Pushkin. If you spend any time reporting on the world of cryptocurrency in bitcoin, then you're going to run across the name Molly White. She's a software engineer who has this website with fonts that looked like a dot Matrix printer made them in nineteen ninety seven. The site has a sarcastic title that I just love. Quote web three is going just great and is definitely not an enormous grift that's pouring lighter fluid on our already smoldering planet.
End quote. All of that is her title. When I read that, though, I knew that for my next book, I needed to get Molly White on the phone. This is on background from Against the Rules. I'm Michael Lewis. Crypto has always had skeptics and critics, but Molly White is a researcher who really knows her stuff. She's consulted on federal legislation to regulate the industry, and she's an activist in small ways, such as persuading the Wikimedia Foundation
to stop collecting donations via cryptocurrency. All that, plus her outspokenness online has put her in the line of fire. And we'll get to that. Welcome Mollie. So all of this is in service of this book I'm writing about FTX and Sam Bankman Freed. And I assume you kind of followed the media coverage a bit because you're interested in the space. What do you make of the public response to it all?
I got very frustrated at one point, not too long ago, that a lot of the story seemed to be that Sam Bankman Freed was just a kid who got in over his head. That was a very prevailing narrative, which was really irritating to me as someone who is about the same age as Sam Bankman Freed and who you know, has a head on my shoulders. But you know, I have been happy to see that ftx's collapse did seem to precipitate a fair bit of skepticism in the crypto
industry that maybe hadn't been there before. You know, there had been a series of collapses in crypto since you know, the spring of twenty twenty two, but they were not as significant in size as ftx's collapse. And so I think that ftx's collapse really helped to drive home some of the skeptical narratives that were beginning to emerge in the media in the.
Very beginning, when bitcoin is created in what two thousand and eight, Maybe I can't remember.
That, Yeah, two thousand and eight or two thousand and nine, depending on how you define created.
And so so you encounter it, you get a sense of what it is. Most people who went through that process either became bitcoin fans, or like me, looked at it and said, I'm having no emotional reaction to this at all. You had an emotional reaction to it, like you start to get bothered by it.
Well, that came a lot later after I originally learned about bitcoin. I would say, first, my first reaction was largely disinterested, because I wasn't trying to buy drugs on the Silk Road, and I wasn't interested in all of the sort of mad financial speculation because I didn't have altogether that much money that I was going to be able to put into something like that, and so I thought, Okay,
that's cool. I hope they have fun over there, and then I went on and did my own thing until twenty twenty one or so, when it turned into something very different that was, you know, being marketed to every person who watched a football game or you know, read.
The news and what bothered you about that?
Well, I was annoyed at how it was being presented to people. The coverage, especially in late twenty twenty one, was enormously positive. It was all about, look at this person who at least a set of NFTs and now they can, you know, work as an artist like they always dreamed instead of having to have three jobs, you know. Or look at this person who made some wild bet on this you know, token that you've never heard of, and it went up ten thousand percent and now they
are driving Lamborghinis. It was a lot of stuff like that, and it was a lot of reprinting of press releases from crypto companies who are promising that this was not only some way to get wealthy, but it was the future of technology and the web and society. And while we were seeing that, we were also seeing actual real life evidence of people who were getting taken for a
ride by these same technologies. But it was not getting the kind of attention that you know, the feel good stories were getting, and so I felt like people were broadly being told that you should go invest in this, you should put your money into it, money that you cannot necessarily afford. To lose, which did not seem right to me understandably.
So what do you do then, Like, when do you set yourself up as a bitcoin critic?
Well, so I've been a Wikipedia editor since I was like thirteen years old.
All right, stop, how does that happen? How at the age of thirteen are you editing Wikipedia articles?
Well, it's the encyclopedia that anyone can edit, and I discovered that at about the age of thirteen.
But little kids are supposed to be using the cyclopedia, not writing it. Well, but I saw that you could, and I was what's the first Wikipedia article you edited at age thirteen?
I am pretty sure it was the article on unicycles, because at the time I was very interested in unicycles. I am kind of a person who attracts weird hobbies.
I would say, So, you were interested in unicycles and you edited the article an article on Wikipedia, and it's stuck, right, you were able to do and actually function is an editor.
Yeah, it's stuck for a while. I think it wasn't a very good edit by any stretch. But you know, there weren't all as many people sort of helping with quality control back then. You know, I started at thirteen, I sort of dabbled in it for a while, and then I became very active in it when I was in high school and have been basically ever since. And it's something I really care a lot about, and so my first instinct when I see something that I think is not being covered well is to go write the
Wikipedia article about it. And so the first thing I did was I wrote the Wikipedia article about the cryptocurrency blockchain web three, because at the time, it didn't really exist, and so I started researching it, and I realized that what it was describing itself as was very different from what it actually was in reality, and it seemed to me to be being used as a cover for all of this sort of fraud and scams and if nothing else, you know, major financial speculation that was very dependent on
the average person believing the story that was being told.
And so that was when I became really skeptical. Then from there I started my website, which is web three is going just great, because I realized that what I wanted to highlight was all of these projects that were failing and scamming people or falling apart and people were losing money, and Wikipedia just wasn't the place for that, and that was when I really started to also research the sort of technology, the ways that both financial systems
are working as well as the technological systems, and that's when I became even more critical and skeptical of cryptocurrencies in general, including bitcoin.
Did you receive any blowback?
Not initially, I think, because not that many people noticed what I was saying initially. But when I started the website and the website started to gain traction, I think people began at that point to sort of push back on what I was doing because, you know, to some extent, I think they saw it as a threat to their ideology to some extent.
Absolutely, And I'm wondering what kind of responses you've gotten from from the religion.
It's run the gamut to some extent. So a lot of it is you don't know what you're talking about, you don't understand the technology. Is very common. I get some people who are somewhat accepting of the stuff that I do, and they see it as a useful service as far as improving the technology, which I think is a very reasonable way to respond to criticism. I think
technology criticism is critical for technology development. And then I often get a lot of very hostile responses, especially from the bitcoiners that are extremely sort of ideological, and they can be very aggressive.
This is just an aside, But are those responses typically coming from men?
Uh? Yeah, pretty much experience.
Yeah, no, it is. I mean, it really is a male driven phenomenon, right, I mean that there are a lot of crypto bros. But there aren't a lot of crypto women.
Yeah. I run into them. They don't tend to be into bitcoin specifically. They're often in other parts of the ecosystem, and they don't tend to be quite as aggressive or cruel as as the men are.
So back to like you getting your mind around bitcoin and starting to criticize it, I wonder if you had the experience I've had where I mean I had people trying to get me to essentially endorse it, promote it all the rest from about I don't know twenty twelve, where people would say, coming, we're going to teach you about bitcoin, and each time they kind of had a different story about not what crypto was, but what its purpose was, like, what problem it would be solving, what
its place in the world was. It kept changing. It was like a solution in search of a problem, and you never found the problem.
That's all crypto is really is the narrative. And as long as they can find a narrative that is sufficiently compelling at any given point, then they can keep prices up. But it never actually fulfills those narratives, and so the narrative has to constantly shift.
Hold that thought, and when we get back from the break, we'll hear about the many narratives of bitcoin over the years, and back with blogger Molly White as we go through all the promises bitcoin enthusiasts have made over the years.
You know, the idea is that bitcoin was going to become the world's currency, was really popular at one point, and then people realize that, oh, it doesn't function as well as currency at all, and that's never going to work.
And why not just explain why it doesn't work well as a currency.
Well, when you have an extremely volatile asset, people don't want to just trade it around for you know, their rent or a hamburger. They want to hold on to it and hope that it goes up, or they want nothing to do with it because they're worried they're going
to lose money. And so you know, in order for something to function as a currency, it needs to be relatively stable, which is absolutely not Bitcoin or the other cryptocurrencies, aside from the dedicated stable coins, which often are also not stable.
But there's also a problem with its ability to just process transactions. If we're made to use bitcoin for all of our financial transactions, how long would it take to, like buy hamburger.
Yeah, it does have issues as far as the speed of the network, and there are a lot of sort of proposed fixes to that. You know, they're trying to sort of band aid on top of the problem that Bitcoin is a very slow network, but the the fixes often introduce even more problems of their own.
Right now, I can remember that was the first pitch, the twenty twelve pitch I got was it's going to be the world's currency. Like you can't trust central banks and you know they're always going to lean towards inflation, that the dollar in your pocket's not going to be worth as much tomorrow as it is today. And bitcoin doesn't have that problem. It's inherently deflationary, and that was going to cause people to want to use it as a means of exchange. Tell you a funny story. The
first call I got, I was so intrigued. They said, come down to Palo Alto and there's some crypto entrepreneurs here, and they were actually some people end up being pretty prominent in the movement. Many of them went on to be very rich. And they say, come down, we're going to introduce you to Satoshi. And that was like, really, are going to get to meet Satoshi. Satoshi wasn't there, but they were trying to explain to me yet.
I mean, maybe he was, maybe he was.
Maybe he was right. And when I got out of the car in Palo Alto, I parked about a block from the house they told me to go to I could smell the weed from a block away, and I got there. They're all smoking dope. They're all talking about how this is the future. And I said, like, I mean, I can't use to buy anything, and they said, you absolutely can. We have a coffee shop just downtown Palo
Atto that takes bitcoin. And so they put five dollars worth of bitcoin on my phone and we walked down to the coffee shop so they could show me how this was the money of the future. And I ordered a latte and fifteen minutes later, we're still trying to figure out how they're gonna do The coffee shop has said they'll take bitcoin, but like, nobody really knows how to do it. It's an unbelievable pain in the ass.
I remember thinking, if for some reason bitcoin was the original currency and someone invented fiat currency afterwards, everybody would be screaming, hallelujah. You know, it's like, it's so much better that then. So that was the first thing it was supposed to do, and you're you're absolutely right, it's the narrative. What was the second narrative When that narrative clearly was not flying anymore? What replaced it?
Yeah, there's also bitcoin as an inflation hedge, which you mentioned, the idea that you know that fiat currency is going to inflate into oblivion and so all of your dollars are going to be worthless, and so you should put them into bitcoin so that that doesn't happen.
The way you would put it into gold.
Correct. Yeah, Bitcoin as digital gold is a very common narrative. I also don't believe that has really held up. You typically don't want your inflation hedges to be enormously volatile in the way that bitcoin is. But you know, I think that generally speaking, it doesn't actually behave as an inflation hedge and the way that people would like it to. And I think a lot of people have started to acknowledge that bitcoin is not a great inflation hedge because it largely follows the market.
But you got to make gold itself is weird. The whole idea that people sort of arbitrarily pick a thing and say that's going to be the store of value against you know, it is going to be measured against inflation or measured against that. People are going to treat anything, put anything in this role. So to me, in a funny way, that's probably the best story they've told that it could. If everybody arbitrarily agreed that this was the new gold, there'd be some hope there because it is.
It does have this going for it. It's scarce, right, There's no risk that they're going to be some huge number of new bitcoin introduced that will inflate away the value of bitcoin.
Not practically no, I mean, there's nothing stopping the code from changing in that way, aside from you know, societal belief among bitcoiners. But I think that practically speaking, it never will.
Right, But there was a side argument similar to the gold argument. I wonder if you caught this narrative that it worked really well as an asset in a portfolio because it wasn't correlated with other assets.
Yeah, that's the common one too, is that it's you know, totally divorced from stocks or whatever it may be. But that has all they're not played out to be true. It you know, very closely followed a lot of other asset classes.
Yeah, no more more it moves with a Nasdaq, but more.
Extremely Yeah, just swings further.
Are there any other stories that sort of have been proposed and that either have fallen out of favor or that are still kind of floating around.
I mean, there's a lot of use cases that it's proposed for. So a lot of people will say that, you know, bitcoin is brilliant if you are you know, sending remittances, for example, is a common one. Ye, people aren't doing that. They could be, but they aren't right, and it's broadly because you know, it's it's not great
for that compared to a lot of other alternatives. I think one of the most compelling arguments that I've heard is the idea that bitcoin is a viable asset for people who are in really bad situations for whatever reason.
So you know, pick your scenario. It could be that they're living under an authoritarian regime, or they are in a country where the FIA currency is actually hyperinflating, and so people can use it, you know, as a sort of one time escape patch where they can flee the regime using bitcoin or whatever.
But it's but that's just a way to as a bridge. Bitcoin is a bridge to get.
The hell out and into something else, right, And I also think that it isn't scalable in the sense that if you know, an entire population started to try to flee a country using bitcoin, it would pretty quickly be stamped down on. You know, we've seen that with the Taliban for example, when people started to use it for
that purpose. But I also just think that the idea that like a bad solution is a better solution in a very bad situation does not actually make a very strong argument for that bad solution, right, Like, it's it's great that people are able to use it for the purposes that you know, they need to, but that doesn't actually mean that bitcoin is something that we should be broadly embracing, you know, for purposes outside of emergency situations, for example.
Right, it's been funny to me to watch even the dark use cases being undermined, like money laundering, like or put it more politely, Bitcoin's great because your transactions are entirely secret and no one will ever know what you did, where the money went, and where and where it's going to. That turns out not.
To be true, right, Yeah, that fell apart pretty quickly.
I would I would love you to you to explain why bitcoin's maybe not the best way to launder money.
So, anytime you send a bitcoin transaction, it's recorded on the Bitcoin ledger, which is immutable and goes back for the entire history of bitcoin, and it will never really go away. And so if you are trying to launder money or you know, transmit funds that are illicit, it's kind of the worst possible thing for that because, you know,
law enforcement they don't even need a warrant. They can just go look at the ledger and the only thing that's really keeping it private in any sense is that they aren't able to connect your bitcoin address to your personal identity, which is something that may have been true in the earlier days when it was easier to obtain bitcoin, you know, you could set up a computer in your basement and mind some bitcoin and no one would know
who had just done that. But that's not possible today, and so it's very difficult to obtain bitcoin anonymously and then to maintain that anonymity over and basically indefinite period of time, where if at any point it is connected to you, you are then connected to the crime. If I was a criminal, I don't think I would be choosing bitcoin personally for my money transmission.
Let's take a quick break. I'm back with researcher and critic Molly White, who's generously agreed to talk to me on background for my next book, All about the World of Cryptocurrency. I asked her how she explains things like crypto and blockchain to folks who know nothing about such things.
Like if they know what a database is, I'll usually say that it's just like a database that is stored among a large group of computers rather than the one single computer, and any activity that happens in that database is recorded permanently and publicly.
Which is why this is not a very good tool for illicit financial.
Activity, certainly not in my opinion.
For a storyteller, bitcoin is a like a wonderful case study in the power of story. If you can make it believable for a bit and you can replace one story with another story and people don't really notice that's what you've done. It's kind of wild how the thing has.
Sometimes in the same conversation. Actually, which I've noticed is like I'll be arguing with someone and I'll say something, you know, against what they've just said, and the argument will totally shift, even in sometimes in ways that totally contradict the earlier argument that they were making. It's very strange.
Do you find yourself in these arguments?
Often I avoid them for the most part. There is no end to the long line of people who think that they can just debate me into being a bitcoin maximalist, and it's like I only have the energy to argue the same thing so many times. On the one end, they're the true believers that are ideologues. They have no strong, you know, interest in the actual financial side of things. They just care about the you know, the principles.
And what are those principles that they care about.
It depends on the person. But you know, censor resistance, decentralization, immutability, you know, pick your poison, really and then on the other end, there are people who are solely interested in the financial side of things. They have no interest in the ideological side of things. They don't care if it's decentralized, they don't care if it's synonymous, doesn't matter. They just think that the price will go up and they can
profit from that. And then I think most people are somewhere in between, and you know, the ideology is very useful as far as promoting the financial side of things
and vice versa. I don't think there are that many people who are really the true believers, because I think that the belief system, you know, is actually fairly extreme when you get down to it, especially once you start talking about, you know, hyper bitcoinization, which is like the idea that bitcoin will replace fiit currency as this means of exchange.
Are there still people who think that, absolutely, yes, we're there are these.
People yelling loudly on Twitter, you.
Know, Crypto Twitter is possibly the ugliest part of Twitter I've seen.
Yeah, it's brutal, but they, unfortunately are people who have like some amounts of influence. I mean, there there were, especially as the banks were sort of having a crisis moment, there were very influential, wealthy you know, often investor types who were preaching hyperbic cointization. You know, there there's there was, It's a fringe belief, but it is not completely absent.
Most of their kind of libertarians. Yes, uh so they're they're very suspicious of centralized authority and government. Probably didn't like their parents.
So I think broadly the not to go all like psychoanalyst.
But I think that please do.
I think a lot of the ideology comes down to a fear of trust where people believe. I think that some people, just generally speaking, believe that people are good and trustworthy, and other people fundamentally believe that everyone is out to you know, screw them over and you can't trust anybody. And I think that bitcoiners tend to be
that latter group of people. And that fear that you know, society could collapse and they're going to be all on their own and they need to stockpile wealth and you know, build a bunker and you know, prepare for this sort of apocalypse is somewhat common among the true ideologues in bitcoin, and so you end up with those types of people, you know, predicting the downfall of civilization and bitcoin as the way that they will emerge as the kings of the new civilization.
You just described that quintessential bitcoin maximalist religious person. But then they blindly trust each other.
To some extent. I mean, I think that a lot of them, do, you know, try to set themselves up
in ways that don't require that trust. But I also think that there is an enormous amount of sort of detachment from reality that is required in order to believe that, you know, in this total dystopian future where the world has melted down and everything is on fire, we're going to have reliable internet connections and electricity providers to mine bitcoin with, and you know, we'll be able to just suddenly move over to using bitcoin for everything.
I find myself, even if I can go with them as far as the world's going to fall apart, I find myself stopping before I get to the point of wanting to prepare for the world falling apart, because I just don't want to live in that world, right, I just assume not be here than being a Mad Max movie.
Well, and if I was going to stockpile things to prepare for this world. It would not be bitcoins, be seeds and beans and you know things like that.
Yeah, they're putting all their money into exactly the thing that's going to be the most useless.
It's going to be the first thing to go to zero.
Yeah, electricity. Yeah, I think you put your finger on it. That this idea of a fear of trust or a.
Belief that trust is fundamentally bad.
You know.
That's the other thing that, like, the idea of trustlessness is very common in crypto, Like it's great that you shouldn't have to trust any intermediary often, you know, to to do your financial transaction or whatever it might be. But this is all built on the idea that trust is a bad thing for a system. And I think that society is built on trust, and that a lot of the trust that is built into systems like the
financial system actually gains you a lot. You know, the fact that I can trust my bank, that means a lot in the financial system, right, it's a lot that I don't have to worry about the idea that I shouldn't trust a bank means that I also shouldn't you know, be able to reverse a credit card transaction. If someone you know steals my credit card number.
I don't mind being ripped off occasionally being the price of trusting lots of people, and they are people who don't feel that way. I'm trying to remember it now, but Satoshi's original paper is sort of like one of the big themes is sort of like, we're going to build a financial system that doesn't require trust, right right. Weirdly, even with cryptocurrency, it quickly starts to build a shadow financial system that looks an awful like the real financial
system without the regulators. But nevertheless, and in this system, trust is absolutely essential. I mean, you have to trust FTX that they've got your money in FTX. You know, all the exchanges are based on this. They're basically crypto banks to get born. So it's very odd that this technology that was designed to create a trustless world just ends up replicating a trust needing world.
I actually don't think it's odd at all. I think it's completely predictable because you know, the reason that people decided to build FTX and all the other exchanges is because adding just a little bit of trust into the system has massive benefits. In a lot of ways. True trustlessness is so painful to interact with and to use on any basis. It's expensive, it's slow, it's it's just not a fun thing to have to deal with it. It's pretty predictable, in my opinion, that trust started to
seep back in. But the problem is that as it seeps back in, you know, the safeguards that are built into those systems so that we can continue to trust them and that that trust isn't abused don't always naturally come, you know, right from the get go. It's not like banks first emerged with a full suite of banking regulations. Those were developed over years, years and years of painful lessons, and you know, it seems like the crypto industry is going through that same learning experience.
Are you a trusting person? Absolutely, You're not generally wary. You don't trust people out your first step is to trust.
I wouldn't say I, you know, blindly trust people. But if I run into someone on the street, you know, broadly speaking, I don't think the likely next move is that they're going to punch me in the face and steal my wallet. I take the same precautions as anyone in today's world where you know, if I get an email that promises I've just won five hundred dollars, I don't trust that. But I do think that people are fundamentally good and you know, work in a cooperative.
Way, except on crypto Twitter.
Except on crypto Twitter.
This was great, and I hope one day I get to meet you in person, but I do I really appreciate the time.
Yeah, absolutely, all right, take care bye.
On Background is hosted by me Michael Lewis and produced by Catherine Girardeau and Lydia gene Kott. Our editor is Julia Barton. Our engineer is Sarah Bruguier. Thanks to our SVP of production, Greta Cone, our show is recorded by tofer Ruth at Berkeley Advanced Media Studios. Our music was composed by Matthias Bossi and John Evans of Stellwagon Symphonet. My old friend Nick Burtel composed our theme song. On
Background is a production of Pushkin Industries. Don't forget that we have a website atr podcast dot com in case you want to send me a question or a complaint or anything at all. I'll read the questions. I won't read the complaints. That's atr podcast dot com. To find more Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts,
or wherever you listen to podcasts. And if you'd like to listen ad free and learn about other exclusive offerings, don't forget to sign up for a Pushkin Plus subscription at pushkin dot fm, Backslash Plus, or on our Apple show page. What did you edit on the unicycle Wikipedia page?
I'm pretty sure that I added information about the existence of other types of unicycles. You know, so there's like the very standard unicycle, but there's also ones that like arement for going off road, and there are ones that have like really big wheels that let you go long distance.
You know. An off road unicycle is to cycling what bitcoin is to money. It's sort of, it's sort of it's sort of like a solution in search of the problem.
Absolutely