Episode: Craig Warmke is an assistant professor of philosophy at Northern Illinois University. We discuss how Bitcoin sits at a unique intersection between philosophy, fiscal policy, economics, computer science, game theory, and the meaning of money.

Insight: The deeper you dive down the Bitcoin rabbit hole — especially on social media — the more fervent the belief in Bitcoin’s power can be. All that evangelizing can be off-putting, especially if you’re just trying to educate yourself and your clients about the investment potential of digital assets. But unpacking some of the weightier issues surrounding Bitcoin can deepen your understanding of how people think about money, the problems that Bitcoin could indeed address, and where our monetary system could be heading.

3 Quotes from Craig Warmke:

You do see people on Bitcoin Twitter that have this kind of more religious faith in Bitcoin. They think that Bitcoin is going to solve all these societal problems. And I think this is unhealthy. There are grades or strengths of faith, and I think having the sort of faith in Bitcoin that’s like believing if you sit in a chair it won’t fall over, that’s reasonable faith in Bitcoin. Like you’d have faith in God? Some people would say that’s idolatry, I might say it’s maybe unwise or unhealthy or unreasonable. But then there are all these grades in between.

Bitcoin is a synthetic commodity. It’s a commodity like gold, but with only monetary use, like state issued fiat money. And I think once you start thinking about it in this way, you see that both fiat currencies and Bitcoin are similar in another way, which is that dollars were abstract all along, just like Bitcoin. And that’s why they have only monetary use. Suppose I hand you a $20 bill. What have I handed you? I handed you twenty dollars, but I also handed you one bill. So there are two different things here. There’s the singular physical bill. And then there are the twenty units, the twenty dollars that the bill itself signifies. So we have to distinguish between the financial instrument, the bill, and then the actual currency, the dollars. This is exactly what’s going on in Bitcoin.

Whether someone is ultimately pro-Bitcoin or anti-Bitcoin, I think that careful reflection on the kinds of biases that we might bring to the table could help increase the level of discourse. It’s very easy to attribute a bias to someone else because, for example, they own Bitcoin. So of course they’re going to be pro-Bitcoin. Or this person works for a Bitcoin company. So of course they’re going to make this pro-Bitcoin argument, so it’s not worth reading. And then, on the flip side, our own biases are often transparent to us in the sense that we don’t see them. We are kind of fundamentally blind to the biases that affect our own belief systems. And so I think being honest with ourselves about our potential biases, whichever side we’re on, can help us have more productive conversations.

Resources

Resistance Money An archive of insightful articles about Bitcoin from Craig’s research collective.

Bitcoin is Magic by David Morris An excellent primer for anyone who’s just starting to learn more about Bitcoin and other digital assets.

Useful Delusions: The Power and Paradox of the Self-Deceiving Brain by Shankar Vedantam and Bill Mesler This book about how the stories we tell ourselves can affect us in both positive and negative ways ties into our discussion about what money really means to people.

Knowing Our Limits by Nathan Ballantyne Craig recommends this book for anyone who wants to learn more about epistemology, which is the philosophical study of knowledge.