Anthro Life. And we've been talking for a little while, online, across telegram too, which is appropriate for today's conversation. and so it's a pleasure to finally have you on the program

[00:02:51] Metamick: Likewise. Thanks so much, Adam.

[00:02:55] Adam Gamwell: right on, so to kick things off, I'd like to, get a sense of how you got your own kind of journey started, kind of education, but also interested in where and how you found yourself entering into the world of.

Yeah, no, absolutely. yeah, so I think everyone has a, as an origin story, a Genesis story for their introduction to Bitcoin. I think mine probably goes far back and it starts in 2010 actually, when a friend of mine in university called me over to his dorm room and tell, told me, Hey, Mick, come over and we'll buy some of this thing called the Bitcoin.

[00:03:28] Metamick: And I said, ah, that sounds sketchy. no, thank you. And I completely neglected it there and, but it kept popping up. here and there. and then I about in 20 16, 20 17. it was popped up again and I was like, okay, so it's still going, it's still alive. I might as well put some time to really understand what has happened, what is happening here and, yeah, so stumbled upon, Bitcoin, forums, the Twitter space.

And I think, the community around, around these social sites, we're really good at providing, the basic reading and understanding of what was going on which turned out to be very different from what, people at first, the, what I call the one glance view, right?

When you have a one glance view, it's something that is very different. and it's really easy to dismiss it and just pass it off as something, sketchy and, and harmful perhaps if it's, if it sounds really different. but thankfully it's it requires, I think this is where the anthropology and me a anthropologist to me came in because I was like, okay, let's let us study this a little bit more.

So I ended up looking at, doing a lot of reading about the technology about, the economics of it. and since I do have a background on anthropology and economics, and also having taken some computer science courses, I think that sort of helped me to really put the pieces together and see that, okay, this is actually something really interesting.

and so.Further from that, I sort of went down the, as they call it the Bitcoin rabbit hole, and, found myself then after a few years, working in the FinTech space, working for several different banks as a user researcher. but the calling was strong, and, after looking at Bitcoin and then also other cryptos like Ethereum I ended up in, working at a startup where I'm working now that basically works on, bringing NFTs the realm of social. And so we're really looking at creating NFT discovery and curation platform that rewards engagement in different sort of ways. so yeah, I think a sort of overall at once and, I still remained very much, a bitcoiner seeing this going as a really interesting, disruptive technology that is and that's positive for the world.

but also seeing the potential of decentralized platforms like Ethereum to create all sorts of really interesting, applications, in a permissionless way.

[00:05:32] Adam Gamwell: Okay, so that's great. Thank you for that. And it's exciting also to hear that, there is an element of anthropology that helped you make sense of it, but then also, to, too there's a computer science element that you had as well, knowing some basic coding and that plays an important role too, because we are talking about technology, In terms of that we're developing things. And you mentioned a couple terms here in terms of, decentralized and permissionless types of technologies. And so what's really interesting is that, so some folks, on this episode, may they may themselves be full-blown Degens, other ones may have just heard of Bitcoin or maybe Ethereum. And so they may not even know what the space is about.

So I

[00:06:03] Where did Bitcoin come from?

Yes, let's break that down. So like where did Bitcoin come from? what's the kind of the, again, the origin story, the legend, cause there is a bit of a legendary origin to Bitcoin isn't there.

[00:06:10] Metamick: Absolutely. Absolutely. I think probably if you want to go back, you could both go as far back as like the 1980s. so people talk a lot about today about blockchain, but blockchain, perhaps it was just like the technology that sort of, really Bitcoin is built upon. it's going actually, it was born in 1982, it was created or invented, by David Chaum a very prominent, very prominent computer scientist,

and since the eighties and the nineties there have been, so many different attempts at creating, money, And, encrypted money. we look at it at technology from like a higher level perspective, it's not just been going through this, increasing a war between, philosophies, right? th there's, It really is, a power struggle between the forces of encryption and forces of decryption. And, it really is a struggle because, obviously those who have the power are able to use, that technology for their own good.

but then, those others who are, on other sort of, political spectrums, like more libertarian and individual focus are very concerned about, encryption in order to safeguard things like privacy. So for a very long time, for several different decades, there have been attempts of creating money.

[00:07:17] Metamick: All of them have failed. So you have things like E-cash credit by David Chaum that was bought out by, a big institution and sort of, died as a result. And then you had. BitGold by, Nick Zabul, again, they didn't really pan out and, and then went to a standstill until two thousand eight - two thousand nine during the crash, obviously that's where a lot of the, a lot of the motivation of Bitcoin, arose. Bitcoin was born, then as a result of the financial crisis -and its consequences.

So as we all know, pretty much all of the banks except Lehman brothers was, was bailed out, right? That was, trillions of dollars, going into safeguarding and supporting, banks that, were not being competitive. And therefore for many, the game felt very rigged. we had, Occupy Wall Street, as a massive movement of protest and, that was a peaceful protest, so absolutely worthy.

But II think I wouldn't be surprised if, the creator or the creators, were, were inspired by things like that as well. And, they decided to create a money that was itself, a peaceful protest. basically not trying to change a system from within just creating an entirely different system.

a paper white paper was released, and, but by, by the creator Satoshi Nakamoto, which to this day, we don't know if it was a man, if it was a woman, if it was a group of individuals, And, that paper was released to the public and in January it started to be mined, meaning that the cryptocurrency started to function. So it was interesting origin story, as some people call it the Immaculate Conception, because it was really, released beforehand, there was no sort of pre mine, it was a very fair distribution from the very get-go. The first ever Genesis block, the first ever block of Bitcoin, contained a really interesting message saying, really putting in the title of the Times magazine from January 3rd, 2009, saying, "the chancellor on the brink of a second bailout for the banks", really kind of encapsulating like where this is coming from. what's the context. The context is money where basically the current financial monetary system we have today is, is a Fiat system, which means basically money that is not by anything, which is in itself is not inherently bad, but it's very easily susceptible to corruption. this current system really started in the seventies, with Nixon, and that ended the Bretton Woods system. And, we lived for 40 years, monetary policy that was, quite, quite disciplinary. So you could say somewhat fair then, the last 10 years, we've succumb to it; sort of away from that and are now receding to excesses and abuses of it.

[00:10:03] Adam Gamwell: That's a really good breakdown there. And I think there's, there's so much to unpack there there is this question between centralization and decentralization in terms of who has the power to create money. And I think there is this tension between, how does corruption kind of enter into, into money, right?

And so is money, this, this corruption of value itself, or is it right? Is it that people that are corrupting the money? And so, what we see built in here is like this frustration in the 2008 financial crisis that the game does feel rigged. the banks are getting bailed out and that everyday citizens themselves are losing protections from anything from a social safety net to even just having protection against massive inflation, which is an appropriate conversation for today in late 20 21, also in terms of the cost of everyday goods.

And so something else that, we've seen as this tension, right? This notion as this, it's it's almost like the socialism for the rich or capitalism for the poor and so there's a deep frustration built in with this idea in terms of that there there's a in the west, this common idea that socialism is somewhat of a no-no but that capitalism is kind of the only quote unquote viable option. But at the same time, when we look at a broad system like this, what is socialism besides, centralized authorities helping fund and pay for and keep money circulating it in certain institutions. And so when you see that happening for large banks, it is one of these, like, thinking of Romeo and Juliet or rose by any other name, right. Is it, it fundamentally different is one of the questions. And so even the fact that I love this study in the Genesis block, the first block of the Bitcoin blockchain has this quote from the New York times, In January saying that, that, you know, the chancellor's on the brink of second bailout.

 

[00:11:31] What is Money?

[00:11:32] Adam Gamwell: So I guess one of the questions that this makes me think of is, what is money and and why is that a contentious issue?

[00:11:37] Metamick: Yeah, absolutely. I love the question. Like what is money? And I think this is something. Even though I studied anthropology and economics. It's something that never came up in university, like never. It was always taken as an assumption that money was, a monopoly of this. but if you look at history it's, it's never actually been that way. and actually it wasn't the case, in the very beginning, but let's just quickly take a look at like different examples of money in history through time. obviously we have, a system of barter, right from the very beginning, actually even take it to get even further back, so there's this really interesting number called the Dunbar number, which basically says that, both for animals and humans that we have, like a limited amount of, socialization, that we can do, in the sort of animal kingdom, because, there's the sense of reciprocity. everyone, you exchange what you have to be in that kind of interactive kind of a one-on-one relationship that continues on, And that is a number of 150 people, other, people or animals that you're interacting with. What money has enabled is that it has abstracted that so that you don't need to engage in a constant relationship with, another, individual.

but you can interact with the network and money abstracts us away from those single, one-on-one interactions of trade. and so, money brought us out of the realm of barter, and into the realm of abstract, information, exchange, and money is a type of information.

[00:12:59] Metamick: We started with that, with the like different types of commodities, shells and, horns and swords and, all sorts of things. even rocks, like the famous rice stones that I want to get to in a second. and then we moved, to a hard metals because we slowly realized that all other types of money, all other types of commodities could be easily debased.

shells actually, you can reproduce shells, like you can create shelf farms, and create shells and that way you can, debase it and, abuse that. And then with, with heavy metals, we slowly moved on towards discovering that gold is, the hardest money because it is the most scarce.

I think if you look at silver, there's the yearly, it's called a stock to flow. the yearly flow into the stock say is around I think, 10%. but then if you move over to gold, it's around 2%, right? So through time, we're through errors and mistakes harder money won.

[00:13:53] Metamick: So people, I don't know if you have two nations and you have one nation that uses silver as its money and another using gold. the nation using gold will win out because there'll be able to buy out the assets that are depreciating in the silver country.

And this is exactly what happened, with a famous example of the rice stones, the people of Polynesia were using these rocks, as a basic, a store of value, this sort of, rocks shaped like, like wheels.

And, obviously they were just, I think granite rocks, that, were passed on orally and you had the system of elders that, knew who it belonged to, who they belonged to in the past. It's actually a really interesting example of a blockchain and a human system, Because, they all had every, all the elders knew who had belonged to in the past and knew that was the right rock, and that they were then passing it on when somebody with enough wealth could afford it. But then Europeans came along and said, this is another rock, just exactly the same the other one.

and we're going to insert in the system and this is how the money was broken because the younger generation said, yes, I will happily trade that. It's exactly the same physical object. I don't see why it should not be considered money like the elder generations were saying. and yeah, it's that's another example of harder money winning through time. and gold, being the hardest money there has been I think probably since the 1500s or so, we've been using that as the main store of value because it is scarce. and it has generated probably also a lot of economic growth into the future because all of a sudden with harder money, you can save, and you can make money, save that money and use that money to think forward into the future and you can reinvest it. So it has been a key technology, for human, development and ingenuity. I think the one problem that gold has though, is that it's easy to seize, right?

initially people, started, entrusting, banks to hold their gold. And then slowly that has been, entering the purview of the state. And so on, like right after the war, I think the United States, with the Bretton Woods System established that and, basically made, holding gold, illegal and only then the United States government could hold gold. and so it was seized as an asset and that's where sort of the current system started emerging.

[00:16:03] Metamick: But it was only until the seventies that, the government decided to break that peg of the dollar to gold. since then the gold has appreciated enormously, it has, increased enormously because of inflation, which, you're bringing up now, which led this point in time, We're seeing 6% inflation at the moment, which is not a good sign, which means everyone is, everyone literally is worse off.

[00:16:24] Bitcoin and the Problem of Money

[00:16:24] Metamick: so to take a quick step back,I think Bitcoin is interesting because it elicited all these questions for me and allowed me to study it and go a little bit deeper in the topic and, even looking at historically the transitions of money and, even in anthropology, I think, where often things are relativized this is very important topic of discussion though because at the end of the day, there are some monies that are better than others, right? In terms of its ability to you to save, and look forward to the future. So another point about what if money is that at the end of the day, like I was saying before, it's a, it's an abstract system, right, that enables to exchange, goods without having to, actually use commodities. It is an incredibly powerful system to enable society as a whole, to know instantly through the mechanism of price, is valuable, what is not valuable, is scarce and, what there are excesses of.

But we live in a moment, where price discovery is really hard to achieve. Meaning it's hard to really understand the things true value is. And, I think a lot of the the Bitcoin community as well, a lot of, people in the Austrian economics school of thought would probably come out and say that this is because we're in a in history that money, has been abused.

And, like you said before, this is really good quote, which is, it's not money that is corrupt, but it's people that corrupt money. think it's a really interesting and telling story, especially the context of I know a lot of, anthropology today is about, the problem being capitalism, what if we were to rethink that a little bit: what if the problem was not money itself, but what if was our involvement with the money actually, generated a lot of the problems that we have today?

that's a really, really fascinating and challenging question, right because often times we don't take the time to rethink what, in a deep sense, what is money? What does it help us do? Right. you know, money as a technology that helps us, Abstract our relationships that we can work in a wider social network of exchange. But then at the same time, thinking through all this history, it's giving us also this question around store of value, which is something that's, that's fundamentally important to like what Bitcoin is even framed around.Right? how do we measure and understand value through the the mechanism of price, how do we know what the true value of something is? the closest, people might have is the stock market in terms of watching price go up and down based on an investor interest and also sentiment.

[00:18:39] Adam Gamwell: I think one thing that really stands out here too, is that. One: money isn't one thing, right? It's changed over time in terms of how it's worked. And it has some continuity through time in terms of hard money has won out and has done a few like, let us think about saving for the future, which is interesting, lets us understand value easily on amore or less equal playing ground to understand the store value in this case.

but then also, as you're pointing to too, there is huge set of like fundamental social parts. And so I love the example you gave. Also it's heartbreaking, to, to think about the rice stones and that's a great example of both a store value, but as a store of also a cultural knowledge, right?

[00:19:13] Adam Gamwell: And like in terms of we know who had these stones I don't know about you, but I don't have a story with a dollar I have in my wallet or a Euro or something. There's not a story in the same way, you know, sometimes you'll see if you go to a restaurant, you'll see, you know, a restaurant has like their first dollar that they made, on the, on the wall and a plaque.

And like, as close as we get to money, having a historical story, like an actual physical, bank note,

[00:19:38] What is the blockchain?

[00:19:38] Adam Gamwell: So one of the reasons that this matters is because Bitcoin Ethereum and any other kind chains or layer ones, know, if there's like Polygon or MATIC or Avalanche, other chains on there as well, all these are functioning on blockchains.

So let's fill in a piece in case people don't know what a blockchain is.

Why is that fundamental to, this kind of technology?

No, absolutely. So blockchains are essentially a chain of blocks containing information of the transactions. Each block has a certain amount of space that it has to be filled in by a certain amount of time in order for it to,Be part of the next, chain essentially, or to be the next block of the chain. and the reason why it's really important is that it creates that historical reference of what happened, which is really important because if you don't get your history right then you can, rewrite history, but the blockchain enables us to determine this is the history of transactions that we can all agree on and have consensus over, in order to then, then think about creating the future of transactions.

[00:20:39] Metamick: So in a very, kind of generic sense, it's establishing consensus over, what history is for that blockchain. just to give you an idea, the Bitcoin blockchain, creates a new block every 10, roughly 10 minutes. And I think it has a size of around, one or two, megabytes per block, which was very little So what that allows is, is for anyone.with a one terabyte hard drive hold entire history of the Bitcoin blockchain easily at hand. So I urge anyone who's listening to and try to do that.

talking about mining; mining is generating new coins. I'm talking about running a node. by running a node, you're keeping the ledger stored, in, in whatever sort of a hard drive you choose to use. You could run it on your phone, your computer, may run it, a, on a separate hard disc.

[00:21:29] Metamick: and this is key components of the decentralization of Bitcoin.

it really helped me understand what Bitcoin is as well, because for literally a hundred bucks, I could run the entire Bitcoin history and you can literally be Bitcoin that way, that makes sense. Like you can the fact that anyone can run it and which makes it, the most, secure and the most, decentralized because it's really easy for anyone to run it.

[00:21:56] Metamick: So I think at the moment you have something like, at least, between 10 to 50,000 nodes running globally. So that's probably the most reproduced, digital ledger, in existence because it's just replicated everywhere. And so the point of that being is that there's not one single entity that can disrupt it or change it and by running it, you can verify the history of transactions. And I think when it comes to other cryptocurrencies, like Ethereum, it becomes increasingly difficult to run it. Like you can definitely run it. I tried and I wasn't successfully technical to do that. so the simplicity, it's part of the elegance of Bitcoin and why it is, more, more decentralized. I think whats key about this too is this this is a great illustration of what decentralization means in that every single person that runs a node on their computer has the entire Bitcoin blockchain.

[00:22:47] Adam Gamwell: So you can, you know, you can reference and look at the whole thing if you want to, but then obviously, this, this means it's a public ledger, right? Anybody can see it. So to your point, this is also something else we see in cryptocurrency being a kind of a trustless system, meaning that there's no one source of authority that one has to trust to say, I do actually have the answer in this case, we see that 10 to 50,000 nodes running at any one time.

Meaning that if one's computer shuts down, it doesn't matter that the system is still running. Right. You have to like literally shut down everything. And even then I imagine there's some some backups built somewhere. but this is an interesting point in terms of that. It's quite accessible and that it's visible, you know? this this kind of also points to two of the things that Bitcoin's trying to solve for right.

One, this tension between centralization and decentralization of who gets to have things count as money, on one level who gets to count things as a store of value. And two, what is the information behind that value? So I think I liked what you said before that money really is a system of information.

As a system of information we can literally see in this case, you can actually get the system of information to hold it and see what that

[00:23:47] Open Source and the Social Contract

Yeah.

[00:23:48] Metamick: And I think people often from when you first think about it, you wouldn't think about it that way, but that's actually the beauty of it. And I think one of the key elements of Bitcoin that is not often appreciated. And, it's often, from their side of computer science, hard to grasp, but the concept of open source is absolutely important, right?

open source means software that's free for anyone. So Bitcoin, the entire protocol is free for anyone to use. You can take the entire Bitcoin protocol, replicate it, and this is actually how you have 2000 other cryptocurrencies, right? As they just They're literally copy pasting Bitcoin, and calling it something else.

[00:24:26] Metamick: The point of open source and the philosophy behind it basically says everyone has to gain from a system where everyone has access to it. And this is what also makes Bitcoin so powerful from a security perspective, because if you build something in an open source sort of way, you're building something in a, what's called an anti-fragile sort of way.

you're opening yourself up for attack, which means. a challenge initially, but as you learn what those attacks are and you strengthen your immune system to it You become, very resilient and also, or in other terms, antifragile, meaning that as you, as, the more you get hit, the stronger you become, right?

[00:25:03] Metamick: So if you, as I say, if you, those who, if you don't die, you'll you come out stronger essentially. so that's, a really important element of it, which, which means also though from the perspective of, decentralization, is that anyone can check the numbers, right?

We actually have absolutely no idea how many dollars are in circulation. We have absolutely zero idea, right? Because obviously it was the money that started from a sort of, in a physical way. And we have no idea, like it's whereas we were moving towards a world whereBitcoin is founded on the idea that you need to know like what the total supply is in order to move forward. And so just to highlight that bit a little bit more, right? So there are, this concept of the social contract of Bitcoin.

[00:25:46] Metamick: So the first elements of social contract of Bitcoin is that there will be no confiscations, nobody can just, by default or by Fiat, take your coins right. There is also no censorship. there, there's no control over others, input of information. And then there is no inflation meaning that we know exactly what the supply of Bitcoin will be in a hundred years from now.,We know that every four years, the supply of Bitcoin is halved Every four years, it gets halved again.

And there is something very simple, but very important because we don't know what the monetary policy will be with United States dollar, Euro, in two years from now, we have absolutely no idea and that not knowing creates instability, and, and uncertainty.

Whereas, the belief here is that if if we know that supply increased tends to zero, We can plan ahead and we can also safeguard or wealth going forward. And that's the fourth point is that anyone can verify that there are no confiscations, that there is no censorship and there is no inflation because it's an open system.

[00:26:50] Privacy and Accountability

this is an interesting point. That's also because, often get the criticism that Bitcoin is used by, by terrorist financing or money laundering or these types of things. this is exactly why you shouldn't do that, for those cases because it's entirely visible.

[00:27:05] Metamick: And you wouldn't want to do that. there are ways for you to use, to mix the coins and come out the other way that it's, very anonymous and hard to decipher, but, also because of new technologies that are emerging around making sense of this data, that can probabilistically tell you who is who, this may be, this may be a problem, if you want to use it for nefarious activities.

Now, there are other cryptocurrencies that have stronger privacy on the base layer, like Monero but, this is really important, this actually may in some ways scare them to thinking, oh, this is the next, the next way for the government to surveil you.

But I'll just say, just hear me out here. So this is really important because we need to know, at the very base foundation layer, and we all need to be sure that there is no corruption at the source. Like we have this fountain, we need to be sure that the fountain is not, injecting more water than a should. And we need to be sure that we all need to see that, this is the foundational layer. Now on top of Bitcoin, there are second layer technologies that are being built like the lightning network, that is a new network built on top of Bitcoin, that is entirely anonymous and is one-to-one backed by real Bitcoin.

[00:28:17] Metamick: You are putting your Bitcoins in a secondary layer to transact in an anonymous sort of way, that preserves privacy, which is an absolutely important key component. Because, as we live our lives in the digital realm, we will need ways for, for privacy to be, to be guaranteed as a basic right.

The government, doesn't go around, seeing what we're doing, where we're using cash, right? Why should same within the digital realm? they shouldn't and therefore, uh, lightening enables that, level of an anonymity for the citizens.

[00:28:46] Metamick: So in some way, what between is actually doing is that they're bringing accountability to government. Because governments will probably be using the on chain Bitcoin and it will ensure that Bitcoin doesn't get debased, but, at the user level it preserves their privacy. Do you see what it's doing here?

It's like exactly the opposite of what,CBDC or central bank digital currencies or the current system is right. It's essentially the opposite. Governments have no accountability and, and people, have, the, the big brothers, eyes staring right in their wallets.

[00:29:20] Adam Gamwell: I thought that's really interesting and good to think with. I'm contemplating this cause it this case, we're seeing it as this kind of opposite where we have a public ledger, but then the individual users themselves can be anonymous.

And

[00:29:30] Public Perception of Bitcoin

[00:29:30] Adam Gamwell: did this really interesting survey on the public perception of Bitcoin. And so this plays into that, especially for folks that either, you know, use Bitcoin or have never used it.and there's like an interesting back and forth, a perception that it's used for criminal activities or nefarious things, because it's anonymous, but then it's interesting because anonymity is is a fundamental point. but in it for a very different reason, yeah. So yeah, I probably would have to mention that it was a bit of a pilot survey. So we got only around a bit less than a hundred, respondents. So, the confidence intervals are not, are not perfect, but I think it really helped to give me an, and people are really good idea.

[00:30:05] Metamick: And to, the difference between people who have bought Bitcoin and people that have not bought Bitcoin and their different perceptions of it. I think one of the, one interesting thing that came up. When you look at, people that have not, ever bought Bitcoin, they, overwhelmingly see it as, if you got, what kind of descriptors they use to, to think about Bitcoin, they often thinks about things like fraud, scam, Ponzi or things that often those are a little bit more sophisticated or may say things that are, that it's actually irrelevant or useless, or, trending exciting, cool. Some talking about the un-ecological, wasteful element of it as well, which is, often cited criticism. Whereas if you look at people that have bought Bitcoin, if you look at how describe it, they think about it in terms of, disruptive sort of innovative technology safety, as resilience, as security, as something that enables them to have control over their lives. something that is around freedom and central censorship resistance. valuable sound and strong, incredible invention, et cetera, et cetera. So there's definitely a very big disconnect there. and I think, honestly the interesting one I'll bring up is, the value judgment of Bitcoin, right? So is it negative versus is it positive? And if you look at the, these two different groups, they're answering completely different ways. So owners of Bitcoin, will end up, saying that it's, very positive, whereas those who have not had Bitcoin overwhelmingly see it as a very negative.

Now, again, this is, this is, pilots. So I wouldn't want to describe it as a general as a definite truth, but, I think it's something it does say. And, in my mind, if you have not really. engaged with it. It's really hard to get, an objective and real a sense for what it actually is.

Like you will be just subject to that one glance view. I think also very interestingly, similarly, in the United States, this has been really big technology sort of innovator, Tim Woo he wrote several different books about, technology and privacy.

And, he's not a super hard proponent of Bitcoin, but he does own some Bitcoin. And because he owns some Bitcoin, he was rejected from being a technology, sort of a cryptocurrency lead specialist in the Biden administration because he owned it. Now that is a really like difficult bias.

There's an angle. but it is a bias nonetheless. They will say you're bias if you own it, but if you don't own it, you have that same bias of not knowing what it is that you have. So it's it is a little bit tricky.I think it's really important, especially for anthropologists to tinker with that and play with, understand what, what is going on.

But if you don't then you risk closing yourself off from something very important. and like,Again, I think it's something that I think eventually everyone is going to have to, because, as I said, I got to know Bitcoin in 2010 and, discovered it again in 2017.

It's, it's something that sticks around at lingers. and it after some time it forces you to pay attention to.

[00:32:53] Inflation, Increasing Access and an Ideal World without Crypto?

[00:32:53] Adam Gamwell: Yeah. just kind of looking around on the Twitter verse or Reddit too, it does seem that there is an increasing realization by wider mainstream culture that Bitcoin is not something that you could ignore and independent of whether one sees it as a disruptive and innovative technology or something that's really cool, or, a quest or a way to build wealth or financial freedom or other people see it as dangerous technology or something that's going to disrupt, Fiat systems, in a, in a positive or negative way, like depending on, you're going to have different perspectives of what it might do, but it's interesting that it's not something that we can ignore that it has staying power.

And that in itself, to your point, you mentioned like just that it spawned over 2000 other cryptocurrencies also. So it has a Genesis block; it itself has kind of a Genesis event almost, in this space. And so interesting to see that yes, it has, stuck around and only continued to increase, I think, in relevance I don't remember the exact number, but Walmart, you know, one of the biggest retail chains in the world just put in like 10,000 Bitcoin ATM's, or committed just last,I think a few weeks ago, which says something very interesting because you purchase Bitcoin, they give you a receipt, then you have to go get a digital wallet.

You have to get through the whole process. So you're not getting your Bitcoin that right from that. but it's interesting that points of access are being put in, legitimately everyday spaces. If you're going to shop at Walmart, for example. So that's that tells us something that big retail is also thinking about this, right?

it's individual people, but also a big companies. Corporations are also getting into this and shaping it in new ways.

[00:34:22] Metamick: Absolutely. And just so to chop off that idea. So I think if there's, if you're not interested or if there's not, it's really important to understand that this is an alternative, right? That, in the ideal world, maybe we wouldn't even eventually use it or are we not find that the reason for it, but we forget that the world is big and that, there are many countries in the world that suffer from really high degrees of inflation. if you look at countries like Argentina, this year experienced 50% inflation. If you look at several parts of Sub-Saharan Africa, you have double digit inflation. this is a result of bad money that is mismanaged by governments that is literally destroying people's wealth. Because 10% inflation means that in less than 10 years your money will be more than halved of the purchasing power. This is a very important thought that nobody talks about in economics. Inflation is a bit of a taboo word it's or even out of economics.

It's a double thing that we don't really, we're not really allowed to question like, and hopefully our wages go up by 5%, just because of inflation, but not everyone has is that lucky? Outside of the west. And so if there's no reason for you to get into the Bitcoin, because you feel safe then I'm absolutely fine.

a lot of people in the west have very sophisticated financial tooling that can allow them to hedge inflation through other kind of sophisticated means. but that's not true for, for the seven, billion people on earth. And I think this is where it's really interesting, but you starting to see massive adoption of Bitcoin around the developing world.

[00:35:53] Metamick: Like actually even in the United States, if you look at the demographics, something like 20% of African-Americans own Bitcoin versus like half of that for, for non- African-Americans, which is telling. But even, around the world, Nigeria, something like 30% of Nigerians own either Bitcoin or cryptocurrency. It's staggering. And El Salvador, has, introduced Bitcoin as a legal tender, it's increasing the use of it, massively.

There's a saying that as Bitcoin it's sort of to the teachings of Jesus, of course, That's the path is narrow, but also the last will be the first, right?

[00:36:27] Metamick: And some way those who need it the most are more likely to come to accept it. And to this day, I think it's something like the 15th, currency worldwide, which is, quite big.

And keep in mind, a lot of countries are still using a dollar as their basic, denomination, or peg the currency to the dollar and therefore a lot of these countries may think twice about keeping that, in the context of the United States dollar being. so inflationary. So inflation is honestly one of the most powerful forces at play when it comes to poverty, because the rich are able to navigate that path very well things, like gold, to things like, very interesting kind of derivatives and financial, assets.

[00:37:07] Adam Gamwell: that's not true for the entire rest of the world, right? And this is a really interesting tool that will possibly, lets countries out of poverty. it's a crazy thing to say, but it is absolutely what I mean. That's fascinating. I'm really glad you brought that up too. Cause people may not think about the question of inflation because it's, both kind of a taboo word you know, but then also it's something that even like the U S government in media will just downplay, even like in the inflation index every year, it's like, of a basket of assets that they use to determine the, asset price.

And they've literally taken things out of that basket. Used to be steak in the 1950s. And now it's like, deli turkey, like they literally were changing the things so that the inflation sounds different.

[00:37:48] Metamick: this is absolutely right. Absolutely. And also if you think about like general inflation, when it like things like house or university are not in the basket of inflation, even though they're experiencing five to 10% increases, per year. inflation is a lot worse than what they even say it is. And some people are even claiming that it's even in the United States is somewhere between 10 and 20%, which,I wouldn't be surprised. andI think honestly, it may be the single cause of a lot of the unrest we're seeing today. that social economic, ethnic racial, this conflict left and right. I think a lot of that is just because life is becoming more, more difficult. It's becoming more expensive, year.

[00:38:29] Adam Gamwell: Yeah. And without, an appreciable increase in income right. pay that that people have. And so it's like if inflation outpaces that, then then we're all doomed to poverty and so to your point why like Bitcoin asa non-inflationary, monetary technology raises such interesting questions, and promise in this regard, in terms of how might we rethink again, what does money doing for us? how can we, participate in systems that wont' succumb to the same kind of inflationary practices that we're seeing.

[00:38:59] What Makes Bitcoin Different from other Crypto

so obviously when it comes to the question of money, You need an asset. that is hard. that will preserve your wealth and your energy through time. That is like a very like obvious thing from a, from an individual's perspective. Now there are other assets, there are other asset classes like Ethereum, cryptos like Ethereum or others where like in inflation for their purposes, is a means of growing and scaling and find their use cases may actually make sense.

[00:39:35] Metamick: So I'm not like an anti-inflationist per se, like,I'm all for, the free market and, Ethereum's inflationary policy and, has allowed them to scale and achieve very interesting use cases. So all good, congrats to them, on that.

Absolutely. but that is at the same time, at least for me, Not money in the same way that Bitcoin is. Like with Bitcoin, again, we know the schedule of the issuance and a hundred years from now, but Ethereum, we don't, we really, we have no idea. And so obviously that has to mean something when it comes to trust in an institution, this is what makes Bitcoin trustless. ,It makes Ethereum an interesting, asset to invest in and speculate in or whatever, something that obviously has an application layer that you can build on top. but money, I personally don't fall in the category of people that will see Ethereum as money.

[00:40:24] Adam Gamwell: that is sensible Bitcoin was also premised on this idea as it functions as a store of value. Right. Whereas Ethereum is more a utility token, right.And its use, you can build as you noted applications on top of it.

So I think that that's right. That's actually, what's interesting too, because even as there's been an explosion of cryptocurrencies out on the market Bitcoin is, perhaps I don't know if it's the only, but it's the only one that I know of and my knowledge is quite limited, but just, you know, the only one I know that functions as this kind of store of value that like that, I think most people agree that's what it does versus it's a utility token. And the way that Ethereum is that you use to then build applications in the same way. So I think there's something interesting there too, in terms of its staying power.

And like also why it's one of the most well-known ones also, because it has, I don't know, a set of protocols that's somewhat easier to grasp. I mean, it is difficult. We're not, I know this whole conversation is showing why it's difficult, but at the same time, you're right. We know how many there's going to be. We understand some of the protocols around it. You can have it on your hard drive.

Ethereum and anything else beyond that is quite difficult and that they have different functions, it's, it's okay. different. That's not, not one is not better or worse, but I think you're right in terms of thinking about Bitcoin as a store of value or a functioning as money.

So in the, in the U S there was recently the,Bitcoin futures ETF. So people could trade the futures of it, which is a conversation for another time. But just this interesting idea in terms of that we're seeing traditional finance begin to use their instruments, to interact with Bitcoin, albeit in their, arm's length, safe distance version of that.

And so to your point, you mentioned about gold before, too, that again, I don't remember the numbers too, but it's like gold and Bitcoin are not super dissimilar in terms of the top 15, most valuable assets in the world, which I think gold is around $7 trillion worth in market capitalization. I think Bitcoin is around one something. Seven, yeah, just one order of magnitude behind, I think it has just crossed the, Bitcoin's just crossed silver, in terms of market capitalization.

[00:42:22] Metamick: So yeah, so there's still a way to go for it to reach gold but it being, how many people around the world can buy gold that easily, right? not that easily. With Bitcoin, you can own the keys to your funds with gold, you cannot do that on your pocket, on your smartphone, especially when it comes to our, you know, a new generations that are so digital.

To my mind, they're gonna want a digital asset and digital store of value. and to your point around the question of Bitcoin versus other cryptocurrencies. Like it comes up a lot and, we have so many that you're like, oh, why Bitcoin, if there are so many others, but it really has to do with the technology and the degree of trustlessness that this level of decentralization offers it, you and I,Adam could just kickstart our own Bitcoin and call it Mick and Adam.

nothing stops us from doing that right. But who would want to use it? Like we would run it and we would be mining it. but people would have to trust us to do so. What would make it more trustless is people start, start running their own, mining tools, for it. They start, verifying the transactions. It starts growing as a decentralized system, but thing is there's something like network effects, right?

[00:43:31] Metamick: So network effects mean that the more people join a set of, a particular network, the more people will be joining inside of them. It's an effect, a lot of physics and social dynamics really, and, Bitcoin, because it is the first one, because it is already so massively decentralized. and also because it has an origin story that is very powerful. An individual that created it, that is anonymous, that left. This is actually a very important point that I forgot to bring up. So Satoshi Nakamoto created it and then disappeared. He is not running the show. No, one's running the show.

And in 2017, there was a very important moment in history in Bitcoin, where there was a, a hard fork, like some people disagreed with a block size, they wanted to increase the block size, so that, that would be able to make Bitcoin more usable and to transact on it. But the whole point was let's not change the rules because it's, if we change the rules here, we can start changing the rules everywhere.

The point of Bitcoin, the beauty of Bitcoin is that in 12 years, it literally hasn't changed.

 

[00:44:40] Metamick: So this is a key element of it is that it's so decentralized that literally, no, one's able to change the rules. This makes it true trustless.

And another key element of why it is important because with Ethereum, There's a lot happening to moving from proof of work, the current consensus mechanism to proof of stake.

there's a lot of uncertainties, but Bitcoin, there literally are no uncertainties., like, you know exactly how it's going to run in a hundred years. and that makes it very, a very powerful characteristic elements of it.

[00:45:13] Adam Gamwell: Oh, that's great. Now I appreciate you saying that. That is a key piece too. why it has staying power, but then at the same time because you can explain it to me today or this in 50 years, and it's going to be the same

[00:45:24] Don't Trust, Verify. Watch History and DYOR

[00:45:24] Adam Gamwell: So as a final question, if somebody was interested in learning more or getting into the space for the first time. we are thinking through this question in terms of the public perception, but also this notion that not all cryptos are created equally and that's an important element of DYOR do your own research or something else that you you've noted don't trust, verify so yeah.

How do we think about this? We're coming into this from the first time that many of us in terms of Bitcoin. So there's a lot of other cryptocurrencies. How do we know what to even look at?

[00:45:56] Metamick: Yeah, no, absolutely. So it's very alluring. It's a very alluring narrative to come in and think you, you have all these different cryptocurrencies, we should evaluate them on an equal footing and we should be open to at all. That is an absolutely correct? Initial philosophy to approach a new space, but it's something we also have to be very aware of that. There is a lot of the great majority of them, 90% or more are likely scams. And we have to be absolutely aware of that. As we, they know that because they're simply copy paste of Bitcoin.

So you know, that, that said there are a lot of very, powerful and interesting use cases and tools out there. But to be absolutely blunt, like Bitcoin stands on a completely different footing as all the others, both from a level of, The fact that it has survived and lived 12 years, that it is the best and most secure implementation of proof of work.

And it is basically the most decentralized cryptocurrency, because it is easy to store the history of transaction and run a node. And it is at a point now of basically integrating all these different layers on top of it that make it not just a store of value, but a money.

So yeah, sure. Be open-minded but also be very careful what you're getting out there.

[00:47:15] Adam Gamwell: Cool, that makes great sense. And it's, it is an important point for us to recognize that things can be shiny because they're new, but at the same time, It is part of understanding your own research and then understanding what it is that you might potentially be investing in or spending your time getting to know.

[00:47:29] Metamick: Right. Right, right. So I think there's a term for that is like the Lindy effect. So the more something is has persisted and lived through, the more history has, the more legitimacy it has. Gold has a Lindy, a massive Lindy because it is thousands of years old. Bitcoin is 12 years old but every year it gains it wins via the history of success.

So for example, Ethereum is going to move to proof of stake. That's going to almost reset that clock of history. So yeah, it's sort of stuff like that. We need to be like history gives it a legitimacy rather than the other way around.

[00:48:10] Adam Gamwell: Well, thank you. This has been such a fascinating conversation. we're totally going to make a sequel of this and and build more, but thank you so much for joining today. This has been great.

[00:48:17] Metamick: Oh, likewise. Thanks so much for inviting me. Look forward to the next time. Cheers.

[00:48:22] Adam Gamwell: Many thanks once again, to Mick Morucci for joining this podcast episode. You can check out his work, including essays titled Bitcoin as a divine idea, the social experience of NFT art, and why anthropologists are more interested in Bitcoin than economists. As well as check out the startup he co founded geyser.fund, all links are in the show notes.

Also be sure to check out the mini episode on NFTs and the question of art that we made as a companion to this Bitcoin episode. Link also in the show notes. All right, folks that does it for me this time. It's a pleasure as always to have you on board. Please keep the emails and tweets and comments coming. I love hearing from you corresponding with you about anthropology and business, career growth, the future and everything in between.

See you soon. I'm Adam Gamwell and you're listening to This Anthro Life.

Mick Morucci Profile Photo

Mick Morucci

MSc

With a background in Anthropology and Economics, Mick has been studying the world of Bitcoin, cryptocurrencies and NFTs for the past four years. He now works with early stage startups in Web3.0 space as product manager, designer and researcher and is venturing into entrepreneurship.