Episode 102: Transcript
Episode 102: Money is a fantasy, with Stacy-Marie Ishmael
Transcription by Keffy
Annalee: [00:00:00] Welcome to Our Opinions Are Correct, a podcast about science fiction and everything else. I'm Annalee Newitz. I'm a science journalist who writes science fiction. My latest book is called Four Lost Cities: A Secret History of the Urban Age.
Charlie Jane: [00:00:15] And I'm Charlie Jane Anders. I'm a science fiction writer and I think a lot about science. I'm the author of a young adult trilogy. The first book, Victories Greater Than Death is out in paperback now. The second book Dreams Bigger Than Heartbreak comes out on April 5.
Annalee: [00:00:31] It's so awesome.
Charlie Jane: [00:00:32] Aww.
Annalee: [00:00:33] All right. So, money. You may not understand it, and you may not like it, but you need it. So today we're going to talk about a peculiar thing we've noticed about money in science fiction. It's incredibly hard to imagine how money might change and evolve in the future. Generally, we see people in space operas and dystopias using money pretty much the way we do now. I mean, they might use Galactic Credits or tins of SPAM or Meow Meow Beenz instead of dollars or yuan. But the role of money in the economy is pretty much the same. So today we're going to talk about how money might actually change in the future. And later in the show, we'll be joined by Stacy-Marie Ishmael, the managing editor for Crypto at Bloomberg. She's going to help us separate fact from fiction when it comes to the cash of tomorrow.
[00:01:24] And by the way, did you know that this podcast is completely independent because it's supported by people like you using Patreon. So if you become a Patreon supporter of us, you get to make this podcast happen and you get extra essays and reviews, you get to hang out with us in Discord, which we do a lot. We're like in that Discord server probably more than is healthy.
Charlie Jane: [00:01:50] We hang. We hang out.
Annalee: [00:01:50] We hang. So just remember, if you'd like to help out, pay for this podcast to happen, you can find us on patreon.com/ouropinionsarecorrect. All right, here's the show.
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Annalee: [00:02:32] Usually it's pretty easy to find thought experiments about every imaginable weird-ass future in science fiction. I mean, Clifford Simak wrote a book about Earth being invaded by bowling balls. N. K. Jemison wrote a series about a civilization where people control geological processes with their minds. In the Matrix series, humans are batteries for robots who look like squid for some reason. I mean, these are all delightfully off-kilter ideas. And yet, when it comes to money, well, it's just the same old money we have now. Even 400 years in the future, on Star Trek, there are still people who want to hoard it.
Star Trek Clip: [00:03:13] Rob, that lady tells me she misplaced a fat currency pouch.
[00:03:15] Yes, brother.
[00:03:15] And that you found it?
[00:03:16] Yes, brother.
[00:03:17] And that you returned it to her, intact.
[00:03:20] I was dazzled by her beauty.
[00:03:23] You worthless, tiny-eared fool! Don’t you know the first rule of acquisition?
[00:03:26] Yes, brother.
[00:03:28] Then say it.
[00:03:30] Once you have their money, you never give it back.
[00:03:34] Exactly.
Annalee: [00:03:35] That of course, was Quark, the Ferengi bar owner on Star Trek: Deep Space Nine.
Charlie Jane: [00:03:41] Yes, it was.
Annalee: [00:03:42] And he's yelling at his nerdy brother about how to handle money. In fact, the Ferengi’s whole culture is based on these rules of acquisition that have turned capitalism into what kind of sounds like a religion. And I think we get representations like this because it's just so hard to imagine money outside capitalism.
Charlie Jane: [00:04:02] Yeah, in fact, I think it's, in some ways, even harder to imagine how money could change than how capitalism could go away or change because money is just so fundamental to our way of thinking about it. And you know, I mean, thought experiments about money are hard to do. I wrote a story years ago called “Horatius and Clodia” about sentient money—
Annalee: [00:04:22] Love that story.
Charlie Jane: [00:04:22] Money can that can think for itself, that has kind of an element of surveillance built into it so it can track what you're doing. The money itself is tracking what you're doing with it. But the money starts to have opinions and the money starts to have ideas of its own. And, you know, I feel like I don't see that many thought experiments about like, yeah, how money could look different or how it could behave differently.
Annalee: [00:04:44] It's really true. I think that's partly because money is just a really ancient concept. It existed for a long time before capitalism. And if you look at the archaeological record, which I like to do, since I'm a giant archaeology nerd, we can see there's just countless ways that money was used before we had things like central banks and the mass production of commodities. What we see is that money has always stood in for something valuable. It's a symbol. I'm really fascinated by spade money, which is one of the oldest currencies in the world.
Charlie Jane: [00:05:22] Oh, spade money? That sounds amazing. Tell me more about that.
Annalee: [00:05:24] Well, I'm glad you asked. So I got really excited about this, because a new paper came out in Antiquity Magazine about an excavation at an ancient Chinese city, where they discovered a cache of this spade money from roughly 600 BCE. And the coins were discovered not just by themselves, but they were part of a well preserved mint, where they were making the money. They had molds and other tools, and here's what's interesting. Each spade coin is cast in the shape of a 14 centimeter long spade with a really stylized shovel blade, and it's attached to this really carefully crafted hollow handle. And these were ancient coins that existed, basically, during a transitional period between barter and money, when coins were a pretty new concept. However, everybody knew that agricultural tools were valuable. So the shape of their coin literally grew out of an actual thing that people valued and then gradually, over hundreds of years, those spade shapes shrink down and get more abstract and smaller and smaller so that later you might not even recognize that it's a spade. But it comes from this very literal thing.
Charlie Jane: [00:06:40] I love that basically, what it's doing is showing that this is labor in piece of metal form. We did some labor, and that labor was converted into these little pieces of metal. And it’s just so interesting to think about, like how much closer people were to that connection between money and labor back then. So what are some other examples of money in the ancient world.
Annalee: [00:07:02] So another really interesting one, which is also from Asia, comes from the Silk Road, which is just kind of a blanket term for a ton of different trading routes that connected eastern China with the Middle East and Europe and Africa. And these routes were used for almost the entire first millennium CE, probably starting with the Han Dynasty and peaking during the Tang Dynasty, my personal favorite dynasty. But they were also used well into the second millennium. And according to Yale historian, Valerie Hansen, who has written a really awesome book about this, which is just called The Silk Road, the main currency that people used on these trade routes was bolts of simple white silk. So people didn't turn that silk into anything, they just would use a bolt of it for money. So it was kind of a sideline to bartering and it was a kind of currency that, again, like the spade money, had this really strong resemblance to an actual thing that you would use.
Charlie Jane: [00:07:59] Yeah, and you know, of course, we use gold as money and that's also a commodity people will also trade, like bags of rice. It's interesting that people sort of think that barter and money are kind of opposites, or two separate things when they bleed together all the time. And I think that, again, that used to be clearer and easier to understand this sort of very blurry distinction between money and barter.
Annalee: [00:08:22] I think that's really true. And then here's another cool historical example, which is that other parts of the world never used money at all. During the 15th and 16th centuries, we had the highly sophisticated Inca empire in South America along the western coast, and they didn’t use money. They appear to have had a super elaborate system of taxation and resource allocation that was entirely based on food and other agricultural items. So money is a really ancient and widespread concept, but it's not inevitable.
Charlie Jane: [00:08:56] And thinking about how money changed in the past, and how much variation there was in how we used money in the past can kind of help us to think about how money might get different in the future. Right?
Annalee: [00:09:08] Totally. And one theme that we see in a lot of science fiction about money is that it's evolving into a form of surveillance, which you kind of brought up earlier, when you were talking about your story. I mean, just the idea that spending money leaves a data trail and allows people like, I don't know, government officials, or advertisers or just random strangers, to figure out all kinds of things about you based on what you buy. And of course, they know where you are, if you're buying things in person.
Charlie Jane: [00:09:35] Yeah, I was curious, so I did a search. You can actually look at like a lot of scripts for TV episodes online. And so I did a search for just how often the phrase he just used his credit card appears in TV like police procedural shows and other kinds of crime solving shows. Or, she just used her credit card. And that exact sequence of words is used constantly in scripts for shows like Criminal Minds and Law and Order and NCIS, or whatever. That’s how they catch people in a lot of these shows is, “He just used his credit card at a gas station.”
Annalee: [00:10:10] She just used her credit card at the candy store on Fifth and Main and now we can chase her down and bust her.
Charlie Jane: [00:10:15] Exactly. And you know, it's even Torchwood. And they do it once in Supernatural. It's just a beloved trope and it's one that I think we don't notice after a while, because it's so pervasive.
Annalee: [00:10:26] Yeah and it's also part of the real world. I mean, it has been for a while. Authorities have been able to track people using credit card purchases for decades. And these days with all the data trails we leave online, the process is a lot creepier and it's used by political operatives to target voters as we saw back in 2016, with the Cambridge Analytica operation.
Clip: [00:10:49] All of your interactions, your credit card swipes, web searches, locations, likes, they're all collected in real time into a trillion dollar a year industry.
[00:11:03] The real game changer was Cambridge Analytica, they've worked for the Trump campaign and for the Brexit campaign. They started using information warfare.
[00:11:12] Cambridge Analytica claimed to have 5000 data points on every American voter.
Charlie Jane: [00:11:19] You buy one rainbow sparkle Twilight toothbrush one time and you see ads for that for the rest of your life everywhere you go on the internet. I know it's like amazing.
Annalee: [00:11:28] Fucking rainbow sparkle ads. They’re just ruining my life.
Charlie Jane: [00:11:32] They're actually making my life kind of delightful. There are things where I'm like, I'm really glad I bought this random ass thing because now I get to look at pictures of it on every website I go to for the next year.
Annalee: [00:11:42] I think this is like a big part of why I shop at TomboyX, which by the way this is not spon, I really do shop there. But also now I get like these great ads of like cute NBs in underwear all around The Washington Post.
Charlie Jane: [00:11:57] That does sound rough.
Annalee: [00:11:56] Yeah, it is. It's a tough life. So this is also where another kind of futuristic money comes in, which is cryptocurrency. I'm sure you've heard about Bitcoin, and Eth and all the other coins that live on the blockchain, Dogecoin, for example. I actually met the guy who created Dogecoin, one time when we were buying pot in the park. Anyway, they have spawned endless debates about NFTs and Web 3 and all of these new financial technologies that are coming along. And we're going to be talking about those in a minute. But the point is that cryptocurrencies are supposed to be anonymous cash, and they were invented in part as a response to the way that money can be used to track us.
Charlie Jane: [00:12:46] And cryptocurrency and you know, it's gotten incredibly complicated and kind of scammy so quickly and half the time it really does feel like it's just kind of a fantasy. And like, it's a piece of science fiction that people have kind of manifested in reality, which is luring people into investing a lot of their money. And you know, it's really weird to think where it's gonna go.
Annalee: [00:13:07] You really need an expert to figure it all out, which is why, coming up next, we'll be talking to Stacy-Marie Ishmael who knows a lot about crypto and its discontents.
[00:13:18] OOAC theme music plays: Drums with a bass drop and more science fictional bells and percussion.
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Annalee: [00:13:37] For a decade, DNA Today has brought you the voices of genetic pioneers. There are over 170 episodes, so plenty to keep you entertained and updated about genetic news.
Charlie Jane: [00:13:47] DNA Today is hosted by genetics expert Kira Dineen, who helps you understand genetic complexities,
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Annalee: [00:14:09] Stacy-Marie Ishmael is the managing editor for crypto at Bloomberg News where she also writes Bloomberg’s crypto newsletter, which is an awesome resource. She's also Chair of the Foundation Board of the Craig Newmark Graduate School of Journalism. Welcome, Stacy.
Stacy-Marie: [00:14:23] Hi. Thanks for having me.
Annalee: [00:14:25] Yeah. Thanks for joining us to solve all the mysteries related to crypto.
Stacy-Marie: [00:14:29] Yeah, super straightforward. Absolutely.
Annalee: [00:14:33] So I wanted to start by just breaking down a few terms. Just if you can, tell us what is a cryptocurrency and also why do people think this is the future of money?
Stacy-Marie: [00:14:46] Yeah, we're starting really straightforward questions, awesome.
Annalee: [00:14:47] Just the hugest question.
Stacy-Marie: [00:14:51] Fantastic. Fantastic. So I've always wondered how to start when somebody's like, “What is cryptocurrency?” Because it's almost the same as asking someone, “What is money?” They're like, well…
Annalee: [00:15:04] Let me take you back six thousand years.
Stacy-Marie: [00:15:07] Right. There was once something called barter and then we moved on. But I think when people ask this question, I try to give them a couple of different ways of looking at this. The first is the technical, right, which is the idea of a cryptocurrency is that it's programmable money that comes or originates not from a federal reserve, or a rock or a shell, or a piece of paper that people have agreed has value. But from computers, and sometimes people solving complex mathematical problems, and arriving at a solution that then leads to tada, you have one or some fraction of a Bitcoin. There are other ways of making crypto currencies and tokens, and we can talk about that, you’ll sometimes hear the word mining or minting in the context of non-fungible tokens. But fundamentally, the idea is, you have to do something hard to bring this asset into the world. And that the point of crypto, and when I'm talking about this, I mean, specifically the original, which is Bitcoin, is that it is finite in supply and that it is theoretically free of the influence of governments, of traditional banks, of anyone that would try to impose a different logic or order, exogenously on this specific area and asset class.
[00:16:50] And that kind of libertarian, you know, down with the man core is really important to understanding the other parts of what I tried to say, which is that it's also a belief system, in some cases, right? It's the idea that instead of aligning your literal and metaphorical fortunes with systems that you don't necessarily have full visibility into or control over or in some cases, even awareness of, crypto allows you to be more in control of your own destiny. It allows you to have a clearer understanding of which way is up and which way is down, because you can mechanically work back and see how you arrived at this Bitcoin or you can see how, like what the provenance of the various transactions were before it found its way to you. And some people find that really attractive because it aligns with their fundamental mistrust of everything organized.
Charlie Jane: [00:17:52] Right, so what gets me about crypto is that obviously, all currencies are speculative, to some extent. I think George Soros made a bunch of his money by betting against some European currencies, and they tanked and he shorted them or whatever. But with Bitcoin, it feels like the line between speculative investment and currency is super blurred. And like, I wouldn't necessarily take out a contract where I was like, you can pay me half a Bitcoin a month because I don't know how much that would be, a year from now. How much I'd be getting paid. So why is it so hard to tell whether it's a currency or a speculative investment?
Stacy-Marie: [00:18:29] You only ask the big questions on this podcast. Because there is a difference between, in the crypto sense, between like a store of value and a medium of exchange. Right? And not to get kind of too heady about it but in the capital and money context, you would want those things to coexist, right? Because you sort of feel like, well, to your point, if I don't know how much this thing is going to be worth in some foreseeable amount of time, it makes me more stressed about using it as a medium of exchange, because I might be dramatically overpaying for something right now or dramatically underpaying to the benefits of the person on the other end of this transaction, which is why we have have such an intense conversation about inflation happening at this particular moment, because inflation undermines the store of value element of money.
[00:19:37] So that volatility is really challenging from the using Bitcoin as a medium of exchange situation, but some people believe that the volatility isn't as much of a problem of the store of value, because they expect it to go up. And they're like, well, it's going down right now but it will go up eventually. There’s a fundamental bullishness to use the market’s phrase in the perspective of folks who would call themselves you know, Bitcoin maximalists. People who believe that intrinsically, the only way that this currency could ever move is, as to use the phrase, “To the moon.”
Annalee: [00:20:21] So the idea is that it's cash that keeps getting more valuable. So it's okay to use it as cash because it will only ever become a kind of benefit to the person who receives it.
Stacy-Marie: [00:20:31] Or, you should maybe never use it as cash because it will only get more valuable.
Annalee: [00:20:35] Right, so you use it to hold your cash.
Charlie Jane: [00:20:38] You want to hold onto it.
Stacy-Marie: [00:20:38] Yeah, HODL.
Annalee: [00:20:38] And then when you want to use cash, you convert it back into some kind of national currency.
Stacy-Marie: [00:20:43] Right.
Annalee: [00:20:44] So basically it's one of those things where if you held down a Bitcoin believer and smacked them and said, is it a currency or a commodity? They'd be like, “It’s both!”
Stacy-Marie: [00:20:55] Right. I mean, not that we propose violence, but—
Annalee: [00:21:00] I was sort of…
Charlie Jane: [00:21:00] This is all consensual.
Annalee: [00:21:01] Yeah. You would just hold them down and gently ask them.
Charlie Jane: [00:21:08] They’ve consented to it.
Stacy-Marie: [00:21:09] They’ll be like, I will give you a Bitcoin if you answer this question for me, yes.
Annalee: [00:21:15] So we hear a lot about this phrase, Web 3, which was supposedly coined by Gavin Wood, who is one of the cofounders of Ethereum, and he was using it just to sort of talk about the future of the web, once you add blockchain to it. It's also supposed to be like the sequel to web 2.0, which is also kind of a meaningless phrase for just like, what happens to the web, when you add social to it, like suddenly now there's Facebook and Google. So here we are, we're supposedly in this thing called Web 3, that all these investors are talking about, all these media pundits are talking about. What do you think about it? Can you tell us a little bit about Web 3 and whether it's actually something that's going to become real?
Stacy-Marie: [00:21:56] I have a perspective that is, if a bunch of VCs are trying to tell you that this is the thing, you should always be like, “How much money have you invested in making me believe that this is the thing?” And when it comes to Web 3, the answer is like, not a small amount of money. I've been on the internet for a long time, as have both of you. Right? So we remember a pre-AJAX world. And, you know, web 0.5 to 1 as it were. And the interesting thing about that time on the internet was those terms came about to describe things that existed and that needed definitional clarity.
Charlie Jane: [00:22:41] Right. Sorry. When you say pre-AJAX world, can you just explain for our listeners what that means?
Stacy-Marie: [00:22:47] Sure. So from a design perspective, a lot of what made Web 2 kind of cute was like rounded corners and things that you could render in the browser without having… You could suddenly upvote or downvote, something without having the page totally refresh. Or think about email and how mind blowing it was that you could save something, add a label and nothing flickered the whole time. There wasn't like a call that made your browser lock up and it took 30 seconds because you were on dial up for something to happen.
Charlie Jane: [00:23:24] Oh my God.
Annalee: [00:23:24] Yeah.
Charlie Jane: [00:23:25] I'm getting dial up PTSD, now.
Annalee: [00:23:26] So it's like, basically, just AJAX is the technology that lets you have interactive web pages instead of what we had in the ‘90s, where it was like reload, reload, aah!
Stacy-Marie: [00:23:39] 100%. And so we started talking about Web 2.0 because there was stuff happening all over the place, because we were like, well, we need a way to describe this that makes sense. With Web 3, what I'm fascinated by is like, we want these things to happen. And we're trying to accelerate that by giving it a catchy moniker.
Annalee: [00:24:00] So it's, it sounds like you're saying that with web 2.0, it was a thing that had happened, and we put a name on it, whereas this is the thing we hope will happen so we’re putting a name on it?v
Stacy-Marie: [00:24:08] For some value [crosstalk] to be clear. [Crosstalk] invested significant, hundreds of millions of dollars in making this thing happen. I'm here as a chronicler.
Annalee: [00:24:19] But what is it?
Stacy-Marie: [00:24:21] So the what, in theory, according to the folks who are deeply invested, is a couple of things. The first is the idea that if web 2 was about unleashing your creativity, you could be a photographer because you had Flickr, you could be an influencer or whatever those things were. Web 3 is like and now you'll make money. So you could be a photographer and get paid because you can issue that photograph as a so-called NFT or non fungible token and people will pay you $75 million. Or you could be an author and instead of going through Kickstarter or somebody else to try to crowd fund your book or your reporting, or whatever those things are, you could sort of do it yourself using crypto-based crowdfunding, which is fundamentally the same, but also different because blockchain is involved. And so it's just, it's the notion that people will be renumerated based on their direct participation, rather than dis-intermediated away from their labor. It's like a strangely Marxist argument, almost.
Charlie Jane: [00:25:35] The workers will control the means of production!
Stacy-Marie: [00:25:38] Yes, exactly.
Annalee: [00:25:39] The means of digital reproduction.
Stacy-Marie: [00:25:40] The means that digital reproduction, which are scarce, but also not scarce, but also expensive.
Annalee: [00:25:46] Yeah. And the idea is like we're getting away from central banks, we're getting away from things like PayPal, any number of intermediaries that come between you giving me money for my NFT.
Stacy-Marie: [00:26:00] Right, or my labor, right, as the case is, it's like I or, you know, I use the word labor specifically because one of the bigger concepts that's being thrown around in Web 3, and sometimes also in the metaverse, which is like, Web 3, but VR.
Charlie Jane: [00:26:16] Web 3, but have a headset.
Annalee: [00:26:18] Faceputer.
Stacy-Marie: [00:26:21] Totally, is this idea of gamify everything. As opposed to, which I, as a person who plays video games, I want to be very clear, is not the same thing as make everything a game. There's a fundamental distinction between using game mechanics and creating an experience that is playful and interesting and absorbing and immersive and all the things that make great games great. But in one of the concepts in that’s sometimes associated with Web 3, and with crypto is this idea of play to earn, you sign up for a video game, and you are really good.
[00:27:01] So imagine if Sims, The Sims, which I spent too much of my childhood playing, had a Web 3 mechanic, what that would look like is, instead of you making a reproduction of the Jennifer Lopez dress, or building an incredible house and putting that up on a forum somewhere for somebody to download, and all you get is like an up vote and a thank you, you could earn in-game currency.
Charlie Jane: [00:27:31] Right.
Stacy-Marie: [00:27:31] And that in-game currency was then transferable out of the game into either other games, or into fiat currency, or into another token associated with crypto in some way. And so that now your labor in this game context could be income generating for you. That’s the fundamental premise of play to earn, which is like, why play for free when you could play for crypto?
Annalee: [00:28:06] So it's basically what if, WOW gold became Bitcoin, like, what if you could easily convert it into something else?
Stacy-Marie: [00:28:12] Right.
Charlie Jane: [00:28:14] Yeah, I feel like they tried to do that in Second Life, which was a VR world.
Annalee: [00:28:17] Yeah.
Stacy-Marie: [00:28:17] [Crosstalk] Well, Second Life wasn't fully VR though.
Charlie Jane: [00:28:21] It was a virtual…
Stacy-Marie: [00:28:23] It was immersive.
Annalee: [00:28:25] You didn’t need headsets.
Charlie Jane: [00:28:25] It was so immersive that you could just contain it on your computer screen and be immersed through the pixels. Yeah. Second Life a very kind of low interaction or low immersive virtual world had a thing where like, if you designed a new dress or something that somebody wants to put on their characters, you can get—
Annalee: [00:28:44] Linden bucks.
Stacy-Marie: [00:28:44] You got Linden bucks.
Charlie Jane: [00:28:44] You could get Linden bucks. Yeah, and I remember people being excited about that for like three seconds.
Stacy-Marie: [00:28:48] There were Linden millionaires.
Charlie Jane: [00:28:50] There was also a Linden billionaire.
Annalee: [00:28:52] Linden real estate speculators.
Charlie Jane: [00:28:53] Oh my God.
Stacy-Marie: [00:28:53] Yeah, 100%. That was a wild time.
Charlie Jane: [00:28:56] That was like the proto. But okay, so, I want to ask you—
Annalee: [00:28:59] But wait, was that the prototype for Web 3, would you say? In a sense?
Stacy-Marie: [00:29:03] Ooh. I would say that immersive worlds like Second Life. Like Fortnite, like Roblox, like Minecraft, are a version of what some folks would like the metaverse to be, which is to say places in which your virtual self can have full expressions of things you would do in your quote, unquote, “real life.” You go to a concert, you hang out with friends, you buy a cool outfit, and you show that outfit off. You create art, you make music, you get married, which was the thing people used to do in Second Life all the time.
Annalee: [00:29:50] Yep.
Charlie Jane: [00:29:50] Oh, yeah.
Stacy-Marie: [00:29:52] And that is one version of the metaverse. Then there is also what I would describe as the corporate metaverse, which is, you're in a conference room with a whiteboard. But you're disembodied because you're having a meeting. Right? And, like, sure. Why not? That's also an option. But the tension between those two things is, why are you there? Right. And I think that, the Second Life, Roblox, Minecraft, Fortnite thing is for a lot of people, they're there because it's fun, and it's enjoyable, and it's where their friends are. And there's another version of this where it's like, you're there because you're working.
[00:30:38] And for me, concepts like play to earn are very much in the working category. Like, as soon as you are monetizing your labor, you have a job, right? And it's not always fun. And I think the attempt to sell some of these concepts by using the language of things that are fun, is something I try in my own reporting to like, tease back out and say, hang on a minute, here's how these things are different.
Charlie Jane: [00:31:05] Right. And of course, you know, we've all, many of us have experienced that thing of like, once you're getting paid for something that you were doing for fun, it becomes your job, and you still enjoy doing it, but it's your job. So I wanted to ask about the question, the idea of scarcity, because I feel like one of the things that comes up a lot in these conversations, like you said at the beginning that Bitcoin is deliberately limited in its number, like there's a limited number of Bitcoins because they have to be produced in this really complicated way. And like I see people talking about NFTs where they say the point is to ensure scarcity of ownership. And that's why you can get millions of dollars for an NFT.
Stacy-Marie: [00:31:39] Yeah, that was an interesting thread.
Charlie Jane: [00:31:41] Why is scarcity such an important concept? And is there… why do we need artificial scarcity?
Stacy-Marie: [00:31:48] Like are we reading like Rousseau right now?
[00:31:54] Let's talk about property rights. So with NFTs, there are a few things at play. And one is like, my colleagues at Bloomberg published a story on February 10th, that had what I thought was a really good headline, which is, you know, for all of the mainstream attention on NFTs they represent less than 1% of all of the crypto market. And I think it's important to put that into context. Because when you see somebody say I bought this photo, I bought this picture of an ape and it cost me $250,000. That's very confusing, right?
Charlie Jane: [00:32:33] It is. It is.
Stacy-Marie: [00:32:36] Sometimes I have to write sentences or edit sentences and I'm like, huh. Wild. And you know, somebody paid $250,000 for a digital representation of an illustration is okay, interesting. But there's like no reason that that's necessarily crypto-specific. And what do I mean by that? I mean, people buy art all the time, right? People will pay for experiences, all the time, people will buy a print of a piece of fine art all the time, or the knockoff of an outfit that's still almost as expensive as the outfit itself. Like we human beings make interesting transactional decisions on the basis of exclusivity, a sense of elitism, a sense of access, constantly. And I think it's important to emphasize that when it comes down to NFTs, the scarcity isn't only about nobody else can own this, because that is IP lawyers have strong feelings about whether that's true. But it's also about very few people can afford to own these kinds of things right now. Right? And there is a country club. You know, if you have to ask how expensive this was, you can't afford it dynamic to a lot of this conversation that again, gets conflated with this idea of digital scarcity, because frankly, there's no such thing as digital scarcity, right?
Charlie Jane: [00:34:05] Right.
Stacy-Marie: [00:34:05] Pixels are endlessly reproducible. And a couple of weeks back, there was a whole thing on crypto about the fact that someone had effectively made like a Pirate Bay for NFTs. It was low key genius, because it tested the idea of okay, you all are saying that the value of these things comes despite their reproducibility. And so if they are infinitely reproducible, if I'm just going to scrape the major exchanges and platforms where these are, they should still be valuable to you. Right? Because like you're getting value from it for different reasons. And it's like there were heads exploding on either side of this ideological divide. But I do think it was a useful example of the meaninglessness of an argument in a digital context that says the point here is scarcity. I think I think there are different ways of talking about scarcity. But anything involving pixels like that, that gets a little bit strange.
Annalee: [00:35:09] Yeah, it's funny because I feel like here in the States, we hear a lot about NFTs as being kind of like the new use case for crypto, or for Web 3. And I'm wondering if you can talk a little bit about what crypto is being used for in other countries. Is it also kind of this commodity market? Or is it something else?
Stacy-Marie: [00:35:34] Lots of people are looking for the killer app for crypto right now. And I think that NFTs are certainly the killer app for crypto PR at the moment. Because they're everywhere, right? You know, Paris Hilton, Snoop Dogg, Eminem, Jimmy Fallon, or like Justin Bieber. I think Gwyneth Paltrow, I would have to fact check that. But…
Annalee: [00:36:02] There’s got to be a GOOP coin.
Stacy-Marie: [00:36:05] You know, there might well be. And if there isn't, she might well [crosstalk]. It's like, very famous people, sort of mainstream celebrities are like, oh, yeah, check out my NFT collection. Paris Hilton is one of the savviest people in this space. Because she has understood for a long time how to make the internet work for you. Right. And she realized where a trend was going. And she jumped on it and is monetizing it effectively, and is getting a lot of attention and is building businesses around it, because that is a thing the Paris Hilton is probably uniquely capable of doing relative to other celebrities of her generation.
[00:36:50] But that doesn't mean that your average person is going to benefit from this in any way, right? Whereas other arguments in favor of crypto or other arguments that are like this is actually the killer use case for crypto might be things like being able to transfer money more cheaply than if you use, say, a MoneyGram service, for instance? Because it's like, well, actually, what you could do is you buy, say Bitcoin, and the person on the other end of that transaction has a Bitcoin wallet, and it is free to very inexpensive to transfer Bitcoin between two wallets. As opposed to you know, you try to transfer, say, I'm from Trinidad, and if I want to send money home, and I want to send, say, $500, I'm gonna pay a not small percentage of that in fees to MoneyGram.
[00:37:47] And actually, the company formerly known as Facebook, now known as Meta is working on a pilot program to do to do just that, that they want to figure out how to use crypto and the blockchain to send money cheaply, or relatively cost effectively between the US and Guatemala.
Annalee: [00:38:08] Hmm.
Charlie Jane: [00:38:08] Huh.
Annalee: [00:38:10] So is that because there's a specific labor relationship between the US and Guatemala or just they picked Guatemala because that just seemed like a good place to try it?
Stacy-Marie: [00:38:22] I am not sure. I mean, that that came out of a much more complex set of work that Facebook was trying to do in crypto around, like they were trying to make their own cryptocurrency for a while.
Annalee: [00:38:32] I remember that.
Stacy-Marie: [00:38:32] And so yes. So this is a very scaled down version of some of their original ambitions. But it is absolutely true that remittances, as a use case is massive, right? They're like hundreds and hundreds and hundreds of millions of dollars going back and forth between people all over the world all the time. And it is not always straightforward to do that. It is also true, that a less and less useful, but once upon a time very useful, killer app for cryptocurrencies was money laundering.
Charlie Jane: [00:39:12] Right.
Stacy-Marie: [00:39:12] And ransomware. And you know, so you would hear things like hackers disable all of the computers at this hospital and refuse to give them back unless they pay X Bitcoin, whatever those things are. An interesting thing happened recently, which is that the Department of Justice was able to seize $3.6 billion worth of Bitcoin that had been, and this is the allegation against to two New Yorkers, that these two New Yorkers were accused of trying to launder that Bitcoin that had originally been stolen in a hack in 2016.
Annalee: [00:39:54] And some of that money, I would like to point out was used to create the online persona of Razzlekhan.
Stacy-Marie: [00:40:00] I mean, truly.
Annalee: [00:40:02] The rapper.
Stacy-Marie: [00:40:03] I mean, truly, strong recommend Googling Razzlekhan.
Annalee: [00:40:07] Yeah, we'll put a link to that in the show notes. This was one of the scammers who somehow is laundering these Bitcoins, used some of it to create these incredibly, terrifyingly bad rap videos.
Stacy-Marie: [00:40:19] Yes. So these two folks are accused of doing these things. And for me, the most interesting thing was like, huh, they found them.
Annalee: [00:40:27] Yes.
Charlie Jane: [00:40:28] Yeah, I mean, that is impressive that they actually were able to find them. And like, kind of, belies the idea that it can’t be tracked.
Stacy-Marie: [00:40:33] Because it turns out. Exactly. It's actually very hard to launder crypto because of one of the other supposed killer apps of the blockchain, which is immutability and transparency, right. And just to go back into definitions for a second, you can think of a blockchain or the idea of what's sometimes called distributed ledger technology, as like infinite notebooks. So you write something down, or you and somebody else write something down, you agree that this is canon. This is the canonical version of events, this is exactly what happened. And then you would like photocopy that notebook 100,000 times, and distribute those notebooks to other participants in this ecosystem, and come up with a consensus mechanism that's like, if we want to change the record of what happened, a vast majority of us have to agree. And if that majority of us have to agree, then history stands as it was.
[00:41:41] And cool, you know, and it’s, as a concept, very attractive to people who think about like compliance and record keeping, and who are worried about corruption, for example. You could think about certificates of authenticity. There are potentially quite interesting use cases for a distributed ledger. None of those use cases necessarily need that ledger to be based in a cryptographic context. But replicability and the transparency of that replication and the immutability of that replication is very interesting.
[00:42:18] But it also means you could track anything forever. Right? It's like, oh, let me just look back in this notebook that has a record of literally every single transaction ever made in this ecosystem. I notice that on this date, this wallet with this address, transferred this amount of stuff over here, and then that wallet did these things. And if you overlay a highly efficient surveillance state that knows how to deduce patterns and look for information and identify from not very large amounts of anonymized cookies, etc, who somebody on the other side of that is, and then you add to that, and here's a permanent record of everything that ever happened, it suddenly becomes not actually that hard to find where something comes from.
Annalee: [00:43:10] So you're saying the dream of anonymous cash has just been, that dream is fizzling out now?
Stacy-Marie: [00:43:17] It hasn’t fizzled entirely. And because there are, for instance, types of cryptocurrencies that have more privacy features built in. So they will, for example, have some parts of a record. So imagine if like one version of the immutable blockchain is every single piece of metadata associated with that record, there are certain types of cryptos that are like okay, the bits of metadata that could personally identify you are not going to show up.
Annalee: [00:43:47] All right, so we've been talking about all the ins and outs of crypto and web 3 and NFTs. Do you actually think that this is the future of money? And if not, what is it?
Stacy-Marie: [00:44:01] If I knew what the answer was to the future of money, I would be very rich.
Charlie Jane: [00:44:05] Point.
Stacy-Marie: [00:44:06] I would have multiple yachts. I would have libraries. They would be you know. But I think that there is something fundamentally very interesting about an ecosystem that springs up because people don't trust each other. Because that is one of the key origins of crypto, it's the idea that if you can't trust institutions and other people, you should be able to trust the computer. And I was raised not to trust computers, you know, because I was raised to be like computers are only doing the things that people make them do. And so if you don't trust other people, how can you trust computers? So that is, as a mechanism, as an enabling function, as a potentially fascinating technology? I think there are many parts of this that are going to stick around as a value system. I think we have seen a permanent shift in people's attitudes towards norms, people's attitudes towards government, towards systems, towards structures, like lots of people feel let down by lots of things and like, shrug emoji, fair enough.
[00:45:15] And I think even if in five years, none of the NFTs owned by Paris Hilton, etc, are worth anything I do think the idea of, there are other ways to create value and capture value, and there are hopefully other ways for people who participate in an ecosystem to make a living. I hope some of those principles stick around.
Annalee: [00:45:36] Yeah, that's super interesting. Thank you so much for joining us.
Charlie Jane: [00:45:39] Yeah, thank you.
Annalee: [00:45:39] Yeah.
Charlie Jane: [00:45:41] It was super awesome.
Annalee: [00:45:41] Stacy, where can people find your work online?
Stacy-Marie: [00:45:45] I am mostly on the internet. So you can find me on Twitter at @S_M_I. You can find me on Bloomberg.com alongside my great colleagues who are trying to make sense of this incredible universe. And you cannot find me on anything related to crypto because I don't own any coins. So.
Annalee: [00:46:05] Awesome. All right. Well, thanks again.
Charlie Jane: [00:46:07] Thank you so much.
Stacy-Marie: [00:46:07] A pleasure.
[00:46:09] OOAC theme music plays: Drums with a bass drop and more science fictional bells and percussion.
Annalee: [00:46:11] Thank you so much for listening. This has been Our Opinions Are Correct. And remember, you can find us on Patreon patreon.com/ouropinionsarecorrect, or Twitter at @OOACpod. Thank you so much to our amazing producer Veronica Simonetti. Thanks to Women’s Audio Mission, where we recorded this episode and thanks to Chris Palmer for the music. Talk to you later, and if you're a patron we'll see you on Discord. Bye!
Charlie Jane: [00:46:36] Yay, bye!
[00:46:41] OOAC theme music plays: Drums with a bass drop and more science fictional bells and percussion.