Guests: Andrew M. Bailey, Bradley Rettler, and Craig Warmke, philosophers, Bitcoin enthusiasts, and coauthors of the new book Resistance Money: A Philosophical Case for Bitcoin.

In a Nutshell: Whenever Bitcoin makes headlines, skeptics dismiss the cryptocurrency as a solution in search of a problem, a technology with no mainstream uses, or a Ponzi scheme waiting for its next sucker.

On today’s show, the Resistance Money trio make a compelling argument for Bitcoin as a necessary force for good that preserves our freedoms against financial surveillance, authoritarian governments, and volatile monetary policy. Our conversation will challenge many of your preconceptions about Bitcoin and the role of money in a free society. And the more open you are to new ideas about Bitcoin, the better equipped you’ll be to answer your clients’ questions about how digital assets do or don’t fit into their financial plans.

.Andrew, Bradley, Craig, and I discuss:

  • Theories about why Satoshi Nakamoto invented Bitcoin and its possible connections to the 2008 financial crisis.
  • What sets Bitcoin apart from the more than two million other cryptocurrencies.
  • Thinking about Bitcoin as “digital cash” rather than “digital gold.”
  • Why Bitcoin’s price volatility may be more of a strength than a weakness.
  • A philosophical thought experiment that challenges us to stand behind a “veil of ignorance” and consider Bitcoin’s true value as resistance money.
  • Does Bitcoin facilitate more illicit activity than other forms of money, like cash?
  • How “green” is Bitcoin and how much energy does it really take to power the blockchain?
  • The benefits of Bitcoin as resistance money to people who live under authoritarian governments with unstable banking systems.
  • What financial advisors need to understand about Bitcoin even if they’re skeptical about its value as currency or investment.

. Quotes: 

Bradley Rettler on the need for Bitcoin as resistance money:

“Bitcoin enables people to fight against the creeping authoritarianism that we see in governments and corporations. On the government side, there’s increasing interest in being the central hub for all financial transactions and learning about every single one of them. There’s an increasing pressure to report ever lower levels of transactional amount, what people are buying and selling. There are efforts to force banks to unbank people that are considered either undesirable or untrustworthy by the governments. And there’s an effort among corporations to monetize our data, especially our financial data. While some people are using Bitcoin to store value who already have a lot of money, other people are using it to buy basic necessities because they’ve been cut off from their country’s monetary system. And some people are using it to buy protest items that they don’t want their countries to know about. Some people are using it to buy things that they fear someday might be used against them in a court. Bitcoin is private, relatively. It’s resistant to censorship. And it’s inclusive. The vast majority of people who are using Bitcoin for its privacy, censorship-resistant, and inclusion features succeed in doing so, and we think, therefore, succeed in resisting the authoritarianism that they’re trying to either directly fight against, or at the very least circumvent. And those are the people that we mostly care about having access to Bitcoin.”

Craig Warmke on why Bitcoin isn’t a Ponzi scheme:

“Bitcoin is unlike a Ponzi scheme in that it’s incredibly useful. It’s a monetary unit that you can send around the world within a second. It has no non-monetary uses, that’s true. So it’s not something that you can put around your neck on a chain or you can paint a dome with. And that’s something that I think gives people the impression that it’s created out of thin air. There’s nothing to it, and the price just fully depends on how much people are willing to pay. And that’s true for all kinds of assets, but Bitcoin was meant to be used as a kind of monetary asset. In Nigeria, something like 10% of all transaction volume consists in just flinging Bitcoin around. So Bitcoin is like gold with wings. You can transact with this kind of digital asset very quickly, more privately, and it’s very hard for people to stop you. Think about what it means to test that you have a genuine Picasso. You have to go through these series of tests, even with gold, to test whether or not it’s the genuine article. With Bitcoin, this is tremendously easy. You can verify Bitcoin for less than a cent. All it takes is a query to see whether or not the Bitcoin you are about to receive or that you have received is genuine Bitcoin. This is the reason to think that Bitcoin is primed to be something like money and not just a Ponzi scheme, because not only can you fling it around everywhere, but every person who gets it flung to them can test instantaneously whether it’s the real thing.”

Andrew Bailey on why financial advisors should learn about Bitcoin:

“Interest in Bitcoin is high and it’s likely to only get higher from people thinking about investing in Bitcoin. And the reason is fairly obvious. It’s a scarce asset where interest is already high and that offers resistance opportunities in a world where authoritarianism is also going up. Supply is fixed and everything we know suggests that there are reasons to see demand go up as well. So interest will remain strong in Bitcoin. What do we do about that? I think that Bitcoin is weird in many ways, as far as investments go. And a lot of people have ethical qualms about it, and that’s really what our book is about. It’s not about the investment side, but it’s about thinking about the ethics of it and whether this is good or bad for the world. We can help you think about Bitcoin carefully and in a comprehensive and neutral way. Asking questions like, ‘Is Bitcoin good for the world? Would I want Bitcoin to be in the world if I didn’t know who I’d be?’ And we do this all within a philosophical framework, thinking about these things neutrally. So, if you’re in a position where you want to talk to people about Bitcoin or they have questions, we can help. Not answer the questions, but at least approach them thoughtfully and in an informed way with lots of recent data.”

Resources Related to This Episode

  • The Digital Money Advisor Podcast During the last big surge of interest in Bitcoin, crypto, and NFTs, I had a series of conversations with thought leaders, writers, activists, and financial advisors about where the future of money was headed. I combined my episodes with the Resistance Money trio into one megapod.