Mailbag featuring Bag and Kram
Get a cup of coffee, block off 30 minutes, and dive in. Happy Monday.
Before you start reading, let me preface this piece with this: I began editing and formatting and then realized the best format was in its raw nature. Yeah, it might be all over the place, yeah our ideas are weird, but I think you guys will like it.
It started with an email I sent to Kram about 10 days ago asking him a few things about a podcast on Bitcoin and morphed into something pretty entertaining. Below we discuss the Bitcoin halving, Satoshi Nakamoto’s identity, kidneys, the U.S. monetary foundation, Taylor Swift’s new album, the importance of reading and writing, habits, my fear of technology, and much more… hope you guys enjoy.
Dear Kram,
I had an idea while I was listening to a podcast on Bitcoin yesterday…
I’m in a writing slump right now and can’t seem to find anything that I’m excited to write about. So I figured I’d steal a play out of our guy Bill Simmons’ playbook.
I had a couple of questions regarding a few things and then thought about posing them in a new Thoth format. Simmons did this back in the day with a few people where he’d go back and forth (Gladwell, Cuban, and he did a draft one too, I think) discussing a topic. I always found them entertaining. Listening to Simmons and Cuban bicker about empty stadiums and bad contracts tickled me.
I think they were called “mailbox” or something... I’m sure if I’ve read it then you probably have.
So, here are my three questions for you regarding BTC that I had after listening to that podcast:
1. What does the Bitcoin halving do to the price? Has it fluctuated historically when it halves or has it typically gone one way?
2. Why does BTC need to halve? If there are only 21 million out there, and we know that, why can’t they all be released? What is the purpose of holding onto the last few of them to be distributed?
3. What is your conspiracy theory regarding Satoshi? One person? A group? Give me your best comparison to Satoshi.
Ideally we’d go back and forth a handful of times, but if you aren’t interested then just tell me to get lost. But I thought it could be a fun idea.
Currently diving into the saddest Taylor Swift album in history for round 2.
DM
I'm going to answer questions 1 and 2 together and answer them out of order. Then will move to 3.
2a) Why does BTC need to halve?
The "halving" represents a unique rule of Bitcoin's core protocol.
To simplify a complex topic, let's just say that Bitcoin operates according to three distribution rules:
- A maximum limit of 21 million BTC will ever be created.
- BTC is generated, or "mined," approximately every 10 minutes.
- Every four years, the issuance rate of BTC undergoes a halving.
So, when Bitcoin was invented in 2008, 50 BTC were issued every 10 minutes. Subsequently, in 2012, this figure halved to 25 BTC. Presently, as of 4/20/2024, 3.125 BTC are mined within the same timeframe. By 2028, this number will further decrease to 1.625 BTC.
The necessity for these halving events arises from the inherent rules governing the Bitcoin network -- which is designed to be maximally secure, minimally inflationary, and unchanging. The halving happens because, well, that's what the code says to do.
This is really cool because it means Bitcoin is never surprising.
Unlike traditional gold mining and/or monetary control which rely on natural occurrences and chance, or political decisions, the issuance of BTC adheres to a predetermined schedule dictated by the Bitcoin network itself (which is essentially just a few lines of code).
In other words, Bitcoin's monetary policy is autonomously executed by the network itself, independent of human intervention or centralized control. It's pretty much robot money.
2b) If there are only 21 million out there, and we know that, why can’t they all be released?
So this goes back to Bitcoin the network and BTC the asset.
BTC the asset is used to reward the miners that run the Bitcoin code and secure the network.
The reason the 21 million BTC are distributed over a long time is so that miners are continually incentivized to run the Bitcoin code. This is part of the "game theory" that makes Bitcoin such a beautiful system, in my opinion.
If all BTC was released in 2008, then there would be no long-term health to the system. By spacing out the release of BTC over hundreds of years, the network is attempting to create a sustained incentive structure that supports its continued operation and security.
2c) What is the purpose of holding onto the last few of them to be distributed?
"Holding" BTC is a bet on the network itself.
You hold BTC the asset because you think Bitcoin is cool and that miners will continue to be decentralized and that the 21 million hard cap will remain and that money will still be necessary to transact as the world goes to space or is ruled by AI overlords.
Really, there is no reason to hold BTC if you don't know about Bitcoin the network. And if you want to learn about Bitcoin and how it works, you can read about it in a 9 page whitepaper, which outlines the main rules baked into Bitcoin's source code.
If you read that and like the game theory, then sell a kidney and buy more BTC and never sell it.
1a) What does the Bitcoin halving do to the price?
To be completely frank, the price of BTC is the aspect of Bitcoin I find the least interesting.
That said, a "halving" event is one of the few moments that will get Kram to tell a friend to buy BTC without any hesitation.
This is because the "halving" has historically led to absolutely ridiculous price performance.
2012 Halving:
Price at time of halving: $13
Following year’s peak: $1,152
2016 Halving:
Price at time of halving: $664
Following year’s peak: $17,760
2020 Halving:
Price at time of halving: $9,734
Following year’s peak: $67,549
2024 Halving
Price at time of halving: $61,523
Following year's peak: ???????
I'll let history speak for itself here.
1b) Has it fluctuated historically when it halves or has it typically gone one way?
Yes, there is so much fluctuation that it has scared away many the financial advisor over the years.
With great price increase, comes great price decrease. Crypto and Bitcoin is a speculative place and with the speculation comes massive waves of price increase/decrease.
If you are just about BTC for the speculation, I guarantee you likely will hate the experience because a 20% price decrease in 6 hours happens roughly 8-10 times between halving events.
However, if you read the whitepaper and have conviction, a 20% price decrease in 6 hours won't hurt you because you will understand the game theory behind what's happening.
3a) What is your conspiracy theory regarding Satoshi? One person? A group?
I think it's Hal Finney.
Hal had a significant track record of involvement in significant e-money projects pre-Bitcoin. When you look at the complexity of Bitcoin's underlying cryptographic protocols, it's clear that whoever Satoshi was, they had been thinking about the "internet money" problem for a long time, which Hal was tinkering with starting in the early 90s.
The most obvious sign of Hal being Satoshi is the early mining activity.
Finney was the first to start mining Bitcoin, he received the very first Bitcoin transaction from Satoshi Nakamoto himself, and was super active in early forums -- responding to Satoshi quite often regarding core code changes.
Add to that the fact that Finney was based in California, the same region where Satoshi's initial forum posts originated, and there's a compelling case that Hal was using "Satoshi" to obfuscate his identity.
Satoshi Nakamoto vanished in 2011. Around that same time, Hal Finney, who some speculate could be Satoshi himself, was diagnosed with ALS which eventually led to Hal's passing in 2014. However, between 2011 and 2014, Hal came back to the idea of Bitcoin core development super hard, after leaving the forums/development circles in 2009.
The timing of Satoshi leaving, Hal coming back to core development, and then Satoshi never being found, moving the early BTC he mined, etc., is something I find very suspicious.
Tho, in total honesty, it could have just been the CIA.
3b) Give me your best comparison to Satoshi.
The closest person to Satoshi is probably Alexander Hamilton (whose work in seeding US banking practice led to dollar dominance).
--
MM 11
Interesting…
Halving/Evolution/Satoshi
It seems so obvious after you explained it. Still, the idea of BTC halving is to motivate its users to continue mining and maintain its relevance to the public. My initial question would essentially be asking the US government why they didn’t just print all of the fiat in the 1860s.
And that gets to a broader topic… maybe they should have done that? Yeah, inflation. I get it. But aren’t all things built to eventually be replaced? So many things are built with the assumption that they’ll work forever. And reality/history says otherwise. In a hundred years people are probably going to be laughing at how dated BTC is. And that’s fine, we’re supposed to outgrow things/ideas. Why can’t financial systems be a snapshot of where we are in history? So many things are. I’ve found this argument relevant when looking at golf course design. Many of the famous, prestigious old golf courses can’t hold tournaments anymore because they aren’t long enough. But that’s okay. Those golf courses were built in the late 1800s, they aren’t supposed to remain on top for that long. But people lose their minds because athletes are evolving and outgrowing these dated places. Maybe that’s a bad way to look at things, but I think ideas are supposed to be built upon each other. And the victims will be historical institutions. Whether that be a golf course, bank, or company. Is that a ridiculous theory?
I laughed out loud at the halving prices and then the peak prices after. You tend to overuse the “sell a kidney” theme, but you might be onto something. Those numbers are staggering. But for me personally, I just kinda like my kidney.
I’m slightly disappointed by the definitive nature of your answer about Satoshi. I was expecting you to come up with a name that wasn’t as simple as Googling “Who is most likely Satoshi Nakamoto?” Plus he’s dead which makes that theory so incredibly boring… It's like discussing whether OJ did it, or if the Immaculate Reception touched the ground — with Franco and the Juice dead and gone, the dialogue isn’t as entertaining. By the way, if you had to come up with a single reason as to why Twitter was invented my first answer would be to handle situations like OJ Simpson dying — truly apex mountain shit.
Hamilton is way too easy of a comparison. That has shades of comparing Jaden Daniels to Lamar Jackson… black running quarterbacks? C’mon, at least go cross-industry for me. If I ask for a comparison to Elon Musk are you gonna give me Steve Jobs?
I’ll give you this: his monetary contribution closely resembles Hamilton's, both pioneered a currency in America. I’d argue that Satoshi is more impressive. Of course, you have to give credit to Hamilton because he came up with so many things we take for granted now. And did so out of thin air, in my opinion, way more challenging. But Satoshi came up with something that provides a (somewhat) worthy adversary to the dollar, that’s a major point in my book. His anonymity reminds me of the Unabomber. Maybe it’s my weird fascination with stories like Ted Kaczynski, but there is something unsavory about this Satoshi fella. He can’t just be a Robin Hood (no pun intended) figure trying to right the wrongs of the financial system, it can’t be that simple. There are definitely some dead bodies lying around, but he probably didn’t mail bombs to people so maybe that’s an unfair comparison. But his incognito nature doesn’t sit well with me. Who is this guy? And his humility reminds me of the opposite of someone. Any guesses? Well, that’s a pretty broad question. We have a lot of boastful rich people. His humility is the inverse of the Winklevoss twins. The ultimate #lookatme guys… if you guys were the inventors of Facebook, you’d have invented Facebook. Shades of Hamilton, Kaczynski, and the (Winklevoss)^-1 twins, now that’s a comp.
There was one more name in the podcast that I need to do a lot more research on: Ross Ulbricht. I didn’t know anything about him and certainly didn’t know he was a Westlake HS graduate. How important was he to BTC growing into what it is today? Is that a stain or an extremely necessary figure to help get it off the ground? And what the hell did he do to get a life sentence? I’m ready for a movie to come out, and how on Earth do you not have a Silk Road shirt?
Two questions before I go, in case I didn’t give you enough to respond to:
1. What’s your favorite song on TTPD?
2. What are your two most important habits?
DM
Much to respond and I'm a little delirious at 11:30 pm on a Thursday night in Vancouver. I just got back from the office. Got hit with an absolute FLOW state starting around 5 pm from a writing perspective and just had to keep typing with it until my fingers stopped working.
Anywho.
Satoshi
You made fun of my Hal Finney call by saying it's basic. Let me tell you -- I came to that conclusion after many years of weird internet searches, forum readings, and conversations with people who were around in 2011-2015 in the Bitcoin space (chicks dig it when I mention that). For a long time, I thought it was a CIA thing, which makes sense because BTC is essentially a long term play to create money that operates on a public ledger. In other words, you could make the case that Bitcoin is the perfect tool toy for authorities to track and censor citizens. I also had a bit of time thinking of Satoshi as Elon. The man started his career at PayPal, has been thinking about X for a long time (not Twitter "X" but the idea of "X" as a universal app for social and finance). He also has famously purchased BTC for himself, Tesla, and SpaceX. I don't know. There is something there. but Elon pulling off such a ploy seems just too wild to be true, especially given that 2008 is years after his programming skills were put to use (though typing that out makes me laugh, as Elon is so obviously a polymath).
Adam Back is also someone with Satoshi vibes, but he is so close to the Bitcoin community that I doubt it's him. He has an absolute unit of a brain though and has been messing around with internet money concepts since the early 90s. The one person Satoshi certainly isn't is Craig Wright. Won't give him the time of day (shoutout mainstream media for never getting anything right about crypto).
As for your comments on Satoshi being sketchy, I disagree. Unabomber vibes are not the case here. Satoshi's abrupt departure and complete disappearance should be regarded with awe. Someone out there created an entire new asset class, a $1 trillion commodity, profited very little, and absconded with nary a clap on the back. I mean not to get sacrilegious, but Bitcoin essentially had a virgin birth into the world -- no father, just an idea and a passionate community lol.
To give a cross-industry comparison, I would say that Satoshi will go down like Homer… A name that exists forever, but has no real person behind it. Homer is the name behind the Odyssian and Illydiac myth, but nobody can really say who Homer was. He is a myth, an amalgamation of writers who penned the epic about the woman who launched 1,000 ships and wrote about the man who crossed the stormy seas, and faced down Circe, only to come home to a glut of suitors to kill. Satoshi is the man behind Bitcoin, the man who inspired Vitalik to launch Ethereum -- he is the backbone for an entire industry of open finance, of new financial primitives, of new ways to move value across the world, with nary a third party that can stop you from doing so. As time passes, I think Satoshi will end up just as mythological as Homer and I think that's cool.
Evolution of $$
On the US government and its monetary policy, I think we need to give them a break. I am far more excited about the dominance of the US dollar than I was two years ago. Monetary policy is complex and is astutely lindy. There is so much inertia to the US dollar -- it is not going anywhere soon. We have a country full of energy, the most AI engineers in the world, a bunch of startups working on nuclear and space tech, our rivers run strong, our borders include miles of water and weak neighbors, and our military still claims the "world class" title. Yes, there does appear to be some sort of decline to US power if you look at the circus of US politics or stare at inflation numbers, etc. That said, I think we are exiting the depths of a particularly rough short period of turmoil in the states that started around 2014 and ran through 2022. I have a thesis that the world got fucked by the internet during this time -- election misinformation abounded on social feeds, the average person became enamored with their phones, the worst news spread quickly and loudly across mainstream media, covid forced us all inside, etc. In general, we got hit with a tidal wave of the internet and none of us humans were prepared for the inundation of bad ideas, polarization, racism, sexism, terrible news, and all that stuff that gets clicks on the internet. I can feel the world, however, normalizing in 2024. We are not so easily tricked, I think, in 2024. The world has seen things and we are recovering and I think in America we will get our shit together and have a great push over the next decade in a more normal way. I don't know. This is a bit of a ramble, yes. But there is a kernel of truth here I think, in the fact that we act like the internet is normal when in fact humans have only been able to be connected to each other for about 40 years. That's wild. Of course, there are going to be growing pains as we learn to co-exist and learn how the technology we use (the internet) disseminates information.
Kidneys
Goodness, I'm not sure about the order I'm answering your questions in nor of the coherence of this response, but we continue on to your comment about not selling your kidney for Bitcoin. I think you are being super dumb, to be honest. You are young and can fuck up immeasurably. If anything, your response should be something like "mark, i think i want to be even riskier. what other crypto asset should I be buying?" You are 23 my brother. There is an entirely new financial system being created. Literally, I take out loans, send friends money, earn yield on assets, and move money across borders on blockchains. Banks are a hindrance to my life. Not buying Bitcoin is so dumb it hurts. You are an internet child, buy the internet money, my guy. Good god, the world does not reinvent finance very often. When it does, you should pay attention and you should sell your kidney and the naming rights to your first born to leverage everything into a bet on the future. Putting money into a savings account is betting on the past. It is a bet on tradition. Fuck that shit. Nobody got rich on tradition, except for those already in power. You are not an aristocrat, so you have to take chances -- you have to do things that the system will tell you is bad. And that's ok -- because oftentimes the system is shaped by the wealthy men who want to stay wealthy, who want you to put your money where they tell you so they can earn more yield and you stay happy with your pittance. Don't be a tradition guy. Take risks. Maybe you fail. Maybe bitcoin is a scam and your brother is an idiot and the US dollar and savings bonds and social security will last forever! Maybe the internet will never be home to money. That's possible! It is! But I don't think it's likely so, goddammit, sell your kidney, buy bitcoin, and don't look at it for a decade. I think odds are you will be ok. And , even better, ask me what other crypto assets to buy because there is just so much free money in this world if you just read a whitepaper or three.
On Ross Ulbricht, I just have to say this: read Digital Gold, by Nathaniel Popper. It's a fascinating story of drugs and riches and police seizures. Knowing you, I think Digital Gold will hook you. Ross' story is insane -- maybe more insane than that of Satoshi's. And I do have a Ross U. shirt. You just don't get the reference, son.
Alright, I feel myself losing steam. Let's get to your questions at the end.
What’s your favorite song on TTPD?
The Black Dog tickles my fancy. But I have to say, Robin kinda hits.
That said, the song is obviously "I Hate It Here" because I am a poet stuck inside a crypto guy's body. That line hits loll .
Honestly, I rank this album as 4th best. Lover, Folklore, 1989, TTPD.
What are your two most important habits?
1. I document what I consume. I have a list of all the books I read. I keep a list of my favorite articles dated to when I read them. I make my own playlists and I give them names and dates. I watch movies and I write them down and I rank them and I think about them. I write Yelp reviews of restaurants I like.
I think one of the shames of modern society is how much content there is to consume and how little talk about it! I noticed this a few years back. I read and read and read and read. Reading is probably my number one hobby -- but I never, and I mean never, spoke about it to anyone. I'm not sure why, just happened.
My realization here is that I was doing myself a disservice. Reading for reading's sake is good! But reading for insight and thinking and conversation is better. Consuming to consume is a practice of gathering potential energy, but if there is never a kinetic release of activity -- of conversation or creation -- then what is the point? Consumption is meant to shape a person and induce change, in my opinion, and passive consumption is essentially man's greatest sin: the waste of time for no good outside of resting the mind and body. And yes, yes, resting the body and mind is good sometimes, but only rarely and after great deeds. In most cases, passive consumption is choosing death in the form of TV. This is awful and not what I want my existence to be about.
This is why I document what I consume. This forces me to USE the things I read and watch and consume in other aspects of my life.
For example, this documentation allows me to become a curator for friends. If I send you a link or a poem or an article or a book, this is me saying "i love you so much that i am giving you this slice of my life because it reminded me of you." It also makes me more active in conversation. When I bring up a fact I read in a book or an article, it is me drawing upon stored knowledge, making time wasted in pleasure (reading an article about shai gilgeous alexander) into something positive (a witty remark about true shooting percentage).
If I find myself not having things to send to friends or not being lively in conversation, then it is a great time to check myself and think: what am I consuming? Am I being active in my consumption, ingesting new ideas, fun topics, art that makes me get goosebumps? Or am I going home and watching a rerun or mindlessly scrolling through an algorithm made to stupify my brain with things I already agree with? Because if it's the latter, then it's time to feel something -- to go create something or to find a new medium for consumption that makes the potential energy locked inside my soul blossom into kinetic action, into life. I don't know, that's probably too many uses of potential/kinetic for a single little essay and I can find myself waxing poetic but I find this to be such an important habit now that I'm writing about it!
What you consume is who you are from a media standpoint -- far more than what you do or who you hang out with. Maybe in generations past the environment you were in from a phyiscal standpoint made a huge difference. But, now, in the era of internet and digital presences, I think documenting the media and algos you interact with and checking that you continually challenge yourself to feel something and use what you ingest in real life is critical to living a fulfilling life.
2. I honestly don't have many habits. I work out as a habit, but change my routine often, switching from running to lifting to yoga to steam room to sprinting based on what part of my body hurts that day (it changes a lot, much broken, lol). I don't drink on the weekdays as a habit and I limit myself to only two cups of coffee. I set up calls with friends who are hard to talk to because I think keeping deep friendships with awesome people is something that should be prioritized almost as much as family.
But I guess my most important habit, the one that defines much of who I am, is that I write so much and I write every day and I write about everything. I force myself to logic out a lot of stuff through writing. It's a habit that has forced me to become someone who thinks often, who formats ideas, and looks at concepts from every type of angle. To be honest, I do not think I am a beautiful writer, nor a rather great writer. I would say I am a decent writer lacking precision in words, who has not yet learned how to be succinct, and that's ok. My sentences flow and my essays stack, but the core concepts I try to get across do not quite hammer home yet. Neither am I a flowery writer, nor descriptive. You will not find me using analogies well.
That said, despite the rather mediocre writing, the habit has forced me to think about problems from many angles. The habit of writing has taught me that what is claimed on the surface and stated as fact in a sentence, rarely holds up in an essay. Ideas and opinions are hard to distill and writing has led me to reconsider so many opinions of my own -- it has forced me to navigate complex emotions and re-jigger concepts into new mental models that are the antithesis of where I started an essay.
I also think getting into a habit of writing enforces clarity of thought into my mind, which is a haphazard place. Sitting down to write Thoth, for example, has been a lovely experience over the last three years, a habitually reorenting of opinion, a place to shelve the ideas floating around my mind into concrete thoughts that live forever, that I can refer to, and judge.
And, let's be honest, the habit of writing has been great for me professionally! My job, my jobs, over the last few years have always been multi-faceted, but writing has been a mainstay. Being able to explain a complex topic in a somewhat simple way is a hard skill to find and I have been lucky enough to get opportunities to do that at four different companies now, starting with writing newsletters at Unchained and now writing the Research material at LZ. Some of the most joy I have gotten from work is from getting feedback on a piece from a stranger or from completing a piece that was dastardly difficult to distill into less than 5,000 words.
Gah, ok, I've been writing this for over an hour now. I've become a slow writer in my old age, I guess.
Time for me to log off. Feel free to shoot me a few thots.
-- Kram
Man, a lot of directions to go based on that response.
1. Hal/Satoshi/BTC
I’m glad I could get you to think harder about your Satoshi comp… I knew that you wouldn’t be able to handle any of our readers even considering that Satoshi might bear a resemblance to the Kaczynski in any way. I love the comparison to Homer — because that is my view of Satoshi — a legendary, mythical figure. I am just fascinated by Satoshi. I was about 70 pages into Digital Gold before you wrote this email, so I naturally want to know what someone much closer to this topic thinks about it. It’s so difficult for me to comprehend how someone could create Bitcoin and then disappear completely. Especially in the world we live in, it seems unfathomable. Here’s a question, and let’s preface it with the assumption that Satoshi is Hal Finney… do you think he would be happy with where BTC is right now? From what I’ve read, BTC is a blueprint that Satoshi outlined but depended on others to further/better it. Do you think it has been bettered? And do you think he would be happy with the dialogue that goes along with it? Only focused on the price compared to the US dollar and treated as a stock, at least that’s my perception of what most think of it. And an acceptable answer could also be: finish reading DG.
2. Technology/internet/addiction
On your claim that we went through a funk between the years 2014 and 2022: I’d argue that we are still in it. I think the internet is still fucking us. And maybe it’s not the internet itself, but the over-reliance on technology. I don’t think we have ever lived in an era where the general public has been more blindly obedient or less inquisitive. I feel like I meet very few people that come across as deep thinkers. Maybe that’s an overly simplified view of what is going on in the world, but I think we are trending in a terrible direction.
The internet is a valuable tool, but only if used the correct way, otherwise it can become truly terrible. And that’s why I said that we’re still in a funk. I think so much of the content being offered is terrible… Instagram, Snapchat, or bingeing TV shows… that is what is socially acceptable (and expected) when it comes to content consumption. it lacks any intellectual nature and is used more as a medium to make the day go by a bit quicker. What I’ve seen (and experienced) is that the internet is a time vacuum, sucking in hours at a time. The best comparison I can give is the Lotus Hotel in Percy Jackson. Before you know it, the day is over. It’s scary. The mindless scrolling, the numbness to it, it’s dystopian. I’ve thought about this so much recently.
I came to realize it while riding an elevator. I have to ride up and down every day as my apartment is on the 6th floor of my building and over the last few months I noticed something: people can’t live without their phones. I normally position myself at the back of the elevator to get a good look at what the average person does on their 18-second ride and it was pretty sad.
Here’s how it typically goes: instinctively selecting one of the 3 apps they’re addicted to, scrolling back and forth briefly, and then closing the app to click on the next one to do the same thing for a few moments. It’s an unconscious decision. Unresponsive. It makes me sad.
And I think that’s the reality with a lot of people — they’re fine with it, but only because they don’t think about it. And I’ve certainly noticed that with some of my younger teammates on the golf team who went to high school post-COVID… the internet/social media is their life. Maybe that’s the reality of what our world is going to turn into for the foreseeable future… headphones in, uber eats ordered (left on the doorstep), ignoring everyone besides the very few closest to us.
3. Habits/Reading/Writing
I love your reading and writing emphasis. What I learned from that last email is that you are not much of a habit guy, but instead more of a principled guy. Orientating your life around specific concepts rather than checking a box on a mundane task like whether you made your bed or not. I like that. Reading and writing are daunting tasks at first, but like most things, all it takes is to take the first step and then you’re doing it! I have taken your reading advice, combining 3-4 books at a time, it is a great idea. I’m stuck on a 700-page killer about Rockefeller and it’s nice to flip back to Digital Gold or read a few pages about the dysfunctional 1990 Chicago Bulls. Anyway, all it takes is a little bit of discipline, at least that’s been my experience. I’m convinced that discipline is the most important character trait one can have but that’s another Thoth.
Changing tones…
4. You said I need to be asking you for more advice about interesting cryptocurrencies...
What is the crypto-company that you are most excited about right now that most casuals wouldn’t know about, and why?
5. Mother
I think I would probably compare your Taylor Swift takes to those of Kendrick Perkins discussing the NBA — intentionally polarizing, bad, and flat-out embarrassing. Having this album as your fourth favorite of hers is criminal. Just so we’re clear, you have this ranked ahead of Fearless, Red, and Reputation. If this were Logan Roy writing this email response he would say this: you’re not a serious person. AND you have Lover ranked first! Who are you? TTPD is an album that will forever be linked to the context surrounding the album. Years from now we might enjoy the music she released but it was the timing of it all. We’ve heard this sound before. We know what a Taylor Swift, Jack Antonoff, and Aaron Dessner album sounds like. And that matters. It’s time to reinvent. This is going to be like looking back on James Harden’s 2018-19 season. Yeah, the volume was impressive, there were some good nights… but it wasn’t his peak. Simply put: YOU HAD TO BE THERE. It would be silly to deny that I didn’t like TTPD at all, but it’s the repetition that has left me (and a lot of her fans) disappointed.
Regarding your favorite songs… The Black Dog is iconic. I love pettiness the of and I hope it’s shitty in the Black Dog... such a fantastic line. Do I need to get into your take that I Hate It Here is one of your favorites? Kram, come on. I don’t know if this is your attempt to get me riled up on a Friday morning or if you’re genuinely trolling me but this ain’t it. She claims to have wanted to live in the 1830s but without the racists or arranged marriages. I get the sentiment of not liking where we’re at as a society, but what was so great about the 1830s?!?! Was she fascinated by the Industrial Revolution? Or maybe she wanted to live during the Cholera epidemic? Or maybe she was just a huge fan of Andrew Jackson, what a good guy he was. My point: that whole song is ruined by that extremely cringy line… Here are two other lines she might’ve written down that didn’t quite make the cut:
1. The 1940s without the mass genocide and communism
2. The 2000s without the terrorist attacks and financial problems
I don’t know what she was thinking with that one.
Okay, that should be enough to respond to… our readers should have quite a bit of #content to read after you finish up.
DM
This newsletter has turned into a biopic of brotherhood. I would say anyone who reads this will have information asymmetry on who we are and what we are about in ways that I am not particularly excited about. Alas, that is the price one pays for writing in public (or on the internet) -- privacy traded for grandeur, or, perhaps, personal mystery given up for macro intimacy. Writing is the closest I can get to crystallizing my sense of personhood into a tangible element. Giving that out to the world for free is quite scary, especially when transcribing opinions and such like in this little back and forth. What do I gain in this transaction? In this bearing naked of thought in exchange for eyeballs on words krammatically arranged? I could argue that I write for myself and the publication to other individuals is just to keep me accountable in my habit of writing. But such an excuse rings untrue. The truth is likely found much deeper, in dopamine releases and fear and self-aggrandizement and humility, all twisted together, driving creation, warning against publication: a risk curve that must be traversed until I satisfactorily find the point where the supply of my writing meets the demand from the world, where marginal return of pressing send across any platform is perfectly matched to what other human beings crave. Isn't that oh so pedantic? So self-centered. But that is the truth, I think, maybe. Who knows. Perhaps I've just had too many coffees on this Sunday afternoon in Vancouver.
As for the rest of your email, let me respond to a few things.
1. "Here’s a question, and let’s preface it with the assumption that Satoshi is Hal Finney… do you think he would be happy with where BTC is right now? From what I’ve read, BTC is a blueprint that Satoshi outlined but depended on others to further/better it. Do you think it has been bettered? And do you think he would be happy with the dialogue that goes along with it? Only focused on the price compared to the US dollar and treated as a stock, at least that’s my perception of what most think of it."
Great question. I am far from qualified to comment here.
My gut reaction is to say, yes. Satoshi and/or Hal would be happy with where BTC is. I would recommend going back into the old Bitcoin forums, command + F "Hal" and reading all of his comments. These forums are the primary sources for how Bitcoin was changed after the genesis block till about 2017, when Bitcoin blew up to a size that outgrew forum conversations. And if you are not going to do that, just look up on google "satoshi quotes" or "hal finney forum posts" and read the articles that pop up.
Of course, I'm neurotic so I'll save you a bit of time and highlight a few quotes from Hal below. Note that all of these quotes happened between 2009 and 2011. Hal was always in favor of BTC being a high-priced asset, as a high value BTC is good for the health of the bitcoin the network, which relies on compute power to make sure it is unhackable.
"Bitcoin has a couple of things going for it: One is that it is distributed, with no single point of failure, no ‘mint’, no company with offices hat can be subpoenaed and arrested and shut down."
"Since we’re all rich with bitcoins, or we will be once they’re worth a million dollars like everyone expects, we ought to put some of this unearned wealth to good use."
"It’s pretty strange really that we all see a good chance that bitcoins will hit a dollar in the relatively near future. How many investments can be expected to triple in value in that time frame? Is gold going to be $3500 any time soon? Apple stock going to triple? Maybe Facebook, if you could get some. That seems like a pretty sure thing. We are really lucky to be in at the beginning of a possibly explosive new phenomenon. Considering the odds against most money-tripling investments, Bitcoin looks like a good place for a percentage of your portfolio."
"Ultimately it’s good for the network for mining to be expensive. It makes it that much harder for a well financed attacker to dominate the network."
"For Bitcoin to succeed and become secure, bitcoins must become vastly more expensive."
Something to note here is that Hal was a fan of BTC being expensive for the sake of the network, not for the sake of BTC holders. This is a huge discrepancy in how many people think about Bitcoin. It's one of the problems I have in talking to people about BTC -- I view the price of BTC as the key to the game theory that leads to network security. The asset BTC, if you read the whitepaper, is genuinely programmed to get more expensive as the network grows and becomes more popular. $1m per BTC is honestly, if you believe in the game theory of bitcoin network game theory, a boring side effect. It is going to happen because that is how it works.
I think, however, he would be pretty sad in the conversations around BTC these days, which are always focused on the price but rarely on the network. BTC is often described as "digital gold" and nothing more, which, to me, is nowhere near nuanced enough. The conversation should be about how Bitcoin the network is the most distributed system of computers in the world. The conversation should be about how the Bitcoin network allows for finance to happen at scale without banks, bankers, or governments. The conversation should be about how the Bitcoin network cannot be shut down by anyone. In my opinion, talking about BTC instead of the Bitcoin network is like talking about how great the dollar is without explaining what the US government is. It's silly and I don't like it and I don't think Hal would either.
But that's ok. I think part of Bitcoin's growth is moving away from the nerds who like to talk about game theory and nodes and decentralization and moving into the real world, where nuance is lost for the sake of mass adoption. This is where things like Coinbase IPOing and BlackRock ETFing are great -- they bring a mass audience to BTC the asset. Perhaps as more people interact with the asset they will begin to look into what is happening behind the scenes, which is where the cool stuff happens -- permissionless value transfer, self-custody, near-instant transactions, etc.
2. There is a beautiful and melancholic word I like called anemoia. It means nostalgia for a time or a place one has never known.
I think you are pining for a world that never existed. Before phones, the world was not perfect, people did not necessarily automatically connect in real life. You are just assuming they did. The land of the lotus has always existed -- I'm sure before phones humans found ways to unplug and disassociate from the world via books or TV or drugs or tomes or pamphlets or newspapers, etc.
Overall, the internet is not a bad thing. It is a neutral technology that we are learning to live with.
Now, the applications built on top of the internet are good and bad -- we know this. Social media apps seem to be leaning bad, trading truth for clicks and the potential to bring people closer together for algorithms that make people so angry that they stay scrolling. I think we might look back at 2014-2022 as a period of drug addiction at the scale of the human race. But I think we are going to figure out guardrails for the internet -- how to leverage it and maximize it -- to create places to genuinely connect rather than congregate in anger.
As someone who works at an internet money company, I am always going to be optimistic about the future of digital spaces. There are tons of people working on this problem. My favorite company at the moment is called Sublime -- it is a bit like Tumblr: a place on the internet with round edges that contains hard truths. It is built on the idea that the internet needs to be shaped like cities. Great thought needs to go into building out digital spaces -- much like how much urban planning goes into the construction of a park in the city, much UI design needs to go into how a social media app creates a posting interface. These are the same things -- we just tend to treat the digital version as less important, which is wild because more people will use public places on the internet than the physical locations in the real world.
That said, I feel what you feel. The emptiness that comes with a digital existence. The headphones, the scrolling, the need for dopamine hits. It is not healthy. I can feel doomerism clutching at me when I'm on my instagram explore feed. I never feel worse than when my phone tells me my screen time is up 20% compared to normal. Forcing myself off screens and into the real world is part of those disciplined habits we've talked about above. It has to be done -- getting coffee with friends, working out without a phone, saying hello to someone in the elevator, walking to grab your dinner instead of uber eatsing something gross. These are all small, micro, important things to do -- and important things to have conversations with friends about doing. We need to challenge each other, us children of the internet, to not allow the digital world overtake our real world.
I could write about this for hours. But I think I'll stop here with a paragraph about the beauty of the internet. I live in a world where my friends are distributed like Bitcoin nodes. And the internet lets me keep up with them and I love that. In another life, maybe one just 50 years ago, I would not be able to be friends with a guy in India or a guy in Italy or a friend in Tenessee or a family in Texas when I am in Canada. Instead, I can, and I can maintain those relationships quite easily. And then let's talk about information. I have the whole world at my fingertips. I can learn anything fast and use that information to make decisions. The information density of a phone is amazing and you are underrating how much better and more efficient our lives are than generation's past. Not only that, but I live a more curated life than anyone else -- the music, shows, books, communities, etc that fit my tastes are so much easier to find. There is no need to feel like an outlier in 2024, as any and all ideas and people are just a few clicks away. I think in a different life, I might be inundated with lonliness -- but not in 2024. In 2024, if I use the internet correctly, I am always two clicks away from something that makes me smile.
It is, however, so hard to use the internet correctly. A feeling quite encapsulated by the quote below:
3. Read more books. Maximize. Read 5-10 books. Not because you like to read, but so you can make fun of more people for their bad taste.
But be sure to not finish the books that suck and then tell people about why they suck. So many times people only recommend books that are good. Recommend people to skip books that suck. Like Atomic Habits. And anything by Mark Twain. And the Hunger Games. People should be warned when books are terrible.
And make fun of people when they try to brag about reading books that suck. "Oh, you read Sapiens? I think you are dumb." "Oh congrats on reading Thinking Fast and Slow. My cousin in 6th grade finished that in a day." "Wow, you read Rich Dad Poor Dad. I bet you invested in silver, you silly fuck." "Atomic Habits! What a shitty book. I'm never talking to you again because you are an incredibly boring person." Be sure to be as condescending as possible. Drop an esoteric reference to a book that is obviously more intelligent than what they are bragging about. Something like "oh congrats on reading Issacson's Elon profile. Quick read, fun! Have you read Chernow's Hamilton biopic? Massive, took me months when I was in high school."
Book shaming is why you should be reading. That feeling of being better than someone else -- that's what you turn pages for. Don't get it twisted. Reading is not for pleasure or self-edification or improving oneself... it is only good for distancing yourself from the sheep, the non-readers, the fake readers, the masses. Never forget that.
4. What is the crypto-company that you are most excited about right now that most casuals wouldn’t know about, and why?
I am stauchly anti-investment advice. As always, my recommendation for anyone getting into crypto is to take $100 and try to perform the following 5 activities:
-- buy ETH on an exchange
-- send ETH from exchange to a personal wallet
-- swap $20 of ETH into 20 USDC
-- buy an NFT with 10 USDC
-- take out a loan against 10 USDC
Once you do that, you should be ready to sell a kidney and won't need my investment advice because you will have tons of ideas on what is valuable and what isn't and what to buy. There is so much free money floating around in the crypto world, you just need to try it out once or twice and you'll get it.
But I've found most people are too lazy to try a new idea, I'll give out a company for you to look at. It is a company called MakerDAO, which has a token associated with it called MKR. MakerDAO issues dollars on blockchains, without relying on a bank. In reality, it is a bank that runs solely on smart contracts -- programmatically and autonomously. If Ethereum is the monetary rails of the future, MakerDAO is probably the first bank of the future. It is crypto the mint for dollar-pegged assets and it is opening up new business arms to extend its functionality to borrowing/lending, along with yield from t-bills. I think it's one of the more fascinating businesses in the world -- a fully functional bank with no employees and millions in revenue. For a deep dive on MakerDAO, I would recommend reading this beauty of an investment thesis.
5. Mother rebuttal
I rank albums based on whether I can listen to them on repeat while I work or write. TTPD is exactly the vibe I'm looking for. It floats beautifully in the background, pacing a day with a lilting voice and cutting lyrics.
On the other hand, you rank Taylor Swift albums like Bill Simmons does his MVP list. There is nuance that I cannot even begin to comprehend. I am solely a fan and a fan who likes to listen to full albums in the background while working. This is my criteria and I will not apologize. I am who I am and be who I be.
-- kram
Did reading while playing Beethoven’s ninth symphony.
Pop
Really enjoyed reading that piece!!!
Pop