Bitcoin for National Security, UAPs, & World War 3..? - MATTHEW PINES (THE Bitcoin Podcast)

And so if I just paint this scenario of what if Bitcoin were to monetize to reach some parity with gold in the next 5, 10, 15 years, you have to ask the question, okay, well then, how should the United States make decisions now to maximize its advantage relative to its adversaries if that scenario were to pass? What decisions would we want to make now? Assuming that's a scenario where it would be true. It might not happen, right? So you just say, okay, let's play this scenario out.

And so in that scenario, it'd be like, well, is it better or worse if U.S. citizens, U.S. companies hold a lot more Bitcoin relative to, say, China, right, in that scenario, or the Emirates or Hong Kong? I said, oh, great. Yeah, I would much rather have American Bitcoiners hold that appreciating asset. And I would much rather have that come at the expense, say, of gold. Today, that guest is Matthew Pines.

Matt is the director of intelligence at Sentinel One and a national security fellow at the Bitcoin Policy Institute. He's also just an all-round fascinating guy, and we get into geopolitics, UAPs, and the national strategic implications of Bitcoin, among many other things. Before we dive in, do me a favor and subscribe to the Bitcoin podcast wherever you're watching or listening. Give this show a boost on fountain if you find it valuable.

Check out bitcoinpodcast.net for episodes and additional resources, grab discount links in the show notes for my kickass sponsor, Bitbox and other partners, and send an email to hello at bitcoinpodcast.net if you have feedback or if you're interested in sponsoring another fucking Bitcoin podcast. Without further ado, let's get into this Bitcoin talk with Matthew Pines. All right, now we are officially doing the damn thing. Matt Pines, Matthew Pines, do you prefer Matt or Matthew, by the way?

Matt works, saves on a syllable. A man of efficiency, I like that. It feels like it's been, hasn't been that long since Nashville, but it feels like it's been a long time. I don't know if there's weird Bitcoin time dilation at play here, but that's how it feels anyway. It feels like there's, you know, the whole like some decades where, you know, whatever weeks happen and weeks where decades happen or whatever that is, I don't know.

I feel like that's really like, Bitcoin takes that on steroids to some degree, but how you doing, man? We're doing well. Yeah, no, Nashville was busy. Those are always exhausting weeks. And so, yeah, like the decompression that takes place kind of distorts how you think about things. It consumes your attention for those few days and then, you know, back to the grind. Yeah. And the conference itself, it's fun. It is also a bit of a, a bit of a grind.

Like again, it's a fun grind, but there's, there's a lot going on this year too. Like very obviously, like you have a bunch of politicians there from all sides and center of the aisle and obviously a former president there. The Secret Service attention was pretty interesting. Clearly, they were on high alert then, but I don't know. And then we now we're, we're getting close to the election and it feels like there's been a lot of wildness happening.

Like we just had Trump officially like go on that Twitter spaces and launch this, I'll say it, you know, shit coin, although it might be a stable coin, shit coin. I'm not really sure. Unclear. I know there's like 63% of it's available to the open public. So at least it's not, you know, like 20%. But then last night, all of a sudden you see pictures of him at pubkey, which I've still been meaning to go to because it looks awesome. I saw you, you have been to pubkey before.

Yeah. I spoke at an event there last year. And then I was actually in New York, I don't know, a few weeks ago actually, and just, I just dropped by there to get a burger. Because I love that their Smash burgers are really good. But yeah, actually, I'll be up there on September 30th for an event in the evening promoting the book that I contributed a chapter to with some other folks with a sort of national security foreign policy background.

It's called national security in the digital age, Bitcoin tool for modern statecraft put out by the folks behind BTC vets. And so yeah, we'll be doing a book signing or like an event panel sort of thing at pubkey on, yeah, I think 6pm or 7pm on September 30th. So if you're in New York City, drop by. I wish I would be in New York City for it, but I'll have to check out the footage afterwards.

But now like that, that was, it was a pretty cool thing regardless of whether Trump was actually holding the phone and actually making the payment. It was like, well, the, that Overton window has firmly shifted to where it's even a news headline that you would read that says, you know, presidential candidate, former president of Donald J Trump, you know, pays for pays for burger at NYC bar using Bitcoin, which is just kind of like wild. I don't know, it's cool to see.

And then we've got these, and I know you're like very much on top of this, but the whole Hezbollah pagers and now they're two way radios blowing up as well, which seems like it was like some really long con work by by Mossad, apparently. That's what I've seen more recently. Like they were, they didn't affect the devices afterwards. They basically manufactured them and then, you know, we're just kind of like waiting, which is like, wow, that's some, that's some patience.

And I don't know that is that, is that what you've seen? Is that like the most likely that they, they were right there at the supply chain from the beginning in the manufacturing process and then we're basically waiting to push the button. Yeah. This is a case of thinking long term, right? So intelligence services, unlike most other parts of the government, they tend to be the most long term oriented. They know who their adversaries are.

They know those adversaries aren't just going to disappear a year after year after year. So they have to formulate plans and strategies and, you know, design their tradecraft, assuming, you know, the adversaries potential vulnerability could not, you know, manifest five, 10 years, maybe decades down the line.

And so this is, I think, a case in point of where, you know, a long sort of trail of operational preparation, establishing essentially a front company, fully backstop by multiple different shell companies that was running like a legit, you know, simple business of building pagers and selling them, right, to, to, you know, a variety of different customers in the Middle East, maybe other places.

It's just sort of set up, you know, years ago on the off chance that maybe one day, you know, somebody from Hezbollah will put in a bulk order and then boom, right, you're, you're in the money. And so, you know, you should assume there are many cases like that, many sort of, you know, shell companies and front organizations that have been set up for a wide range of different operational tradecraft purposes that just haven't, you know, struck gold yet. And most of them probably don't, right.

And so this is the thing, right. Most of them probably just sit there and there's, you know, they just, they fizzle out after at the end of the day, right, they just don't work. But the ones that pay off, this is what you get. And I mean, it's, without saying too much per se, I work in an industry somewhat tangential to communication, let's say. And we've had people reaching out already that's like, hey, is this something we need to worry about?

And it seems that this is a fairly, again, isolated thing, but I think it obviously raises the question in everyone's minds of, okay, does this mean that every communication device that I have, whether it be a pager or a cell phone or a two way radio is potentially a, you know, ticking time bomb that can literally, like literally a ticking time bomb that can be used against me. So I don't know. I mean, I would say most people, everyone has a different threat model, right.

And I would say the average person's threat model is much lower than a Hezbollah, you know, senior officer. And you know, it's like, you got to, you know, just because something happens in the world doesn't mean that that changes your relative threat, right.

Like those particular operations are targeted at particular individuals that stand in a form of aggressive opposition to a tier one nation state intelligence service that has the means, the motive and opportunity to leverage the whole disposal of their intelligence capabilities to ensure that they die when they want to be dead.

And that is, you know, so unless you are a, you know, a targeted adversary of a national intelligence service that trick that triggers motivation for that service to target you for assassination, you know, I would say you're safe. You know, certainly Foxconn is not loading in, you know, PT and explosives in the assembly of consumer electronics and iPhones, just moving around the world. I think it's a safe assumption that's not happening.

But it brings up a larger play, which I think, or larger dynamic, which is true and which does affect, I think, people's data lives in different respects, which is overall supply chain vulnerability and compromise. Not from the perspective of it blowing up in your face, but it being technically compromised. That's kind of what a lot of what I do is on kind of the, the, the cybersecurity end.

And obviously we've had many cases in the past few years of sort of digital supply chain compromise where, you know, both, you know, edge devices like your own home routers and small office routers have been, you know, and are being used by Chinese threat actors as part of their infrastructure to penetrate our critical infrastructure, to hold our critical, you know, grid, electrical utilities, ports, those sorts of systems at risk.

They're sort of hopscotching and using these consumer devices and routers, essentially part of that, as part of that, as part of that infrastructure. You know, a few years ago we had the classic solar winds attack, which was a piece of software that was embedded in lots of different systems, but government and private networks and it became a point that the Russian intelligence services were able to exploit.

And they inserted essentially compromise code into an update that solar winds, you know, software, you know, sent out to all their, all the people running that software. And then it basically created a backdoor for the Russians to exploit.

And so this is the, you know, constant game of cat and mouse in cyber espionage, where folks are exploiting the complexity of modern technical infrastructure and digital supply chains to put in place upstream vulnerabilities or take advantage of existing vulnerabilities or poor software development practices to compromise our, you know, our technical system. So I think these sorts of things get the headlines like exploding phones, people's, you know, faces getting blown up.

That is obviously generates lots of YouTube clips and people losing their minds. I would say like you should be much more like in terms of your personal threat model, you know, the, right now, basically the NSA has come out and said, you know, effectively, we have been unable to effectively deter or, or kick out the Chinese threat actors from our, from our critical infrastructure.

So like as we speak, you know, if China wanted to, right, it's a question of if they want to write, that's a whole different thing. But they have right now probably the capabilities take down some parts of our critical infrastructure in a crisis environment. And you know, most people aren't tweeting about that. That doesn't seem front in mind because it doesn't show up as a 30 second clip, right?

But it's, I would say a much more realistic threat for how people think about the impact of these sorts of activities on their daily lives. I saw you, you'd posted a, I think it was a press release from the NSA recently, maybe a couple of days ago about this, this CCP botnet basically, and that they have basically credible evidence that this is something that is very widespread and with some recommendations for what you should do for your IoT connected devices.

Is this what you're talking about basically using like consumer grade devices to then find, eventually find ways to backdoor into critical infrastructure? Yeah. So there's pretty complicated set of different tactics that nation states like China use. And it's kind of this game of like, you know, they build this infrastructure up, they start to operationally deploy it.

As they start to use it more and more to target more and more, you know, parts of infrastructure or private companies, you know, we sort of start to pick up on it and then we develop a large operation and try to take it down and China then learns and they spin up another thing. So yeah, so that's a great example of this.

It probably happens every, you know, six, 12 months or so is this sort of pendulum between, you know, they built something up, it works for a while, we take it down, they adapt, we try to keep up. So this is a constant game. Yeah, I would say, yeah, it's definitely, I wouldn't say this most recent take down is like the end of this sequence, right?

This will, this certainly is a operational hit to some parts of their infrastructure, but they'll probably be up and running in a different way pretty soon. Or they're, you know, have different mechanisms to do something similar. So yeah, so that is, that's what an example of what I was talking about.

I mean, is it safe to say though that the United States is, you know, doing that back to them and to everybody that we can, I mean, presumably not our closest allies, but I would assume against Russia and China, we are employing similar tactics so that we all kind of, it's like a non-nuclear form of mutually assured destruction. Like, okay, if we find out you've taken down some of our infrastructure, like we'll, we'll do it back to you. Is that the general idea?

Yeah, so this is where between cyber espionage and, and say cyber sabotage, there's kind of a difference in doctrine and difference in sort of the logic. Certainly in cyber espionage, we are in the game as much as anybody, right? And that's kind of an old spy game that's considered, you know, fair is fair, right? Like you spy on me, I spy on you. You know, that's, that's just the game, right?

I'm going to get into as many of your systems as possible to snoop on your internal communications to try to exfiltrate your secret weapons design, your sort of plans and battle strategies, your decision making, you're, you know, all of that, right? That's all fair, fair game for intelligence services on every side, right? We don't, we don't call, call foul on that.

What has emerged in the last several years is an increase in concern and potential source of instability is the use of cyber capabilities for a strategic deterrence, right? So we've obviously invested a lot of, you know, electronic warfare or cyber attack to disrupt say battlefield systems to be able to interrupt, you know, the communication systems on a destroyer or to hit out, you know, to prevent the F 35 from communicating, you know, again, fair, right?

Battlefield context, military target, fair, fair to try to go after that and have the capability to hit it. What's become a bit more of a, of a delicate issue is targeting civilian infrastructure for strategic purposes. So, you know, being able to develop, developing the capability to say to turn off the power to a city or to take down a port to, to destroy, you know, through, you know, remote means water treatment facilities.

So potable water in an area is suspended or could have cascading effects on public health, taking down hospital systems if they don't have backup power and could lead to loss of civilian lives, disruption of, you know, economic activities. And so this is where the line has moved. Russia has certainly used the capabilities in the, you know, in practice against, against Ukraine.

So at the beginning of the war, Russia attacked, you know, and before the war actually had targeted Ukrainian critical infrastructure, specifically their, their, their electrical grid to cause, to cause blackouts to essentially put political pressure on the government. China though, sort of has a different, has takes us, takes us up a notch, I would say, you know, their group, multi-phone has been named. And this other group is a similar version of that.

They sort of have a similar set of activities that we all kind of class, you know, Microsoft is labeled with their taxonomy. But their objective is really is to get into our critical infrastructure and has like two purposes. One is to like, one of them maybe would be like a, from a perspective like international law kind of fair perspective, which is to hit military targets. Right. So if you're in a, if you're in a war within a country, their military targets are fair, fair targets.

So if they're military bases, their infrastructure, you know, you can target those to prevent their ability to mobilize their forces and, and, and come and shoot you. And so we would do the same to their infrastructure, right? So their military infrastructure, their, their command and control systems, the things they rely on to, to deploy military forces, we would target those in a crisis, right? Just the same as they would, we would expect them to target us.

They have sort of expanded the targeting set though, in ways that I would say, at least from my perspective, that's more of my, my understanding, we have not in the sense of explicitly and directly targeting completely civilian infrastructure, you know, with no, you know, even in, in direct military, kind of advantage, right? Just, just designed to basically mess with civil society.

And the objective there is to explicitly to cause sort of civil unrest, social panic, and to change the political decision making inside DC on whether to engage further in a military confrontation, say in an escalation in the South China Sea over Taiwan.

That's kind of the purpose of these, of these activities is to establish persistence in our critical infrastructure networks so that they can credibly hold at risk and then, you know, create chaos and, you know, put that possibility in the minds of the decision makers that are deciding, do we escalate and when do we deploy and who do we deploy and where do we go next on this escalation ladder if we get into a crisis? So that's what these are all designed for.

And actually, yeah, there's a great book. It's quite technical. You know, it's called Rethinking Cyber Warfare. Having my shelf over there, I just read it a few months ago. And you bring up this point of like, is this equivalent to like nuclear deterrence?

And he has a good, good argument why it's really not like cyber is kind of especially dangerous or unstable from the perspective of traditional deterrence calculations in the sense that in a nuclear, in a sort of nuclear dynamic, you have a good idea of what the other person's capabilities are, and you can credibly commit kind of a retaliatory strategy that is quite, that will have a known effect. And so that creates a kind of a game theoretic stability where, you know, mutual share destruction.

I have a high degree of confidence that the missiles came from a place and that I know that they know that I know where they came from, and that they know that I know that they know that I can hit them back, right? So that creates this like mutual reinforcing set of understandings that lead everyone to understand, okay, if I do this, then this is going to happen. And like, it's bad for everybody. So we don't kill each other.

Cyber is a weird great in the gray space where, you know, in many cases, it's, you know, attribution is not obvious, right? Unlike on ballistic missile coming over the Arctic Circle, right? You know exactly when it was launched and who did it, right? Like a cyber attack is much more hard to attribute, right?

You kind of have to, you have to, you know, understand exactly, you know, the full chain of the software development team that came from a certain garrison in the PLA that has a certain way of sort of coding the malware and has a certain fingerprint associated with it. And so you can credibly say, you know, we saw this piece of South software was loaded on this infrastructure. It's managed and deployed by this team.

Like we do a huge amount of effort in intelligence collection, try to trace all of those links back, collect all this information, we even try to indict these people to show that we have the ability to sort of piece those different links to the chain together. But it's a lot of work and very hard to do. It takes like weeks, maybe months, and sometimes you only get like a definitive answer. And that's very different than nuclear weapons, which is like, it just came over, we firing back, right?

So if there is a destructive cyber attack, kind of has this escalation scenario, it's ambiguous exactly who caused it. And you know, as your decision maker, you want high confidence to point the finger at a particular actor, right? And if they're not taking, you know, taking the blame for it, right? Like you always have the possibility of like a false flag, right?

Like we see constant cases of say Russia using Chinese malware or North Koreans using Chinese malware or Chinese using like everyone tried to, tries to obfuscate and muddle the picture of exactly who's using what. I think it was a case of the Olympic destroyer malware where it was in Seoul, no, sorry, it was Tokyo. Maybe it was Seoul. Oh man, my brain is fried. But it turned out it was the Russians, but they tried to make it look like it was North Koreans.

And so this is a classic, classic case here. So this is where the nature of cyber is that it's not sort of binary, like the missiles are launched or not, you could have, you know, kind of an escalation dial of like the degree of effect. And it's also hard to attribute in the sense that you don't necessarily know what high confidence is about a lot of intelligence collection, a lot of time, who did it? And so that changes the deterrence, you know, logics, right? Exactly. How do you retaliate?

Do you retaliate with cyber? Do you retaliate with connect, conventional forces, right? Where is the line? And how do you signal that line in advance so that the other adversary understands what your line is, right? And so be able to credibly then communicate what your deterrence posture is, what your retaliatory decision making is, is very hard, right? Because of these other reasons. So it's a great book. It doesn't really come with good solutions.

But it's really diagnosis why, you know, most people, it's kind of a technical policy jargon. It's kind of in the weeds. A lot of people inside the defense community think about this stuff. But unlike the nuclear weapons, which are in the popular consciousness and have kind of, you know, everyone kind of understands muslims for destruction now and just assume that it's sort of this kind of the same thing with cyber. It's really not.

It's kind of fundamentally different and much more complicated and potentially unstable in that way. And it doesn't go to constantly living in this era where like China, they first have to establish persistence in our networks to be able to have the effect. So it's kind of this weird mix of like the Bay of Pigs, but not quite, right?

It's like we got really worked up when the Russians put the missiles in the Bay of Pigs and maybe it was retaliation because we put the stuff in Turkey and it was like this was seen as like a, you know, sort of like for like sort of thing. But that was quite destabilizing, especially when it was made public. And then the politicians then have to like respond, right?

So now we've made this public that, again, policymakers are in a difficult position because they have to kind of try to send a signal to China that they're not happy about this. And we want, and we want to, you know, we're going to impose costs on you maybe in other ways if you keep this up. And they also need to compel private owners and operators of these networks to take action because it's not the government that owns most of these, you know, these systems.

They have to like ask and cajole and maybe support some of these private sector networks to actually do the hard work of trying to find and kick the Chinese out of their systems. And that's difficult and it's expensive and, you know, companies have other things to do. And so yeah, this is like this complicated game that national decision makers have to play in cyber, which is much more different than traditional kind of military defense.

So that was a bit of a bit of a technical deep dive on cyber deterrence. But yeah, you got me wound up and I had to ask you. I love it. I love, again, safe space for wind winding up and ranting here on this show.

But no, because I mean, I'm fascinated by this because I feel like a lot of people right now, and this is Bitcoin folks I talked to within within that bubble, but also like, let's say my wider fiat bubble of people of all different ages and backgrounds that I talked to, everybody, not everybody, a lot of people who I know that pay attention to these things very closely seem to think that we are very much on the cusp of something,

you know, and I think World War three, this, you know, this boogeyman of World War three gets thrown around a lot. But one thing that I think is discussed maybe less than just like, Hey, World War three is coming. We don't want that, which I think, yeah, we can all agree. We don't want another. We don't want total war, right? That's really, I mean, maybe some people do the majority of people, especially citizens do not want that. I think most governments don't want that.

But it's hard for me to understand what does a World War look like in the year 2024? Like we know what it looked like, you know, almost now almost 100 years ago, you know, in the 40s. And that was catastrophic. But things have obviously changed at incredible amounts since then. Like, okay, we've got cyber war, we've got, you know, good old fashioned boots in the ground war, you know, physical, physical force, kinetic war.

There's the nuclear option that is available to a lot more people than or a lot more nation states than was before. And then you've also got this undercurrent of this information war, which I think there's, you know, that was present, of course, also in World War two, and you look at things like Bletchley Park and, you know, all the enigma code breaking and all of that. But again, that is now like orders of magnitude more intense, more widespread.

And to top it all off, we now have a globally connected supply chain, where potential adversaries are actually key parts, like if we're looking from the US perspective, potential adversaries are key parts of the supply chain that require us to get the things that we need, like both at a civilian level, but also militarily. So how like from your perspective, how do you how do you see?

I mean, first of all, do you think that there we are we are under imminent threat of of a World War dependent, you know, depending on who gets in office, as some would say. And then regardless of the answer to that first question, what what does that actually look like? Like what does a World War look like in the 21st century? Really give me the softball questions here, bro. I'll go harder on you soon. We are not. We're not close to an imminent World War.

I think despite with like the headlines say, I think they tend to, you know, hype things up. We are, though, at I would say a higher risk of great power conflict than we have been, you know, in say my lifetime, right? So it's like a relative game, right? And because the consequences are so severe, right? Like any elevation of such a risk is should be taken extremely seriously. But I don't think we're at like an imminent risk.

I think, you know, most like great power wars require like structural factors that then are triggered with like a flashpoint, right? And so you want to look at one of those structural factors and then where those flashpoints, right? Like there's a drought structural factor, then someone lights the match or there's a lightning strike and then everything goes up in flames, right? So to like assess the question to be like, is it dry enough for everything to catch on fire?

And then, okay, if it is dry enough, where and how likely is there to be a spark and where would the spark come from, right? So that's to answer your question. You have to like do those separate assessments and then pull them together, right? So the first is what are the structural drivers of risk between great power conflict? And I think those are clearly on the uptrend, right?

There's kind of the global system you can imagine, essentially undergoing a immense stress principally driven by kind of a changing balance of power dynamic, right? Really China, but really it's kind of a larger geoeconomic rearrangement that has taken place over several decades between kind of the existing rules based international order, quote, unquote, dominated by the G7. Obviously what the US is kind of the dominant military and economic hegemon.

And we have sort of designed a global system in the post war era that was sort of our rules, you know, secured by our military and kind of our technological superiority across all domains. And so that was kind of what under undergirded underwrote a global economic system that plugged in emerging markets that had a large commodity natural resources, obviously OPEC plus being like the critical node there, and then increasingly China as a manufacturing power.

And so they're developed this kind of integrated global system with kind of US military credit and legal kind of rules, essentially at sort of the top, but then deeply integrated with these two key nodes in terms of commodity resources and goods production.

And when all those three legs of the stool like G7 OPEC plus in China were kind of like in cooperative globalization mood, like we're going to trade, we're going to get rich, we're going to integrate our systems, then everyone was, you know, not not ready to shoot each other.

Right. And I think a lot of things have happened, you know, you could go back in history, but like we are now at the point where the relationship between those key nodes in the global system is starting to start to fracture, right, like G7 and OPEC plus is fractured to, you know, to the extent that we essentially sanctioned one of the major members of OPEC plus Russia, right. So we're trying to put an oil price cap, we sanction them out of Swift, we block the reserves.

Again, not a very positive relationship between that leg of the triangle. Then US and China, we're obviously now in an aggressive strategic and economic and technological competition with China. We're trying to block their ability to climb these value chains. We started a whole set of tariffs under Trump administration that were continued under Biden. We've doubled down on kind of economic and technology and economic, sorry, in the currency war essentially.

You know, it's been like a tit for tat, but blocking them from advanced semiconductor technology, really trying to like strangle their growth. We had a strong dollar policy, you know, crush the end to try to put pressure on the on the yuan. There's lots of maneuverings that were taking place. And in response, right, OPEC plus in China have then tried to like form stronger bonds.

You've had kind of the increasing flirtation with the digital silk road, kind of the export model, kind of aggressively penetrating into Asia and Africa, maybe even on the margin, you know, clearing and settlement systems being constructed using crossbridge CBDCs, using gold as sort of a sort of intermediary sort of reserve asset to settle trade and maybe even denominate some of the commodity trade in yuan. So there are these dynamics taking place that are leading to stress on the legacy system.

On the military side, though, like China has been like aggressively developing the military capabilities. And to first order, that is what keeping American war planners up at night, because they have to try to maintain as large as possible advantage over their, you know, peer and near peer adversaries in any conflict scenario.

And when they see that gap closing, they get, they get worried, they get worried that one, that means that the potential strategic balance and therefore the strategic deterrence is being is being diminished.

And therefore the confidence that say a leader like she could have in successfully prosecuting, you know, a feta complete blockade, quarantine or outright invasion of Taiwan climbs as, you know, more and more Chinese ships come off the line, more Chinese missiles come into service, more Chinese satellites get launched, you know, more and more of our infrastructure is compromised, more and more of our of our political system is sort of paralyzed.

So like, these are things that sort of keep pushing us in this direction where you'd have to say at any given point, you know, looking backwards is, is China more or less likely to try to make a run for it in the Philippines or in or in Taiwan and not objectively like likely, but it's getting more likely, you know, on a structural basis, right. And certainly those are the flash points then you'd have looked for like Eastern Europe. I don't think we're going to go to World War three over Ukraine.

We're just not. It's not a strategic core interests of the West. Like we will keep trying to, you know, ante up and maybe make, you know, risky mistakes. But like as a matter of like strategic logic, we're not going to go to World War three over Ukraine. We just aren't going to do it. Same thing in the Middle East. I think strategically we don't want to do it. Could we be dragged in through, you know, an escalation between Israel and Iran?

Those are always like the flash point risks in the Middle East. I'd say that's not unlikely, especially if we, if Israel and Hezbollah go, go, go, like take it up a notch and Israel actually decides to invade in the north at sort of above the Latani River to try to clear space to get get their population has been evacuated out of the north back, back to their homes.

And if they do that and they actually have to, you know, go after Hezbollah and take down most of the military capabilities, then that could force Iran's hand and Israel might decide, let's just, you know, rip the band aid, let's go for it. And if they do that, like they're going to bring us in, right? Like it was just like, we're, like we're just going to be sucked into that, which would, you know, not be good. Would that be a World War trigger? Hard to say.

I would say it's unlikely that that alone would, would lead to global war. I mean, Russia's got their hands full. China would, you know, not obviously be involved in that particular theater and be a regional war, be fairly destructive economically. Obviously, oil would go bananas and it would be a mess and the Suez Canal and, you know, trade would be disrupted, but it would be, it would be bad.

But the main effect of that would escalate would be, would be distraction and attrition of U.S. forces that would potentially raise the risk of China, right? Getting, getting frisky. And that is really where in terms of World War, that's probably the, on a relative basis, the most likely, you know, place it would happen, right?

Whether it's an accidental escalation over, you know, this boat in the Philippines that they claim on the Sierra Madre, this little speck of, speck of violent that we have a mutual defense treaty to protect and China is aggressively trying to push the Philippines off of it. And you know, so that, that's a point, obviously Taiwan is the, is the big one. So those are the flashpoint risks.

I, I would say it's a risk and it's risky enough that like it's a topic of serious conversation among people that like I engage with professionally, right? Multinational, C-Suite's boards, they are making and changing business decisions based off of that risk, right? And it's always a risk game, right?

And the question is for different companies with different operations, different dependencies, they have been making changes to their supply chains, their network infrastructure, how they think about their go forward and their go to market strategy, knowing that now China is just a riskier place and there is a risk of a war. And obviously a full on war would be a massive risk, right? But they don't discount all of that. They just discount whatever their risk assumption is.

And that's, that often is enough to make material changes to and spend lots of money to say rebuild some of the infrastructure, you know, move out supply chains, find alternative sourcing. And so those are real effects that are happening now because the risk perception of such an event has gone up, you know, on a relative basis among those, among that, that, that cohort. That's your first question. I say, I don't know.

People can come up with like subjective probability assessments and just making up a number. I don't think people will have a high enough confidence. You know, for me, it's not like I'm going to go, you know, to the mountains tomorrow, right? And if you want like a slightly more heterodox and I, I don't know, again, I just think in terms of different probabilities, I don't have like a single thesis.

And one thesis that I think is under explored, less because of analytic reasons, more just because of, I don't know, cognitive bias or it's not exactly like polite, you know, topic to bring up is like, I do sometimes get a sense that at certain levels of the dynamic between the US and Chinese systems, this competition is almost a form of in, in, you know, in wrestling, it's like kayfabe, right?

And of course, I think Eric Winston sometimes talked about kayfabe in different contexts, but like geopolitical kayfabe, that like, it's like, do they really mean it? Right? Right? Do like, are we all getting something out of this? Right? By hyping up this threat, right? I don't know, I mean, obviously like the material facts on the ground are there, like the military things are not made up, right? The actual aggressive maneuvers in the South China Sea are not made up.

The cyber operations are not fictitious. And so I think there could be multiple levels of this, right? It's not just entirely like, you know, kayfabe, but there at strategic level dial, you know, the people in the back rooms when they're talking, right? Like, you know, brass tacks. I sometimes wonder though, if it's like, she does have an interest in centering his populations in his military focus. He needs like a justification to purge internally these corrupt systems, especially the military.

He needs to, you know, build up his own power and solidify his role for the rest of his life. And he has to make these like, you know, point these things down the line, be like, I need you to be ready to invade by 2027. I'm going to have, you know, the great unification of the Chinese dream and we're going to achieve, you know, essentially the, you know, kind of the common destiny for a shared humankind through under my tutelage.

So he has these grand ambitious strategic frameworks that he set up and then translates those into really definitive instructions to the bureaucracy. And so he needs a lot to like anchor and drive that internally. You can argue that we also need to make a lot of structural changes to our economic system. And we always need the national security justification, say, to change the structure of the dollar system, right, where we're to a federal industrial basis and isn't where it needs to be.

And a lot of the arguments is that it's because it's, it's having this national security effect, right? We can't make them the ships and munitions that we need in order to credibly deter China. And so I think it's over determined, right? Like there's always the material logic that drives powers into conflict. And there's always like these political narratives that decision makers in different positions of power spin for their own internal, for their own narrow person, like, you know, purposes.

And sometimes they can kind of play off each other. And but that doesn't mean the risk is low, right? Because some of us look at history and you think, you know, these people thought they were just talking the talk, but other people didn't get that it was just a talk, right? And then they build the weapons and they put the weapons next to each other and somebody fires and it's like, oh, well, I guess we're off to the races.

So that is, I know that's, I always like, you know, most people don't want to think about that because it's just, it's not, oh, it's like, this is the party line. This is how we think, how we assess the, but I think you can't discount if you look at history, like these sorts of conversations always play at different levels. Now how would war actually take place? Well, I mean, those sort of war were already in, you could argue, as a form of world war, right?

It's just the form of world world you expect to see if great power war is, is seen as too expensive to actually fight, right? By everyone because you've got nukes now because the interconnected economic systems are, you know, it's so mutually-dissured economic destruction if we actually like start firing at each other, but we really want to like shiv each other as much as we can. Like we want to like, you know, get a strategic advantage. It's more like jujitsu or, you know, a knife fight.

And you know, we're trying to like sneak a sneak a seek something under the ribs. And there what you see, then is what you see playing out, what you would expect is what you see playing out right now, which is instead of having like great powers come at it, you see increasing cyber conflict, right, just below the threshold. You see, you know, activities taking place in space, which are highly, you know, destructive in many cases.

They're not like kinetically destructive, but they're messing around in space. You know, there's an aggressive competition playing it, but most people don't see it. Same thing in the, in the ocean under sea, you know, cutting cables, doing other things against each other's subs. Again, blowing up pipelines. Yeah. Exactly. Right.

So, like things that are more on the, on the boundaries of the global system and using proxy, so having proxy wars or going, you know, again, increasing activities in like weak and failed states, say in Sub-Saharan Africa, lots of coups, you know, yada, yada. So that's what you would expect is just you turn up the dial on great power competition, but we don't want to actually fight because the risk is too high and everyone loses too much money.

And, but anyways, we sort of, we go to these, we go to these other parts of the global system. We go to space, we go to the ocean, we go to the Arctic, we go to cyberspace, we go to Sub-Saharan Africa, you know, we just try to, you know, just fuck with each other, right, everywhere we can. And that's below the threshold of war.

But if you do get to this unfortunate point where, you know, if you start throwing down and you can imagine different scenarios where you just, you know, all the off ramps don't get taken, right? Even in a Taiwan scenario, right, you'd have to like, you look at the different escalation trees and you'd say, okay, like there are different off ramps, different strategic, maybe compromises that could be made, et cetera. But like full on like, nope, we're going toe to toe.

It's hard to see how that doesn't end in nuclear war, right, with the adversary like China. Now I think because of that, I think there will be off ramps that would be taken. But you could see in those early weeks of say, a Taiwan conflict, it takes place in like these weird, weird, weird spurts, right? Like an initial conflict over Taiwan and there's like many different permutations of how this could go.

Like if we were to do plastic, just bolt from the blue invasion, we would have intelligence in advance, we would deploy certain things in theater, but we would keep them out of the range of most of their missiles. And so we would have to basically try to make Taiwan as much of a porcupine as possible. That's probably not going to work of the long term or in the like in a tactical long term, like the first week.

And so we'd have to assume that we'd either have to like, we have to fight in, right, pass the second into the first island chain and then like, you know, prevent them from actually taking the island. And that's going to be extremely expensive in terms of like ammunition. Like we're going to lose lots of missiles very quickly. And we don't have the many reserve. So the big question is going to be like, everyone comes in, shoots their shot, what they got in theater.

If there's no definitive winner, like if say China is able to take control of the island and then we have to go back and come back in and fight to take it, well, that's probably not going to be great for us. If we stop them from taking it and we can reinforce Taiwan, then maybe it's better for us. If it's somewhere in between, then it's a race for essentially who can reconstitute their forces.

And the problem for us is we have to come in from far away and we don't have as much industrial capacity. China can make a million drones and 10,000 missiles, right? We can't. And we have to go, you know, thousands of miles, they have to go like 50. So that is the structural disadvantage that we would have in like an outright, outright full on war that's conventional.

And so ironically, we may be the ones that need to escalate to their infrastructure on the mainland, hitting factories, hitting infrastructure. And then they might then see those justification to retaliate over here. And you can imagine conventional ballistic missiles hitting US, you know, infrastructure. That would be like a different thing. We have never had that happen, right? Imagining the homeland be hit. I mean, maybe Japanese balloons happened.

Like that would be a different game, like actual hypersonic missiles hitting US targets in in Conus that are not nuclear, right? But then people would be like real freaked out, right? Because that's like, that's just a different thing on the next missile and it's not and it's bad and it's off to bad news land. So but yeah, I mean, space would be a mess. Thus, it would be mostly a submarine war. It would be, yeah, I mean, you could game this out to the cascum home. I hope we never get there.

It would be pretty pretty terrible. The last thing I'll say on this because I get to talk about world, you know, is that is that if you look at history, though, usually in those scenarios where it's like, you know, you get into the great power, the gloves are off, and it's like a war of almost national survival or war where all the strategic stakes are on the line.

That is when you take all the special goodies they've been working on, all the ace in the hole capabilities that you've poured billions of dollars in black programs for. This is what they're for, right? So I would also expect a whole bunch of stuff to come buzzing out, you know, that nobody knows about that are designed to like, you know, stop it or like intimidate or, you know, do some new things. I mean, that's what we did during World War II, right? We brought all the goodies out.

We made a bunch of new goodies really quickly. It's a big stuff using novel physics. And so, you know, as a country, you always want to keep those ace in the hole capabilities in reserve. And you don't just use them in Afghanistan or Iraq. You don't use them against, you know, you don't give them to Ukraine. You hold them only for when, you know, the chips are on the line. So that's the part that's very hard to game out, though, right?

Because like, exactly what's tucked away, you know, that we would bring out exactly what can those things do? You never know until they've been until, you know, they open up. You know, Matt, I feel that I might be being set up right now to ask about something else because we're talking about novel physics and things that may be, you know, unknown to our adversaries currently or maybe unknown to us from our adversaries. And what has to come to mind, of course, is UAPs.

And because obviously a lot of people think that maybe UAPs are just, you know, these are just super secret military programs, either us or our adversaries. And that's just what they are. This doesn't represent anything else. This is just, you know, the government has a massive, governments around the world have massive budgets for defense, and of course, they're trying to get out ahead of things. Can we talk about UAPs a little bit? Can we can we can we dig into that?

And actually, perhaps first as a lead into that, because I don't just want to just don't just want to come at you directly with UAPs. People may have just listened to everything you said and thought, Dear Lord, how does this man know so much? And clearly this man has thought a lot about these things. Can you just tell me who are you and how did you get here today to be at this interesting nexus of Bitcoin and cybersecurity and UAPs and general national security?

Like how does one end up where you are right now? Yeah, it's a winding road. So I guess the the bridge summary, I studied physics and philosophy as an undergrad. I thought I was going to become an academic, decided that was not the path for me. I got a master's in the law school economics, came back to the States, worked for two years at the National Science Foundation, essentially giving grant funding to all the economics and sort of decision risk game theory.

Again, more of like an academic sort of prep track to if I do a PhD in economics or something. Again, kind of did a hard pivot away from the academic track, stumbled really into doing national security consulting for a small company that had a contract to do essentially exercises for the government, essentially war games, but more like national preparedness. So how does the government prepare for all sorts of worst case scenarios? And then that company grew.

And so I grew with the company and did a lot of different sort of projects for different government agencies, sort of spanning the gamut from those sorts of exercises, sort of war games, crisis simulations, both full scale things, tabletop experiments, tabletop exercises, operational experiments.

I did like program assessments of emerging technology, critical government programs, some really sort of continuity of government, how do we keep our constitutional form of government enduring under all scenarios, including nuclear war.

And helped do sort of four structure assessments for government agencies, including FEMA and CISA as it was being set up, which was the cybersecurity infrastructure security agency that was relatively new when I was supporting them to figure out how big they should be, what sorts of capabilities do they need. And at a certain point I got bored of doing government consulting, dealing with government contracting, government shutdowns every nine months. It's just kind of a grind.

And I was just kind of over it at a certain point. And so then I pivoted to the private sector. I joined a small consultancy called the Krebs-Samos Group that delivered kind of more high end strategic consulting services to multi-nationals, critical technology companies, intersection of geopolitical and cybersecurity risk. So we're a mix of folks that had geopolitical backgrounds, a mix of folks that were hard technical cyber folks, some consultants.

So I was kind of like a blend of some of those. But yeah, so I basically have been doing that for the last several years. We were just acquired by a publicly traded cybersecurity company. So these are my personal views, not those of my employer. And we were kind of brought on essentially as a strategic advisory group to this publicly traded cyber company. So basically doing the same thing, strategic consulting, geopolitical. So I'm the director of intelligence for this strategic advisory group.

Bitcoin is a sort of a parallel track on my own personal journey. Getting interested in this several years ago, five, six years ago now. And it just became like it was a personal thing. And then started writing about it, got connected with the folks that started the Bitcoin Policy Institute very early on. And wrote kind of the first white paper at the intersection of Bitcoin and national security.

Tried to communicate some ideas around where I felt maybe these questions were being under explored in terms of the strategic implications of Bitcoin over the longer term to inform policymakers. So I've been really honored to support that think tank as it's really grown and become like probably one of the best in my view kind of policy and sort of think tank shops working in digital assets more generally and really have an outside impact and talking to policymakers.

And so sort of have like a parallel one foot in some of the Bitcoin policy space. Thinking about these questions of where does Bitcoin go in the next five, 10 years? How does it intersect with national security strategy and sort of geopolitical dynamics? So I do a lot of that thinking and research and talking to people. And yeah, obviously it's become more and more salient over the last few years since I first was just sort of riffing on these things.

Yeah, so that's kind of the background on myself. Yeah, and I have never been briefed into any UAP programs over the course of that work, but it certainly has given me a lens. So when I think about UAPs or I think about through all these different lenses that I have, I guess sort of idiosyncratically developed, right? Like my academic lens, which is a physics and philosophy, more foundational, academic and intellectual kind of grounding.

And always thinking about these bigger questions, but like through the hard through the lens of hard science and analytic methodologies that you learn in philosophy. And then obviously my career, which has been mostly focused on national security and emerging technology, and now increasingly thinking about the larger sort of business and market implications, right? Which is like, these things are all sort of interconnected systems.

And I don't think you can try to even get your arms around it without trying to pull all those different threads together. So yeah, that's the TLDR if you want to. Bitcoin often seems like it's alien technology and you deserve a hardware wallet that's truly out of this world. Okay, I'm sorry for the dad joke, but in all seriousness, go to bitbox.swiss.walker and use the promo code walker to get yourself 5% off the fully open source, bitcoin only bitboxo2 hardware wallet.

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I mean, I think that your kind of, let's say, interdisciplinary and interoccupational background makes a lot of sense when people like, it's, I think it's difficult for anyone to be able to see the complete picture. Like nobody can see the full picture, but the more, let's say, the more diverse you've experienced, you have the more, the better chance you have of having at least a more complete piece of the picture.

And that's why you bring in, you know, in working groups, a lot of different stakeholders with different backgrounds, you can hopefully each see a different piece of the puzzle and bring it all together. But you know, I'm, I'm curious, I wanted, I wanted to get into the Bitcoin side as well. And I will find a way to tie it in with UAPs, I'm sure. But on the UAP side, so this is something where, first of all, I wasn't exactly sure when we moved from calling them UFOs to UAPs.

And I'm sure, was there, was there a discrete moment when like, or was, or was UFO like the colloquial term and UAPs was always like the, the military government term for these? I mean, if you actually, I'm not an expert on the precise semantics, but actually you can find that term UAP in government records, you know, referring to these objects like back as early as maybe the 50s, maybe even earlier.

I think I've seen it, you know, one of those like telefacts kind of, you know, copies that you see on, on, on foyid government records. UFO is definitely the most like common kind of colloquial parlance. But even the government has used UFO as an official term.

It was I think the last 10 years or so that UAPs, once you started crafting like legislations, like legislation, especially starting in 2021, 2022, when sort of the Congress, House in the Senate started getting much more serious about this and started put in place actual, you know, statutory requirements and standing up programs and, and, and doing more official things that like UAP became like the codified legislative term.

And I think it was partly to essentially try to get some of the semantic crufts, you know, baggage out of the way. So it's UFO is kind of like it's a, it's a loaded term in our, in our cultural imagination. UAP is just kind of this, it's this new, yeah, it's a little bit cleaner. It doesn't have that.

Yeah. Yeah. Yeah. So I think I think I've, I'm maybe, maybe misremembering the one of the various UFO UAP documentaries I've watched, but I want to say it was like unidentified flying object was like the first time something was reported in a newspaper about this. And that's just like what they went with for a headline and it stuck. It could be wrong on that.

But so what's, what's interesting to me is that of, until I actually started paying closer attention to this, I kind of had the just, you know, general belief that first of all, I hadn't really thought about it that much and was kind of like, okay, yep, this is, you know, maybe this is like, this is the government trying to distract us from something else, you know, just to put out this, this BS about, you know, you know, aliens and whatnot.

And then realizing that, oh no, this is something that there's actually an incredible amount of credible evidence to support across. This isn't just like people in, in trailer parks in the American Southwest, you know, pointing up at the sky.

This is like myriad different, highly trained, highly skilled fighter pilots in the U.S. military and in other militaries corroborating evidence of, you know, like visual evidence from all sorts of different people again, and like, it's not just like some, you know, a Jimbo down, sitting on his back porch. It's like, this is from people who know they fly in the air all the time. They are trained pilots. They are some of the best the military has.

And they independently come up with similar reports for these types of things. And so then it becomes a question of, okay, one needs to accept that there are these phenomena like that, that exists, they do exist. And then what are the, like, what does that actually mean?

And I think that's where a lot of people, you know, myself included start to struggle a little bit because it's like, we, we still, there's all that coded language from, you know, you think of little green men and all the typical tropes. But there's a lot of potential explanations. There's a lot of potential implications. I'm curious as a starting point though, was there a moment when you realized like for you personally, you said, huh, okay, this is very real.

And this is something I need to pay attention to. And this is something with massive implications. Yeah, it was, it was a evolutionary process since I would say 2017, but I had sort of maybe I had been, you know, preloaded with, you know, maybe disposition early on. I'd read the hunt for zero point. You know, I was a physics nerd and I was interested in ass security stuff.

And I, I always thought, of course, the US government's got some special toys that we've cooked up and that's what UFOs are basically. That's like sort of my baseline assumption has always been like, it's what it is, right? We just got special stuff. And so the 2017 came out. And of course, because I'd taken much national security oaths and I was like very much, you know, okay, governments, that's reason why we've got that stuff, you know, for, for the rainy day.

But I don't really need to spend a lot of time, you know, looking at it, right? It is what it is. That's why I was a little bit confused in 2017 when we started, you know, coming out with these news reports about there's a Pentagon study, we're looking at all this other stuff and it's like, wait, did they not talk to the guys with the special stuff to de-conflict it? It was actually, okay, that's my expression.

I was like, why, this is some sort of missed, you know, wires being crossed, really secret special access programs that these other people weren't read into and, you know, fighter pilots are misreporting something. It's actually a secret program. And because that does happen, right? It's very often like you see some weird thing and you're just a Marine or you're a fighter pilot and you're just in the area and you see some weird thing.

And it's like, actually guys, that's, that's all right, don't worry about it. Yeah. So that's just was my baseline. And then, you know, I'd say 2020, when was it? There was a, I forget the timeline because COVID kind of scrambled everything, but there was a, there was initial story in 2020. So there was initial story in 2017, there was another story in 2020 that came out that had the story of kind of the programs that Harry Reid had helped fund.

And there was a quote from Eric Davis, who was a defense contractor for his a physicist for the aerospace corporation, highly clear duty guy. And he basically said like he'd been given, he'd been giving briefings to, he had given briefings to the Senate on off world technology. And I was like, hmm. And so that's when I started paying much more close attention. I'd say 2020, but of course that was COVID era. I was starting off the whole Bitcoin thing.

So it was like, you know, I was doing my day job. So it was like, okay, balance spinning a lot of different plates, but I was paying close attention to the topic really ever since then. And trying to discern the tea leaves here. And so there's the official process of analysis that I've engaged in or say, you might be like using open source, right? Like the stories that get published on the record statements, the track of legislation that has moved, right?

Like if you had read all the UAP related provisions, starting in the fiscal year 2021 National Defense Authorization Act and just read how those changed and expanded and intensified from FY 2021, FY 2022, FY 2023, and FY 2024. And now FY 2025 is coming in this year. You will see a remarkable expansion and intensification of the language and, you know, quite suggestive language. So that's like, most people don't read those things. I read those things for my day job.

And I was like, this is quite, this is quite, you know, revealing of something. Exactly what it's revealing of is not clear, but that trajectory, that arc gave me increasing suspicion, something really serious is going on here.

And then I just sort of had developed over the years personal relationships, you know, high trust with a number of individuals where, you know, when you express serious professional curiosity, and you treat the subject, you know, with the rigor that it merits, you know, folks that want to engage will engage, right?

And then you develop networks of such individuals that, you know, give you different pieces of information, and, you know, I've had a number of conversations over the past, I'd say two years, and those have intensified over the past year, I would say, where individuals of increasing professional rank and stature, significant stature, folks that have had very serious positions of national responsibility in American history and national security leadership.

And when those sorts of people tell you things, you take it very seriously, right? And then you put it together with a lot of other, you know, similar information from many different sources, and you go, okay, there's something very serious happening here. This is not the pop culture trope that has been sort of coated into my brain, had to kind of rewire that, and then take a fresh look at the situation objectively. And I say it's a very serious situation. And so that's where I am, right?

This is certainly no laughing matter, and it's not a figment of anyone's imaginations. Now how do we approach it from many different perspectives? Sociocultural, you know, national defense, human identity, like these are obviously the questions, but those are the questions I think now we need to have serious frameworks for. And you can have those conversations now with less of a risk, probably across different sectors, less of a risk of being thought to be just some kook.

That like, you know, you can have those conversations and actually have them without people kind of giving you the side eye. I'm sure there's still plenty of side eye going on, but I'm curious, based on what you've seen or your own opinions, in a general sense for UAPs, do you lean towards more of a single origin or like multi multiple origins for what we have seen, what's been documented, what we may still see?

Regardless of what that origin or origins are, do you lean more towards a, you know, a single genesis of these things or this is potentially a multiple origin phenomena? I mean, yeah, there's like a long chain of, I'd say, analysis of variety of different circumstantial facts that you have to weave together to then push you in the direction of credence along that final set of propositions.

That's like, at the end of a long branch of analytical activity, right, to be able to say, okay, from across all these different apparent sets of phenomenon, you know, data collection from our high fidelity sensor platforms, information from witnesses and whistleblowers that have firsthand knowledge relating to these legacy programs that have existed for many decades under, you know, official secrecy that maybe have, you know, evaded certain

mechanisms of congressional oversight to retrieve and exploit technologies of unknown origin, biologic materials. I don't even know if those folks running those programs have a high confidence assessment of that question. So I certainly don't think I can state a high confidence assessment. I would say that the apparent morphologies, and these have been reported by the office in the Pentagon that has reported, you know, again, their integrity has been questioned.

Maybe it will be on better footing with the new director now, but at least they've put out some statistics on some of the reports that they have now been officially required to pull together. And they have like a nice helpful pie chart. You can go to Arrow's website. You know, the all domain anomaly resolution office is its name created by statute. Kristen Gillibrand, who's the senator from New York, also a pro-crypto senator.

She's the chair of the Emerging Threats Kate Billy's subcommittee on the Senate Armed Services Committee, and she's, you know, Arrow is kind of her baby. And I think she stood it up and wants to see it succeed with this new director especially. And they have a nice helpful pie chart of like the different morphologies, right? Spheres, orbs, you know, different geometric shapes, cylinders like a tic-tac shape.

That's the classic sort of, you know, that was the classic case with David Fraver and Alexander Deistrick, the Navy pilots. And so, yeah, like that's all sort of phenomenological evidence of like different morphologies, right? Now we make different morphologies, right? So like, you know, you saw an F-16 and a B-2, would be like, are those two different species? No, it's the same species, just different stuff, right? So, and even if, you know, you have biology materials, right?

Well, you know, we are on the trajectory to create synthetic life, right? And like the convergence of a lot of these different scientific, technical paradigms, whether it's artificial intelligence, robotics, synthetic biology, genetic engineering, you know, research on sort of integrating essentially sort of neuromorphic computing. You know, these are all putting a direction of essentially a convergence of, you know, synthetic biology and engineered systems.

So you can imagine like an advanced intelligence producing advanced aerospace platforms, just as much they're producing, you know, different synthetic biological avatars or, you know, pilots. And so those would be very, again, if you get access to that information, okay, that's great, but you still haven't answered your question, which is where they're coming from, right? Or how many different origin points are there?

So I think we're a long way from stating with any degree of confidence, like, you know, there's a reason why in the bill that has been introduced last year and has been reintroduced this year by the Senate called the UAP Disclosure Act, they define explicitly technologies of unknown origin. Like, they don't apparently know. They've been told these technologies exist. They're associated with quote, non-human intelligence, an advanced intelligent life form that the US government is aware of.

They define that, you know, in law. And so this is what the Senate has put in language.

Now I think Senator Schumer in his floor speech that he gave after he was, he went to the floor with Senator Mike Rounds after portions of this bill that were the most important pieces were taken out, this independent review board with subpoena power, eminent domain authority to take possession of these technologies of unknown origin of biological materials, that was stripped out by the House Inconference Committee.

And that's why it's coming back up for a highly contentious, you know, set of engagements now in Congress. We'll see if it passes through the different wickets, you know, procedurally. But he in his floor speech refers, and it might have been a slip of the tongue, to technologies of unknown origins. He had a little S there. Maybe that was just a slip, but I don't know. But again, these are all just, we are far out in the branch of the tree.

You know, there's a dark forest that surrounds this open clearing, and I'm in the open clearing and I'm reading the statutory language. I'm listening to different senior officials, both current and former say things, both public and private. These are like things I can assess, I can interpret, right? And then you have the speculative inferences that you want to draw from that relatively limited set of like high confidence facts, you know, and then you're going off into the dark forest.

And you know, part of that dark forest is, okay, who's here? What are they, why are they here? You know, where do they come from? And those are the essential questions that we all want to the answer to. I don't have like a high degree of confidence in what the answer to those questions are.

What are the, what are the point, or like I should say, what are the points where there is a high degree of confidence in terms of just like observable, like, you know, you talked about the different morphologies that like, that is, of course, I mean, it's like, it's quantifiable, right? That's something that you can look at and say, okay, we can make a nice pie chart out of this.

But in terms of, let's say, what, you know, either yourself or folks within the government and intelligence agencies look at to say, okay, you know, these, these are the, these are the known knowns or at least mostly known, maybe not entirely like for any, you know, quote hard facts that are out there, like things that are fairly tangible, what, what are those pieces that then, you know, are the high confidence pieces that then you can take an extra blight and make speculations based on?

Yeah, I mean, the two basic questions you're trying to answer are what are their capabilities of the NHI that is the say, progenitor intelligence, deriving, you know, metaphorically or literally the, the technologies of unknown origin that we're observing. And so you're trying to say, what are those capabilities, right?

What can these technologies demonstrate in terms of a knowledge of physics, a knowledge of engineering, knowledge of material science, a knowledge of maybe something more fundamental about the nature of reality? And so that is obviously like one direction of analysis, and you can look at certain data they all come back to, and then there's intent, right? What are they doing with those technologies, right? What is the pattern that we can, that we can observe?

And can we make inferences about what might be behind those, what might be motivating that pattern of behavior? And so on the capability side, right, like this is where we have, I say, higher confidence, at least I have a higher confidence in the observations from our sensor platforms. Now those can always be spoofed, right, especially by an advanced adversary that knows the capability platforms and could, you know, create fictitious returns.

And so that's why you need multiple sensors, multiple observations, you know, and I think I have been convinced that we do have extremely, you know, well-validated, you know, multi-sensor collection on these objects from our most advanced intelligence platforms that allows us to assess, you know, pretty well their performance envelope in the sense of, you know, acceleration, speed, maneuverability, trans-medium, that sorts of things.

So it's like the five observables that have been sort of the sort of colloquial description. These are actually also in that UAP disclosure act. I don't have it ready to hand, but they sort of itemize out. What are the characteristics of observables? Trans-medium meaning like air to water, water to air. Exactly. And space to air, you know, air to water.

And so these are itemized in the UAP disclosure act as defining essentially what a UAP represents in terms of its performance characteristic and distinguishing it from a temporary, non-attributed like conventional object, right? Like a weather balloon, a flock of seagulls, you know, a conventional airplane, an adversary platform that you just haven't yet, you know, attributed, et cetera. So they make an explicit distinction between those different categories.

And UAP is a very definitive characterization in terms of these anomalous performance characteristics that we have, you know, decent, I would say decent, like really good collection on, right? And then so that's like one bucket, high credence. You know, I become convinced, but I don't think most of this evidence is public at this point is that we do have these legacy programs. We have retrieved these materials, craft, et cetera.

And so if you actually have physical possession of technology, of unknown origin, craft, pieces of craft, ejecta, debris, et cetera, then you can subject them to much more intensive study. You can look at the materials design, the actual, you know, atomic composition. You can look at the morphologies, et cetera, try to understand, you know, their methods of construction or manufacturer. And so you could discern more about the capabilities, right?

What sort of knowledge of physics, material science do they have? Obviously much farther than ours. And then intent is the big question, right? And this is highly fraught, right? Because this is like the classic, oh, alien invasion. Are they here to take us over? Obviously the UFO community, quote unquote, just like there's a Bitcoin community has like a deep sort of canon of lore and literature and firsthand testimony, many different books.

You know, it's, you know, both mix of extremely professional scholarship and rigorous historical research and, you know, honestly, schizophrenic delusion, right? Like you've got a mix of everything in there, right? And that's what you got to deal with, right? Humankind is a melting pot, right? And there are, I think, you know, credible stories of people that have had, you know, anomalous encounters and anomalous experiences that need to be factored in to this assessment.

It isn't just a sort of, okay, ejecta, debris, right? It's a much more complicated phenomenon. And so you need to go in sort of with an analytic open mind, right? Not treating anything, you know, not dismissing anything firsthand, right? But understanding that it's pretty fraught. But yeah, I mean, look at Louis Alessando, who's, of course, you know, the most well-known figure now, kind of out there who had this position or responsibility investigating some of these programs in the government.

And he, you know, looks at it and I think he's got a fair judgment, at least initial judgment, which is if something that has advanced capabilities is buzzing your military platforms, you know, with impunity, is interfering with controlled airspace over sensitive sites, including your nuclear weapons, seems to be able to interfere with the performance of a nuclear weapons, you know, has, and that has been pretty well documented in both the US and Russia. Well, that is a potential threat, right?

Not a threat. It is something that is obviously demonstrating capability to elements of our military apparatus, in fact, our most strategic abilities, that it has the ability to interfere with them, almost, you know, unimpeded. So you can interpret that, made of ways. You can interpret that as like, you know, big brother coming in and taking, you know, saying, no, no, no, you little monkeys, you're playing with the nukes, like, bad for you.

We're going to be taking the keys away, you know, they're taking the matches away from the kid, or it can be a form of intimidation, right? It's like, you know, we just want to put you in your place, right? Know that, you know, we're bigger, faster, better, stronger, smarter, and you just, you know, know your role, right? You can interpret it either way. Benign self-protection paternalism, or, you know, malign, you know, hierarchical, you know, display. I don't know. It could be a mix.

So this is where you get into more, I would say, constructing mythologies, right? And I think those are important to look at, right? Because I think I have to be rational in terms of, okay, if I've pushed myself along this tree of now thinking that these objects are real, they're represent non-human intelligence, that we maybe have possession of some of these objects, we may have had possession of these objects for eight decades.

Okay, that, you know, I had to, you know, I assume they just showed up just recently, you know, like in the century, or, you know, some variations or some aspects or this exact thing has been here for many, many, many years, maybe millennia, maybe much long. And they have to look at other domains of science to try to motivate them and explanations in that part of the tree, right? And saying, well, you know, how common is life in the universe? Could life has arisen nearby?

And a different star system would come here before advanced civilization developed on Earth. Could advanced civilization have emerged on Earth before advanced human civilization? Could advanced civilization have developed in the solar system before the Earth? Maybe Mars was much more habitable, you know, a long time ago, and obviously now it's not. And these are like, this is really in the domain of like astrobiology astrophysics, right? These are like semi empirical questions, right?

Like that we don't really have a good answer for yet in terms of the basic boundaries of that analysis, right? How likely is life in the universe? How common is it? What are the precursors for complex life? You know, and then of course the physics tree of like, well, if there was life that emerged, say in a distant part of the galaxy, like how could it get here, right?

Well, we then have to branch out into areas of physics that we currently don't have sufficient knowledge of to explain patterns of propulsion or, you know, other forms of traversing the universe that are currently not available to us given our present knowledge. So I mean, people think these questions are like hyper conspiratorial or speculative, like this seems like, you know, eminently rational inferences to draw once you've established a certain base of facts.

And then you just naturally follow the questions that arise at each step along that chain. And for folks that haven't followed that chain of questions, obviously like the questions that then you have to ask, you know, several steps on the line sound crazy, someone hit someone early on. But like the thing about the intelligence community is that we ask all sorts of crazy questions, right? You have to talk to people and that's their job is to ask all sorts of what ifs, right?

Their job is to like, what if China has a breakthrough in some crazy part of science with. And for me, just speaking sociologically, like, I find it kind of like, and again, maze because I'm a bit a bit autistic. It's like, why, why is it like considered just fine to talk about the emergence of like some super intelligent AGI guide? Or even quantum computing, right? Which, you know, are are entirely sort of theoretical propositions, right?

We are speculating about a pretty dramatic either breakthrough in fundamental physics or the emergence of some, you know, fundamentally new capability as a world of human engineering that would pose like an existential risk to our civilization. And these are now topics of like national discourse, policymaking, grant funding from the government, you know, big billion dollar, you know, infrastructure investments, massive competitive, you know, capital dynamics.

And it's just, okay, we're trying to build the next crazy cool thing, right? That is going to take advantage of some, you know, either novel aspect of the universe in terms of its capacity to generate emergent complex intelligent systems at, you know, at a sort of a substrate independent way, or taking advantage of some aspects of the quantum nature of reality to perform computations that we otherwise haven't been able to perform.

Great, you're relying on some pretty speculative legs to make a, you know, dramatic policy, you know, a serious policy sort of set of decisions and have a serious debate, right? Those questions are now at the center of the policy discourse, strategic competition with China, et cetera. UAPs have not moved. Even though Senator Schumer in his speech on the floor last year, he said his like top four legislative priorities last year was like China competition, fentanyl, AI, and UAP transparency.

So the center majority leader, for him, these are in the Overton window. These are at the center of the policy debate for him. Most other people haven't quite caught on. And I'll just tell you the Senate majority leader knows a lot more than you do. Right. And he's drafted up this bill, the UAP disclosure act, you know, was co-sponsored by him, you know, for two years in a row now. Like, I don't know what to tell you. Like they're trying to, you know, the clues are there if you want to look.

Most people just don't look. And so this whole thing kind of sounds kooky. But if you actually just do the basic reading, it's not at all. It's quite serious. And that's the story right now.

Do you think maybe a reason for that, just because you mentioned even like funding or general acceptance of things like AGI or quantum computing, because these things somehow feel almost more deterministic to people because it's like, it's based on things that we already have or already know, physics, we already kind of, you know, understand and know versus you go over the UAP side of things. And it's like, we don't really understand any of this.

So somehow it's like, even though it exists, you know, like this is, this is something that is real. We still, we just have no frame of reference. Like with, with AGI, we can see, well, like, oh, well, LLMs have gotten so much better in just the last year, give it five more years and we'll all be, you know, a serfs of the AGI. Like I can, you know, people can feel that that could happen versus with UAPs.

It's like, I just went from thinking this was all kooky conspiracy theory to maybe opening the door to like, this is something that I need to pay attention to. And I have absolutely no frame of reference, like my only frame of reference is basically limited, you know, government disclosures and sci-fi movies. Like is that why it's just, it's so outside of anything we know? I think people are not looking at all the, say, log charts they should be looking at, right?

So the log chart that people look at in AI is the scaling law, right? And that's what is motivating all this attention on AI explosion, right? Is that you have an exponential process. You can put in a log chart, it's just a line on a log chart. And you look at essentially the capability improvement with more training, more compute, right? That's just, it seems like there's a scaling law. There's like a log chart that we can look at and extrapolate it out.

I think you could draw a similar, more qualitative log chart just by looking at the legislative text in the National Defense Authorization Act from FY21 to FY24. And I think you'll see orders of magnitude qualitatively more intense, more explicit signaling from national leadership on this subject that you should draw similar inferences as the folks drawing inferences from the scaling laws in AI, right?

If you look at that and you're like, oh, this is the direction of travel here, I can't guarantee that this is going to lead to some super intelligent explosion, but I have to be rational and just extrapolate that out, right? I have to understand there's some underlying process that's maybe opaque to me, right?

There's like information that's like, I'm not an AI expert, I don't work from open AI, I don't know what secret sauce they're cooking up or what's on their drawing board, etc. But the Observable Leavenance tells me there's a dramatic process of improvement taking place, it's sufficient to merit serious policy and maybe even personal decision making.

I would make a argument, there's a similar qualitative inference though that you can draw from just the public record that is available to people, but they just don't assess it, they don't interpret it in the same way because I think it's more socially coded as something you don't look at seriously. It's socially coded to treat AGI seriously, it's not socially coded to not treat UAPs seriously yet.

I think once people do though, they will then reappraise the fully available evidence that's in the public domain to then draw in similar inferences, again conditional, not like expect that aliens are going to pop out in the next two years, but will then have to update their priors significantly and then could then pursue other forms of information collection depending on where you're situated, like if you're in certain venture capital domains, I know there

are various, there are very, very, very rich people, folks that run large investment pools of capital, venture capital, private equity that are very interested in the subject and for well motivated reasons, or at least motivated reasons for them professionally.

And this is the thing, it's kind of the cognitive dissonance, it's like people have a certain intellectual or cultural crutch that can't get over, and the thing about people that get over that crutch, well, they get there first, they understand it before anyone else does. And you can argue Bitcoin is sort of one of those things, same similar sort of process, right?

Folks that look at the price chart in a logarithmic scalar again, it's like, again, does it guarantee it's going to, you know, micro-sailor boom case, right, whatever $30 billion in 20 years? Yeah, again, that's the speculative inference, but you have to then take seriously this log chart, right?

You have to take seriously the fact that, you know, this could be actually, there's some process unfolding here that deviates from my priors, my basically, my, you know, my prior expectation of how something like this should behave. And because people are loaded in with a lot of these, you know, pre-structured biases or, you know, ways of dismissing possibilities, that they just don't take the, you know, available evidence seriously.

And, you know, the thing about Bitcoin is that people that took that seriously, again, they got rich, right? Like, that's the thing, that was the least of material payoff for that. I don't know what the payoff is for taking this seriously. In fact, this might be one of the reasons why it's kind of hard is because there might be a disincentive, it might be actually a negative payoff, right, from taking this seriously.

And I wouldn't say that I've gained a lot of psychological comfort or intellectual satisfaction as a result of having pursued, you know, my curiosity in this domain. You know, maybe it's just the nature of, you know, my own personal compulsion to find things out that has now cursed me with certain information. But, you know, that is, that's the nature of the beast here. So, yeah, I'm not trying to convince anybody.

I mean, I don't know, people can take whatever they want out of this conversation. I just see it as like my obligation to like point at what I think people can easily observe and tell the inferences that I've observed from that plus other information and tell you that, I don't know, I wouldn't want to be surprised. Some people would rather not know these things. That's perfectly fine stance to have. I think it's maybe even a healthy one in certain respects, right?

I think people could make their own decisions about whether to pursue this. But our representatives, though, you know, that spend public money and that we, you know, sensibly have oversight over parts of the government that pursue activities in secret on our behalf, well, they should have certain mechanisms of accountability.

That's at least, you know, like my, like one like ethical line here is that, like, we want to have a sense of, you know, this constant balance between democracy and secrecy. You know, these are, these are aspects of our just, you know, more prosaic relationship to these programs I think needs to be remedied. And I think something like UAP disclosure act is an important piece of that.

As opposed to how we digest this culturally, sociologically, and where this goes the next few years, I have no prognostications. I just think it's going to be a thing people are going to have to reckon with at some point. I think it's better to take a better view of reckon with it slowly and for civil society and different professional disciplines to, you know, take it seriously, get ahead of it. I don't know. I'm just one guy though.

No, I appreciate your approach to this because, you know, and I've listened to a decent amount that you've spoken on this and even to start with you here today, I've never once sensed from you like pushing any of this on anyone. You have a very fact space, evidence space, like, hey, this is just something that like we are looking into at a national level, you should probably look into it at a personal level if you're curious about this.

But as you said, if you want to, you know, bury your head in the sand, you're also free to do that. But I also figured out how to perfectly bridge this into Bitcoin, Matt, because to many people, I think Bitcoin feels like alien technology. It is incomprehensible, especially if you come from even, I should say, even if you come from a traditional finance or, you know, Keynesian economics background, it is perhaps more alien to you because it is something like it's, it's money automated, right?

It's money that is guaranteed by code. It is fair money. It is something that is completely divergent from anything else that we've had until now. And it could very much seem like alien technology. If you don't have come from an economics background, you don't come from a traditional finance background, you're just going about your daily life trying to get by. And you hear about this, it, it almost seems too good to be true. Like, how is, you know, how is this possible?

And you can go through all the usual, the government will shut it down, you know, this or that. But you've spent a lot of time looking at Bitcoin and talking to policymakers about Bitcoin through your work at Bitcoin Policy Institute. And what I think is fascinating is this idea of Bitcoin as this really strategic piece. Like, yes, this, this is something that has an incredible amount of impact at the individual level.

Like, and we see that across, doesn't matter who you are, where you're from, that's the beauty of it. But at a national, at an international level, we now see some of this game theory that has been discussed for a while, probably back in, you know, the original Bitcoin talk forums, because they pretty much hit on just about everything. We end up discussing these days. But this idea that nation-states start to adopt Bitcoin.

El Salvador as a, as a classic example of, you know, legal tender had been buying it, you know, every, a Bitcoin a day or whatever they have. Kingdom of Bhutan, who has was quietly mining Bitcoin with excess hydro power for a number of years. Now it's more public. You have US presidential candidates who are actively talking about a Bitcoin strategic reserve. And Senator Cynthia Lummis, who put a bill on, on the floor for it. How do you, you know, how do you talk to policymakers about this?

How do you more broadly, how do you think about this from a nationally, but then internationally geopolitically standpoint, as far as is Bitcoin adoption by nation-states inevitable? Or is it something where not everyone's going to do it, but those that do not will be, you will be severely disadvantaged from a strategic perspective? Yeah. Well, I start by saying that the time traveling AI is not going to accept Treasury securities or gold or, you know, civilizational harder.

So you know, Bitcoin might be the, the, the natural medium of exchange with, with not human intelligence. So I just sort of, I lead with that. Personally. A good, a good soft opener.

But you know, I think more, but usually, you know, maybe more practically what gets them oriented toward treating Bitcoin seriously is, yeah, the sense that the world is going through, I think, a series of different disruptions and the patterns and the sort of systems that we've relied on to be stable and enduring over the past, you know, say 40 years, you know, can't necessarily be anchored on over the next 10 or 20 years.

And so I'm not arguing that we need to like go to a Bitcoin, you know, standard like tomorrow by any means, but it's a matter of treating, you know, something that maybe you dismissed with, with renewed seriousness and considering different scenarios. And so like one more concrete scenario to paint is the what if Bitcoin monetizes to reach some degree of parity with gold over the next say five or 10 or 15 years.

And you would have, if you ask that question, you know, I think it's not maybe your base case, but it's not implausible by any means and national leaders have to make like risk driven decisions based off of distribution of plausible scenarios and to have a plan to maximize advantage and minimize risk across as many of those different scenarios as possible.

That's just like what your job is as a policymaker, a decision maker and national security or political leadership, like that's what we have entrusted you in a position of responsibility to do, not to ignore possibility because it didn't fit your mental model. Like, okay, that's fine if some Joe Schmo does that, but like you're in a position of responsibility.

I like your job is to like think about those those corner cases to think around those those curves and to like make strategic decisions for the long term interest of the country considering all the options available to you.

And so if I just paint this scenario of, you know, with the what if Bitcoin were to monetize to reach some parity with gold in the next five, 10, 15 years, well, then there's you have to ask the question, okay, well, then how should the United States make decisions now to maximize it to its advantage relative to its adversaries? If that scenario were to pass, what decisions would we want to make now? Assuming that's a scenario where it would be true, it might not happen, right?

So you just say, okay, let's let's play this scenario out. And so in that scenario, be like, well, is it better or worse if US citizens, US companies hold a lot more Bitcoin relative to say China, right, in that scenario or the Emirates or Hong Kong, let's say, oh, great. Yeah, I would much rather have American Bitcoiners hold that appreciating asset.

And I would much rather have that come at the expense, say, of gold, where China has been aggressively hoarding gold, the Middle East has been aggressively hoarding gold, Russia has been, you know, hoarding gold, India has been hoarding gold. A lot of people who have been hoarding gold in the last 10 years are sort of diversifying away from legacy sovereign debt reserves, essentially holding steady relatively, even as their economies grow, right? So they're just accumulating gold reserves.

Okay, that's like the old standby 19th century style thing, usually when there's geopolitical risk or uncertainty, people go the old standby. But their hedging against gold is kind of maybe a, is a hedge against humanity in that sense, like it's a hedge against kind of destruction. It's a total breakdown of the global system. And so our current, you know, policy plan is to double down on the treasury market.

You know, I don't have to replay what Lou Groman says, but like, that's a pretty high risk play for me, right? Maybe they can, maybe they can thread the needle, right?

Maybe there's a combination of central clearing, standing repo facilities, changing the regulatory treatment of treasuries, stuffing more debt that we print into more and more, you know, private balance sheets that are essentially coerced or induced to hold it, you know, leveraging our geopolitical power to like make more of our friends and allies, buy more of our debt, term out their, you know, our debt by swapping short term debt for century bonds, leveraging

our geopolitical and military power over them to like make them buy it, you know, really just like, you know, trying to squeeze as much out of this sort of hegemonics position we have, both monetary and geopolitical sort of hegemonic power to sort of keep the fiscal engine running, right?

But that is going to require, you know, more and more use of those, of those instruments that are probably diminishing effectiveness at the same time that like just the basic exponential math of compounding interest is going to play out.

And so I look at this and I say, you know, okay, like there's probably different moves you can play between central clearing, basil four, geopolitical coercion, inducements, financial repression, capital controls, you may be able to like run the play, keep squeezing out a few more years, but that seems like a very fragile strategy, right? That's like assuming everything works out, right?

It assumes that maybe the adversaries, you know, don't do something quite radical and disruptive that, you know, you are in a position of vulnerability, basically is my point. And then the position of vulnerability, right, you need to think about what asymmetric, you know, strategies can you can you lean on that could pay off, you know, in a high risk scenario, right? This is you have an inverter relationship to your vulnerability, right? So that's sort of barbell.

I think Bitcoin is like a bar good national is a natural barbell, both for individual portfolios, like even BlackRock is sort of saying that it's like a natural portfolio diversifier. Essentially, it's like a point two correlation to the S&P and a trailing six month basis goes like point one, right? Yeah, so it fits in a portfolio, maybe not everything in a portfolio, but there's a rational basis to, you know, a portion some of your, of your reserves or your portfolio a holdings to Bitcoin.

I think that that argument sort of continues to sort of reflexively reinforce itself, you know, every every every time additional person accepts that argument. And so this is I think not like a crazy idea. And it's just a question like, are we going to take advantage of it relative to our adversaries? Are we going to make those smart policy moves, you know, sooner rather than later? Now, again, there's no such thing as a, you know, a free launch here, right?

Like they're always going to be trade offs, there's going to be devil in the details, you know, implementation and the best late plan, right? That, you know, can be politically contrived or, you know, distorted in practice. So I'm under no illusions that like Bitcoin is like this panacea or like this, you know, one weird trick to save America, right? It seems a bit hubristic or, you know, panglossian. I think it's a it's a tool. It's a tool that's maybe underappreciated.

And you know, it's worth it's worth exploiting toward, toward advantage. But I think at the same time, keeping to our values, right? This hard national security, geopolitical, you know, pressures, and I think in the, in the vacuum, like you could see the convergence of pressures driving a lot of governments around the world towards, you know, a less liberal stance to their populations, right?

Like this seems to be the natural trend of both increasing concentrations of digital power, financial power, political power. And those are often driven by geopolitical anxiety, geopolitical pressure, right? You need to match up as much as you can with what an adversary is doing.

And if that adversary is an autocratic or even totalitarian system, that can marshal the full resources of its economy and do civil and military effusion like in China, can just sort of gang press anybody into the service of the state, can deploy capital in non-economic ways, but in service of national strategic priorities, say to undercut, you know, different, you know, manufacturing sectors in the West or to build shipping, you know, you know,

capacity that, you know, absolutely dwarfs what we have in the West. That drives anxiety in the West, but oh, we need to do something like that, right? We need to have a more of a command style economy. We need to ration credit and apportion credit to favorite sectors that are in our strategic interest or even in our crony capital interest.

And so I think, you know, Bitcoin isn't going to necessarily fix those pressures, but I think it naturally is aligned more towards, you know, the orientation of the individual relative to concentrations of power. It gives, in theory, you know, the ability from individuals to self-custody their own wealth and hold it in a fashion that doesn't rely on a third party or a trusted intermediary that could exploit them.

And I think that's just a good thing to have in a world where there are these other forces, you know, pushing for concentrations of power in all the other parts of our lives. So that's probably especially acute in the global South, where folks don't have access to trusted, you know, rules of law or banking institutions or, you know, not overtly corrupt, you know, governments.

And it's probably a good thing that they have access to a peer-to-peer settlement system and a hard asset they can save some of their wealth in. Yeah, this just seemed like, like, I don't think you need to make a, like, it's not a, obviously, like, the Resistance Money book is great, right? I recommend that, right? And they have, they're very humble.

They're not making, like, this wild extravagant claims that Bitcoin's going to take over the world, it's going to fix everything, it's going to make art better, it's going to, you know, it's going to make more babies, we're going to go to the moon, it's all these things, right? It's like, great, okay, maybe, you know, you could tell a nice story there. But I don't think that's, you don't need to make the argument. Policymakers are just like, this is a sensible course of action.

We could just make marginal changes to our current stance towards Bitcoin. It could pay off, you know, pretty positively for our national security and liberal values. It seems like a win-win. Now there are downsides you have to, like, then mitigate, obviously, like, you know, criminal ransomware, like, it just is a phenomenon that only really emerged because you had, you know, digital assets, right?

Because you can then essentially ransom anyone on the planet and get paid with large amounts of money. And that just is the thing, right? Like, I deal with that all the time. So to my clients, you know, worry about ransomware, right? It is a scourge. It just is, right? So you just get to be like, you have to be objective, right? And be like, yes, the world is not painted, you know, black and white. There are shades of gray.

And you have to do a strategic assessment, balancing all these different, you know, costs and benefits, and then trying to make policy decisions that mitigate the costs and maximize the benefits. And I think we can do that in a pretty sensible way. I feel like I'm not making like a radical, you know, set of claims here, but because it's Bitcoin, it's kind of this weird new thing. It's kind of like, you know, it's like this shiny object. It seems kind of crazy.

It's like, same with UAPs because these are all just socially coded. But I think the actual underlying, you know, approach is just you have to be, you know, rational and balanced. It's ultimately like a very sensible approach, right? And even, okay, you look at Bitcoin specifically, this is something that if you are a free society with a liberal in the truest sense of the word liberal government, you, it is perfectly aligned with that is aligned with individual liberty.

It is in vine aligned with personal autonomy, getting people along that spectrum of sovereignty towards becoming, you know, more sovereign themselves, nothing is reliant on centralized entities. If you are a dictator, if you are an authoritarian, if you are a totalitarian, it is very much not aligned. Like it is not good for you. Bitcoin is not good for you. That is a destabilizing force.

And so what is kind of perhaps hopeful is that one would hope that more liberal governments around the world would recognize the obvious alignment between Bitcoin and what they purport to be and say, okay, we want to embrace that. That is something that is good for our people and that is who we serve. And that more authoritarian totalitarian governments around the world would, you know, fight it off with the 10 foot pole and say, we don't want that anywhere, anywhere near our people.

We don't want to give them that kind of power. And that ultimately becomes a really great, you know, a great force for freedom, I would hope. You know, and this is, you know, obviously theoretical things could go other ways. You could have a very authoritarian government that decides, well, Bitcoin for me and not for the my people, you know, we were going to bind it as a nation state, but I'm not going to allow you as the, as, you know, my citizen to hold any Bitcoin.

So you could see, you know, but again, Bitcoin's money for enemies, right? It's money for anyone. That's kind of the beauty of it. But as you said, you know, yeah, it can, it's used by criminals, it's used by thieves, and it's used by freedom fighters and activists and, you know, your uncle Jim and, you know, your 12 year old nephew and whatever else, because Bitcoin doesn't care, but that's kind of the beauty of it.

But I am very curious to see in these next few years, because it feels like that Overton window has shifted. It is in the political discourse. Do we see meaningful changes at least in the, in the United States? I feel that Europe may lag behind on some of this a little bit. If it comes to embracing Bitcoin, that's the feeling I get.

I don't know if that's accurate, but in the United States, I mean, I'm curious, do you think that it starts to become a politically untenable position to be anti Bitcoin? You've already seen, you know, like it seems that Elizabeth Warren doesn't have many people in her corner these days in her anti her anti crypto army seems to have had some attrition, let's say. Do you think that becomes a pretty untenable position to be vocally anti Bitcoin in the years to come?

Or are we going to see a renewed surge depending on who is in office? Does that even make a difference? I mean, it sounds crude, but honestly, I think the dominant variable in that question is price. It just is. Right. When, when the total market cap of Bitcoin is, I know that market cap, you know, the term doesn't necessarily, but the total, the total valuation, say a present, whatever price is, say a hundred billion, like, politicians don't really care that much. Right.

It's like a niche thing. Right. When it's a trillion, some people start to pay attention. Right. Now it's like, oh, this is like a serious thing. Like one, there's lots of campaign donations I can get out of it. There's potential for, you know, constituencies in my district to have like a material portion of their wealth now exposed to this thing. It just matters more. And the things that, you know, when something matters more, politicians pay more attention to it.

Right. And so I just think like that's, that's basically the one variable. Right. If I get like, I think that if I get like double or triple or quintuples, then I would expect like a commensurate increase in like, it's, uh, how politicians have to respond to it. Right. And I think to first order though, it's like, you know, Elizabeth, Elizabeth Warren, like her, her basic argument doesn't scale, I think, right? With that, with that, right?

It's kind of, it's a fixed, it's a fixed, um, it's a fixed dynamic. Right. There's like a certain number of people that just fix their attitudes. They just don't like it. You for, you know, all the different canards, right? I don't think that like that's going to scale necessarily as like a political dynamic, but if a lot of Americans hold Bitcoin and Bitcoin is worth five or 10 times as much the next five or 10 years, well, then like the political force is like scales equivalently, right?

Right. In terms of campaign donations, in terms of the number of people that now have serious skin in the game, in terms of making sure the politicians don't f it up. Right. And actually now, and then that sort of, I think that plays out at every different scale. So then the national security community, the folks in leadership have to then treat it now much more seriously because now it becomes a topic of conversation, say, in our economic policy making.

If we, for example, then these things all start to cascade, if we then have to make decisions about becoming much more objective or more structurally positively disposed for Bitcoin, it could be done through official policy, say, the establishment of a strategic Bitcoin reserve, which is now a policy proposal that's been put on the table and considered by a leading presidential candidate.

Well, China has to look at that and be like, oh, well, I didn't have that as a policy question that I have to answer internally in my bureaucratic system. Now it is one that I have to answer. Now there has to be a bunch of white papers being written in reports and even intelligence collection being tasked to figure out, are the Americans serious about this Bitcoin thing? What are they talking about? What would that mean?

And then a bunch of policy people and intelligence officials and people inside the Chinese system have to start moving, start to doing stuff. And then, okay, well, then that's a zero to one thing. It was a question maybe they were not really answering at a serious level and now it is. And then that just established a predicate for then whatever might come next. And I just think that's just the flywheel that we're on or that kind of that staircase that we're climbing.

But I don't expect the opponents of Bitcoin to just give up their swords and just lay down and defeat. I don't expect Bitcoin to just stream to the mountaintops in an unopposed victory.

This is not the sort of oppositional ten-day, it's a heightened dynamic for the political force because people that have strong opinions, both Bitcoin maximalists and like the Elizabeth Warren anti-cryptor army, they have the strongest opinions and they're going to make those opinions known on Twitter and in the public sphere. But there's a silent majority of people, including a lot of people that own Bitcoin, that aren't strident about it.

They just want to have to drop their kids off at school and have low taxes and economic growth and have their portfolio, which now includes Bitcoin, not be screwed over by politicians. It's kind of like, you got to model the median voter in a lot of these things and consider the impact of Bitcoin's development on the median voter, who's got other things to care about and Bitcoin is just like tips in a slightly different direction for them.

And so, structurally, I'm very bullish on Bitcoin for a lot of different reasons, both macroeconomic as well as sort of endogenous reasons to the technology and its value proposition. I don't have price predictions by any means, but I think those will translate into policy shifts that will be positive to Bitcoin over the long run.

There are those scenarios that keep me up at night, which are like the, where it all racks in the wrong direction, where we don't get smart and have serious policy debate internally now and some of our adversaries get ahead of it. And some of them say in the Emirates, say the Saudis with China, maybe even the Russians or the Iranians play along on this.

And for many different reasons, maybe they decide to be a bit more aggressive and maybe there's a bunch of other hidden sources of wealth in the world that dump a lot of money into Bitcoin and acquire large positions. And Bitcoin does disruptively monetize in a way that the US government feels is like advantaging the wrong people.

Then you could reach a point where, I wouldn't say they would not be able to take down the network or anything, but there could be a much more hostile stance and national security capabilities could be brought on to target our adversaries positions. And it could get, yeah, that's a scenario I would not like to see happen. But for me, the worst case scenario is where we drop the ball, adversaries pick up the ball and lots of other money that's maybe in the middle rolls in.

And the worst possible position is there's a phone call from somebody who's just looking at the Bitcoin chart and it's like, this thing just gapped up to whatever over and night. What the hell? What's going on? And the first thing policymakers and national leaders don't want to have happen is something they don't understand, something that they can't, they weren't prepared for that seems problematic for them.

If we have a lot of Bitcoin, both as a country as well as our companies, then if that would happen, you'd be like, listen, boss, the average net worth of every American just went up, nothing to worry about. We're good. Go back to sleep. But if we don't have that, we've moved it all offshore or a lot of its adoption is taking place offshore and then that happens, then it's like, uh-oh, we've got a problem. The bad guys, the bad people, they're making lots of money.

And this could be a vote of no confidence in the dollar system. And we need to make that stop. We need to use other instruments of national power to slow that down and come up with solutions for me, NSA. Come back to me with some courses of action that I can approve that are just about making this green line on the chart turn into a red line. That's my tasking to you, figure out how to do that. I would not want it to have that happen.

And I think that's what, again, I don't think it's existential, by any means, but it's just like there's a better way. If we can steer the better way, that's a better way. And I certainly wouldn't want a bunch of Emirati sheiks and corrupt CCP officials and offshore oligarchs get really wealthy as Bitcoin monetized. I think some of them will, obviously. That's just the nature of the beast. A lot of people make money when gold goes up or when Apple stock goes up, including a lot of bad people.

It's just the nature of global capitalism. But I want more, especially more non-oligarchy Americans to hold Bitcoin. Just I think it's better if more people hold it. It seems like a pretty simple objective. I would agree with that. Do you think that the percentages and risks, does the risk of that happening decrease? Has it already perhaps decreased meaningfully with Bitcoin ETFs?

Even though that's something that a lot of Bitcoiners are kind of leery about, because it's like, okay, that's a lot of, first of all, yes, it's paper Bitcoin. Yes. No, you do not hold your own keys. Acknowledged. Does the risk profile of potentially a really negative US reaction to Bitcoin decrease the more institutional American buy-in there is to this? Oh, yeah. That scenario I just painted was sort of the scenario I had painted for somebody like four, five years ago, right?

As like what, if I had to paint like negative risk scenarios for Bitcoin from a national security perspective, that would be like one of them.

I think that scenario has been dramatically de-risked, especially not just the ETF, but a whole bunch of other kind of more institutional, obviously the micro strategy stuff and more the institutional, the more pension funds hold some of it, college endowments, these are all just pieces of the system then that will go like, wait a second, bro, no, whatever you're cooking up over there, kill it. This is my money, your effing with. That's just it. That's how you neuter any of those scenarios.

I wouldn't say they're, again, it's a curve that's coming down. It's not zero and everything's every zero. This is probably why also Bitcoin's present price essentially is discounting all that future uncertainty. And so it's not a fully rational market where all this information is being completely priced in. But that's why I think, at least on a structural basis, these things do tend to de-risk those scenarios. But yeah, maybe it's like people think, call me a bear, whatever.

My whole life is thinking about war and cyber attacks and disaster scenarios. This is professionally psychological. I always think about what's the worst case scenario. It'd be great if Bitcoin just seamlessly monetizes to millions of dollars per Bitcoin. Great. That's fine. That scenario happens. I have nothing to worry about. It's not even a scenario worth really thinking about. But it's likely going to be more of a messy journey there. I just don't think it's going to be a...

There's a scenario where Bitcoin ends up at 5 million, say, in 20 years. And that happens in an orderly process with mini bull runs, whatever, along the way. But it seems natural that it got there over a long period of time. And then there's a scenario where it's just a boom. That usually means something else is happening in the world that's not great, where there's other sorts of chaos, war, financial issues, hyperinflation. That usually is an indicator that the system has had a heart attack.

And it's going through some sort of convulsion. And so it's great. Yeah, Bitcoin is high. But now I've got to worry about what else is happening besides the chart. That matters a lot more to life and survival. So it's like, OK, this is not just the number. It's the endogenous system, the other systems that this is now an indicator of. So I think that... Yeah, it's just a relatively novel thing. So a lot of policymakers don't really understand how to think about it.

And honestly, there's lots of existing systems that some would win. BlackRock is trying to make themselves a winner there. They're all in on tokenization. That's their whole thing. That's going to be the thing. BIS is all about tokenization, Project Agora. People think that Bitcoin... I think there's a realistic scenario here that Bitcoin monetizes beyond the wildest dreams of the early cypher punks.

And yet the existing systems of power and financial crony capitalism continue to dominate the global system. I think you could have this kind of puric victory from an ideological sense, that, oh, Bitcoin is going to defeat the banks and the kind of Occupy Wall Street idea, the crony capital system will be kind of... It'll be destroyed from within. I don't know, man.

I could see a scenario where Bitcoin quote wins and nothing really changes in terms of the structures of power that dominate most people's lives. And that's why I think it's like in terms of Bitcoin as a bundle of technologies that people should focus on. Not crypto technologies, but privacy and pro individual technologies.

Like AI that you can self-host and not send all your data out to some giga cluster, that you have a self-hosted wallet that you can reliably trust, that you can make decisions about your own finances and your own life in a way that doesn't entirely turn you into just like a neo-feudal digital surf. These are just things I think we should invest in. And the US government even invested a lot of privacy for preserving technologies.

They invented Tor for intelligence purposes, the Onion Router Network. And that was used for lots of bad people. Lots of child predators and people doing horrific things have taken advantage of that. The US government though is like it's still maybe better to have such a thing exist to allow communications into authoritarian internet systems. A lot of people get access to information.

Generally speaking, if you believe in your system that an open system is better than a closed system, that democracy and liberalism is better than authoritarian totalitarianism. You just believe those things are better and more effective over time than promoting technologies that are aligned with that. Yeah, there's going to be bad guys using them, but you have to have some confidence that your system is better, that this is just going to work better.

I detect a sense of a crisis of confidence in our elites now, but they don't actually get this tendency towards more autocratic impulses. It's not out of some malign master plan. I think it's just out of this anxiety that actually China's authoritarianism actually just works better. What if the bet on democracy was just a bad bet? And that in fact, their commitment to democracy wasn't really out of any sort of moral or political ethos.

It was just a convenient political economic temporary deal after World War II to appease the peasants and bootstrap a middle class. And then once we did that, we no longer care. I think there's some people actually think about that. They're just like, what time to rug pull democracy and just go toe to toe with China's authoritarianism with a more techno, Western authoritarianism. I would oppose that. And I think that quite is an important piece of building a technological stack to oppose that.

But I don't think it's the only thing. You need to invest actually in privacy-preserving technologies. And parts of the government actually say this is their mission, like both State Department, Human Rights, as well as other parts of the government actually invest in and subsidize development of what they call privacy-preserving technologies.

Because they recognize that they don't want to have their citizens be just plugged into this capitalist surveillance techno-penopticon where everything they do say and buy is just consumed by these AI engines to exploit them for profit. Yeah. You had a great quote in a, it was a 2022 report that you did for Bitcoin Policy Institute with David Sell, which was, a modern authoritarian regime is only as strong as its control over information and capital.

And I thought that was just a really succinct point there. And again, I have a lot of hope because Bitcoin exists and because there are these other freedom technologies available. And I hope that policymakers do choose that side of things because obviously there's polls in both directions. But we've run for a while. I want to be conscious of your time here. Do you have time for one more completely unrelated to anything question, which is a short one? Yeah, I got like one more minute.

Okay. What are you reading right now? And would you recommend it? I am reading, oh, let me look at my shelf here. There's a few things. So fiction book called Phantom Orbit by David Ignatius. It's good. It's kind of a spy thriller about, you know, China space, you know, a good sort of just like beach read that I'm now catching up on. In terms of nonfiction. So actually a book I just read is called Why by Philip Goff. He's a philosopher.

Really interesting perspective kind of on some of these like more fun questions like is their purpose to the universe? On the other shelf. I think. I've waited 20 books here. Oh yeah. So there's a there's a good book called Nuclear War by Annie Jacobson. I was just finishing that up about kind of the structure of the nuclear kind of system that we've constructed. It's a bit terrifying. And she has really good sources for that book. So yeah, those are some good ones.

If you want like a good UAP book that I always recommend folks, I read it a while ago, but I reread it like pretty often. It's called The Cryptos Conundrum. And that's by former senior CIA officer. He actually wrote it before this whole UAP thing became a thing like back in like 2011, or something like that. And it's his only book. It's got a great sort of weird sci-fi plot. I recommend it. There's some. I just think it's it's worth a read, I would say.

Yeah. He had a very interesting career in the CIA. It's I recommend it. I'm going to have to check that out. Well, Matthew, I know you know you got to run. Thank you for taking this time. Bitcoin is scarce, but Bitcoin podcasts are abundant. So thank you for sharing your scarce time with me on this one. I'll link Bitcoin Policy Institute and also your Twitter and the show notes. Really, thanks so much for your time. Thanks, I'm a man. Next time.

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