On volcanoes, discovering bitcoin, and anarchism.
Peter McCormack is an independent content creator and “some say journalist,” in his own words. He’s the creator of What Bitcoin Did and Defiance TV, both of which he hosts podcasts for, covering topics such as Freedom, Human Rights, Censorship and Bitcoin.
Alex: [00:00:00] Peter McCormack is an independent content creator, and "some say journalist," in his own words. He's the creator of What Bitcoin Did and Defiance TV, both of which he hosts podcasts for covering topics, such as freedom, human rights, censorship and Bitcoin. We talked volcanoes, discovering Bitcoin and anarchism.
Okay, so you're back from El Salvador not too long ago.
Peter: [00:00:28] Yeah, man got back. Oh, what was it? I think I've been back about eight days?
Alex: [00:00:34] So what was the deal over there? I've heard a lot of stories, obviously in the news a bit with, Bitcoin being legal tender over there. So you had to go pay a bit of a visit. Is that right?
Peter: [00:00:44] Yeah, man. Listen, I've been going for-- I think the first time I went was December, 2019. I think it went again in February, 2020, and then we had the lockdown, so I didn't get to go again. But when I first went, there was this little Bitcoin project run by Bitcoin beach by this guy called Michael Peterson.
And it was a very basic project to give kids an opportunity to avoid gangs by giving them jobs to do cleaning up the local river, lifeguarding, and they would get paid in Bitcoin. And then what he did was get some of the local shops to accept Bitcoin and create this little circular economy. And I don't think he had this big grand plan for this to take over El Salvador.
It was just this project that he created and ran, I think mainly just to give kids an alternative and then the chance to make some money. And I couldn't visit because of COVID. So I didn't get to see the project grow cause I would have been back. And then my good buddy from your place, Chicago, he was heading back down there and asked me if I wanted to come with him.
Said there's a big project going on and would I film? And I said, well, of course, Jack I'll come. And then obviously I found out that the government was considering making Bitcoin legal tender. Well, they wanted to, but there was a lot to make it happen, right. So I came, I went down for that and then went to Miami for the conference.
The announcement happened that they were making it legal tender. Then they had the bill and it was passed. So I reached out to one of the president's brothers and said, listen, I'd like to interview the president. Can we do this? He said, yeah. So I flew back in and interviewed the president. It was a wild few weeks dude.
Alex: [00:02:20] Oh, my gosh. No, it's, it's funny. There is a picture I think of you interviewing the president. Not-- obviously, I don't know you too well, personally, but this does seem quite on brand is in, I guess the El Salvadorian like equivalent of the oval office and you're there in a Metallica t-shirt and ripped jeans. Having an interview with the president of El Salvador, which I thought was hysterical.
Peter: [00:02:40] Pissed a few people off. How, how disrespectful you are. Could you not put on a suit? I thought it was disrespect to the-- dude. Listen, I I spoke to the president's brother in advance cause I'd flown in from New York. I didn't have any clean clothes.
And I was trying to get my laundry done and all I had left was a Metallica and a Motley Crue shirt. And I was like, well, I have to go and buy something. So I messaged his brother and said, listen, what's the dress code? It's like, there's no dress code. There's this president. You wear what you want. I was like, well, even a Metallica shirt? Kind of like half joking, and he's like, sure. So when my laundry came back, I was like, I'm going to go wear my Metallica shirt. And this is me. This is who I am. And I've dressed like an idiot for 30 years. I just knew it'd be a cool photo.
Alex: [00:03:19] Of course, of course. And to be fair, he wasn't wearing a tie either. So, you know, maybe he was asking for it.
Peter: [00:03:24] Yeah, he wasn't wearing a tie, man, look, he's such a cool president, you know, he's so in touch with modern life, he, he dresses down.
He campaigned in a backwards baseball cap and a jacket. He understands social media. He understands Bitcoin. He's not part of this old snotty elite that feels like you have to wear a suit and be all formal, all that bullshit. He's in touch. So, you know, all respect to him and yeah, it was great opportunity to meet him.
Alex: [00:03:49] And they're doing a lot of cool stuff done there. I heard this, this sounds like it's something out of a scifi movie, but they're doing Bitcoin mining using volcanoes. Is it like geothermal? What's the deal with that?
Peter: [00:03:59] Yeah, that's the talk. So early stages, but sure. They want to harness the geothermal energy from the volcanoes to provide energy. And from that they could, they could open that up to Bitcoin miners, to co locate there and use some of that power for Bitcoin mining, which makes total sense.
It's it's not cheap to do. Building a mine would be expensive. I mean, I've heard in the region of hundreds of millions, but I don't know exactly how accurate that is. But the point is is that it is a clean form of energy, which is very helpful when there's a lot of the ESG narrative, which is a tech in Bitcoin mining.
And it also brings capital and investment into El Salvador. It will provide jobs and it will further decentralize the Bitcoin mining network. So I'm very excited to hear about it. I've heard about volcano bonds, which sounds super interesting. Let's see. Let's see how this plays out, dude.
Alex: [00:04:57] No, yeah. I mean, it's, it's interesting stuff, especially with all the talk of this inefficiency or the energy expenditure that comes a lot of the time with mining Bitcoin. What's I mean, is it, is it as bad as people say? Cause there's sort of a a bit of a stigma nowadays in terms of just how bad it could be for the environment.
You're comparing it to like world economies, stuff like that. What's your take on the whole thing?
Peter: [00:05:23] Well, I think you have to be a bit nuanced because different people have different opinions. There are people who think we have a climate crisis at the moment, and there's people who think we don't and it tends to be very political. I think if you're more on the liberal left wing side of things, you tend to think there is a climate issue.
And if you're on the right, you tend to think there isn't or is there's less of an issue. Now, anybody that listens to this might fall into one of those categories and say, that's not me, but that's, that's the general kind of feeling I've got. There are many. Experts and scientists who believe there is an issue.
I think there are obvious signals out there. I mean, we have, I saw on the news this morning, Canada, there've been 70 deaths because of record temperatures there essentially suffering a heat wave. We are seeing the effects of bleaching on the coral reefs in the great barrier reef. We are seeing increase in droughts within certain parts of-- I've heard i parts of America and Africa. I'm in the camp that believes we have a changing climate and it's caused by humans. So I believe that. So the next question is where do you apportion blame for this? Do you apportion blame equally and to everyone? Or do you pick on certain people?
Do you pick on the motor car industry? Do you pick on air transport? Do you pick on Bitcoin mining? I think that's, that's where it becomes dangerous territory because you could equally argue. You could have some people argue, well, Bitcoin is total the total unnecessary use of this much energy. And therefore we should ban Bitcoin mining, save the environment, but that's arbitrary because for one person economic freedom might be the most important thing in the world.
So somebody in El Salvador who suffers from the U S currency debasement as a dollarized nation, that might be the most important thing in the world to them. Whereas an international businessman might want their private jet. So to each person is individual. So if there is a climate issue, therefore I think it has to be dealt as a holistic problem.
It has to be treated as a problem with if it's to do with carbon, it has to be treated as a carbon issue. Therefore, we have to look at ways of moving away from carbon sources of energy. So that's my general view. Now you will have some people say, well, you don't want the government to regulate this because if the government regulators is just the way of taxing us, yada, yada.
I understand that argument, but at the same time, who is going to coordinate everyone to ensure that we don't head into a a unrecoverable climate crisis, which I, again, my personal opinion is it's something that can happen. So therefore, if you look at Bitcoin and Bitcoin mining, Bitcoin miners buy energy in the same way, anyone else does they buy either direct from the producers or they buy it from the grid.
So why should we pick on them? And do you know what, if we do have an energy crisis? Just stopping Bitcoin mining is not going to solve that problem. The interesting thing about miners though, is they're constantly looking for the cheapest power. We can find the cheapest power renewable sources, then that's where that's where the mining will go.
And that will be an argument that anti Bitcoiners won't have in their arsenal anymore.
Alex: [00:08:47] Suppose that's the incentive. So where did this all start for you? I mean, kids in my generation, right. I found out about Bitcoin, I guess--
Peter: [00:08:55] How old are you?
Alex: [00:08:55] I'm 21, so, okay. I found out earlier than most, I think I found out in like 2014, I had a buddy who was really, really into it quite early on. I was stupid not to buy any in hindsight, but you know, here we are.
Peter: [00:09:07] We all did that.
Alex: [00:09:07] Yeah, exactly. You know, I think for most of the guys I grew up with Bitcoin was sort of a gateway into things like fake IDs when we were, you know, 17 going on 18, whatever. But I think you've got a pretty interesting story about how this all came about for you.
Peter: [00:09:23] Well, yeah, mine was buying drugs, so it's a similar story to yours. In that I wanted something that isn't legal to buy and I was buying it anyway. And friend of mine messaged me and said, oh, have you heard about this website? The silk road? I was like, no, like, yes, it's a bit like Amazon, but you can buy drugs.
Obviously. I was like, wait, what do you want about? So he came round and he showed me and said, you have to use a single Bitcoin. And. I was like, what's that? And he's like, it's like digital money, but it can't be tracked, which is which isn't entirely true now. And you have to use a an Tor browser to access the website, but basically this is a set of steps you can go through and you can buy high quality drugs from source.
Over the internet. And I was like, brilliant. So I started buying Bitcoin and stopped meeting drug dealers in car parks of supermarkets and started buying online. I don't take drugs anymore by the way, but that was a fun time in my life. And I didn't really get into Bitcoin itself. I didn't really study, I didn't understand it, which is I look back and like, Aw man.
Cause like my first Bitcoin was about $80 or 80 pounds or something and then will happen a few years later, my mom got sick and we wanted to treat her with cannabis oil. That's when I went back to my dad. And I explained to him there's these websites and we bought her a bitcoin and sadly, my mum passed and I was in Ireland and I was just sat there thinking, what am I going to do with my life?
Because I'd quit the advertising industry. And I just didn't know I was going to do with my life and I'd come back on to Coinbase to sell this Bitcoin leftover Bitcoin and there was this other thing called ethereum. And I researched that. And I think I found an article about the blockchain revolution at the time.
I was like, wow, my God, this is like the internet, which I totally missed out on. I could be part of this and, you know, changed my life. Yeah, that's pretty much how I got into it. Yeah. Later that year, I started a podcast and here we are over four years later, I'm talking to you.
Alex: [00:11:18] And here we are. So what's the philosophy look like now? I guess you might fall into the camp of a Bitcoin maximalist which I want you to get into. Maybe you can convince me, I'm more on the Ethereum camp here. The basic sort of philosophy that I have is that the DeFi space right now is basically like nerd land. Like of the people that know what crypto is, of the people that know how it works, of the people that know DeFi exists the number of people that are actually using those types of tools are quite small. And the vast majority is built on. The Ethereum blockchain. I mean, some on Polkadot, other kinds of stuff. But I think sort of the untapped value that's sitting there right now is really something that's going to serve ethereum in the long run.
So I'm curious as to what your sort of thought processes are, what your philosophy is when it comes to that.
Peter: [00:12:05] Yeah. Well look, the thing about Bitcoin is it it's actually quite boring. Quite exciting at the same time. If you compare Bitcoin to ethereum it can seem quite boring, but I think that's one of its ethereum
I don't hate ethereum like some people think. I just don't care about it or don't want to use it. I don't have a purpose for it in my life, but I have a purpose for Bitcoin. It's something I use, but I also, I think Bitcoin has a purpose for the world. And, and, and that's going to sound hyperbolic, but I genuinely believe Bitcoin has a purpose and that can make the world a better place.
By having honest, hard money. I don't think ethereum does that. And what I think ethereum does, is it, it can offer some people a chance to get a different kind of economic freedom than Bitcoin. But I think if ethereum is more about the individual, whereas Bitcoin is more about. The whole of everyone of humanity.
And again, I know it's going to sound hyperbolic, but let me explain it. Yeah. Bitcoin has to do a couple of things and that has to do those things very well. So one of those things, it has to be censorship resistant. And the other thing it has to maintain the 21 million. Bitcoin hard cap. Okay. The two things.
So anyone listening might not know this, but essentially Bitcoin is a form of money and there are only ever going to be 21 million Bitcoin. And why that's important is fiat money, which is dollars pounds, euros, yen. There is no fixed cap on those at any point at all. If the government screws up, they want to steal money.
They can print more. And what that does is that increases the money supply and therefore. Reduces the purchase of power of that money. So let's explain why this is really, really important.
People need to get their head around this. And especially it's much harder if you're in like the U S or the UK, because our inflation levels are so slow. The kind of debasement we go through is quite insidious and it used to be fine. Cause we used to have interest rates above the inflation rate.
So if inflation is 2% and you're getting 4% interest in the bank, then any money you're saving is outperforming. So, so you're fine, but we're now in a place where we've got near zero interest rates and inflation rates looking nearly 5%. So any money you're holding in the bank year later, it can buy you less stuff.
So again, it's in the U S the UK. It's not that big an issue. Let's look at somewhere like Lebanon right now. It was in the news yesterday because people have, I think they've raided the national bank. We just do a quick search because I saw it this morning. Here we go. Lebanon banks closed in solidarity after assault on staff, Lebanon hikes fuel prices by more than a third as consumers reel this is the end of the time.
Lebanon struggles to find political path for its crisis. Lebanon's crisis is a financial crisis. Okay. It's a, it's a crisis of their currency. So inflation for Lebanon in 2017 was four and a half percent. 2018 was four and a half percent in 2019 2.9%. Not great, but not too bad. You can kind of cope with that. You can manage that. Ok, 2020, 88% inflation. Yeah. Now, at 88% inflation the currency is collapsing. Okay. And that becomes a bigger issue is that you then don't want to hold onto the currency.
You need to spend it quickly. And I've been to Venezuela, which went through hyperinflation and seeing the impact on the country. This is devastating. Okay. What Bitcoin offers as a, as a form of money is something that is impossible to inflate. So is it really important? It means it's 21 million hard cap.
It also needs to be censorship resistant. So what that means to your audience is if I wanted to send you a hundred dollars a Bitcoin, right now, you send me your address and I send you and nobody can stop that happening. If I sent it to you via the bank, they might say no. If I send to you via Venmo, they might say no same with PayPal.
This is super important because there are places in the world or certain people who need to receive money who get blocked. A great example of this was WikiLeaks a journalistic resource run by Julian Assange, exposing crimes by governments. Now the governments didn't like this and they got financially censored.
Now, financial censorship, if you are financially censored. You are having your basic human right. Of being able to buy things and trade taken away from you. And that's a fundamental, basic need everyone has to survive in life. No one can, you know, with Bitcoin, nobody can stop this. So those two basic things have to be maintained.
And the way this is done is through something called decentralization. What decentralization means is the Bitcoin network is made up of nodes. Every single person on the, on the network. They don't have to, but can download a node. You can, and I can, and that node keeps an entire copy of the blockchain.
So what happens is if you send me money, I can check on the Bitcoin blockchain that I've received it. Okay. And everyone can do that. And that's what keeps the network honest. That's what keeps the network decentralized. But to, to be decentralized, you have to have a lot of people running these nodes because you want to remove these single points of failure.
And the single point of failure can be a country, right? A country can ban Bitcoin, but they can't really stop people using it. They can just legislate against it. So, so the way it does is that if the Bitcoin blockchain, which holds all the transactions, every block, we have to try and maintain that as a small data size as possible.
So at the moment is one megabyte. The block weight allows it to get to about four, but let's just for simple terms, let's say it's one megabyte. Now we've had Bitcoin for 12 years, the entire blockchain is around three 50 to 400 gigabytes. That means you can get a hard disk and a raspberry PI, and you can run a node.
You can buy an old laptop. As long as it's got over 500 between 500 gigabyte and a terabyte of data, you can download the entire blockchain. That means it doesn't matter whether you're in Santiago, Chile, if, whether you're in. I don't know, what's a good example on London, UK, whether you're in Thiland wherever you are in the world, as long as you've got an internet connection, you can run a node and you can support the network.
And that's amazing that that actually happens. That's amazing. We have this highly decentralized network, so, and, and what that does, is it. That keeps the system decentralized, keeping the 21 million hard cap. That is a part of the consensus rules and the consensus rules are the basic rules of a block. You know, when a block is created, it has to follow a set of rules and those are hard rules within the system.
And if you try and break those rules, okay, your block will be rejected. And that that's what protects the rules and to change those rules, it is possible. You can create a Bitcoin improvement proposal, you can put it out, then discuss it, but fuck, it's hard to get something changed. Like getting consensus around changes is really, really hard. The benefit from both of those things is the network stays highly decentralized and we maintain that 21 hard cap.
And that's what gives us this gray hard form of money, which I believe. Can be a base layer pillar for the global monetary system. It's one that's not controlled by any government has its fixed cap. Anyone can join in, use it, and everyone can trust the network and use it without having to trust each other. So that's why Bitcoin is really important to me.
It gives us this financial standard that everyone can trust.
Alex: [00:19:58] So what about Ethereum? Where does that all fit into this mess?
Peter: [00:20:02] If you look at Ethereum, Ethereum makes some trade-offs. Ethereum in some ways is similar to Bitcoin. It is a cryptocurrency and it has a blockchain, but really it's very different because you can do so much with ethereum,
it has a, you have a code base called solidity, which I believe is cheering complete. Which we can create smart contracts and create all these tokens. The problem that ethereum has, is that it has fast block times and the size of the blockchain--
i, I, I believe it might be around four terabytes now, so you can't run a node, I can't run a node realistically. And even if we did, our node might not keep up with a network. So what you really need is these nodes have to exist in data centers. I still can't find a good clean answer to how many full archivable nodes there are.
So there's some trouble. No ethereum is still permissionless, but it isn't as de-centralized as Bitcoin. And that's really important for me. That's really important. Also all these other things it can do. To me trade offs for good hard money. So this is website, I think it's wrecked news or wreck.news and it's all these different rug, pulls and scans and yeah, 20 million taken here, 5 million taken there and that is not, that is not the basis of a financial system that you want to help people of El Salvador.
Counter the effects of of inflation coming from the U S being a dollarized nation. So like just, you know, from very first principles basis, if you want to build the best global financial system, it has to be maximally decentralized. And that's why Bitcoin is more important for me. I don't hate ethereum.
The way I think about it is Bitcoin is my safe. That's my vault. I keep all my savings in there. But occasionally I might want to go and have a little bit of a gamble. I might want to go to Vegas. And if I wanted to go to Vegas, I'd go to ethereum because I, I, I know I can make some money, but I know there's a lot of risk in there, but I don't hate ethereum, I just have no use for it because what do I, I just don't need it.
Alex: [00:22:12] Right. No and I think it's interesting that you put that in terms of accessibility. And honestly, I'm interested in how that sort of ties into political philosophy in a way, because I think, you know, guys like yourself or guys who are maybe even more sort of into the whole Bitcoin thing than you are, tend to lean maybe a little bit libertarian and sometimes full on kind of anarchist.
I'm interested in your philosophy when it comes to the role of government and how that interplay sort of works with something like Bitcoin.
Peter: [00:22:46] Yeah. It's a really good question. And it's, it's definitely something I don't have a clear answer for because it's something that's changed a lot for me. I, you know, as a, as a child, I was very much.
You would say I was a socialist. I didn't know I was, but you know, it's like, I was talking about this with my kids the other day I said to my daughter, I turned around to her and said, you know, what kind of world do you want to live in? Do you want to live in a world where everybody just keeps their money and it's everyone for themselves, or that everyone puts some, you know, a little bit of money.
It takes a little bit of money, puts it together and tries to help poor people or tries to help, you know, people haven't got jobs or people who can't afford healthcare. I mean, of course she says the latter. Because she's a child, she wants the world to be fair and equal, and I was very similar. And even in my teens, you know, I was reading John Pilcher books about the us, military, us industrial military complex, and the war in Iraq.
And, you know, and then as I started earning and as I became like A bread winner, as you would say. I kept became a little bit more conservative. I wasn't anti-tax, but I, I didn't like left wing economics. I like progressive ideas. I think it's great that we move into a more equal world with respect of re you know respecting race, gender, disabilities.
But economically I don't like left-wing politics anymore. So I, when I go into Bitcoin, I'd certainly say I lean more, more, right. But UK right is still pretty left for the U S.
Alex: [00:24:18] There's a difference. Yeah.
Peter: [00:24:19] Yeah. There's, there's a difference. And then what's happened. I've gotten to the world of Bitcoin, and obviously you spend a lot of time looking at what the government does and the ills of government.
I spent a lot of time around libertarians and I spent time with anarchists. I recently interviewed Michael malice. I almost think every political ideology sounds great on paper. You can make a really solid argument for everything. Right. I was even out in El Salvador and someone was trying to sell me communism, but communism is never has been done.
Right. It's like, well, hold on a second. We can talk about that. But anyway, the point is, is I think I've got to the place where I think anarchism on paper sounds beautiful and perfect. I just still can't see how it works, realistically. I don't like government, but I think that maybe a necessary and I think it was Winston Churchill, I think maybe said democracy is the worst form of government except for all of the others. So he's like accepting it's shit. But in a democracy, you have, you have the ability to vote and look anarchists still hate democracies.
You know, they, they still hate the UK because our government is incompetent and, you know, we have mass survailance and you can be put in jail for hate speech. Right. But at least the UK is better than say China. Right? And I mean, I think the U S in some ways as the best form of democracy because of the federal system.
But so I've come to this kind of reluctant position where some people don't like me having it is that I, I think you need a form of governance, and if you lose government, if you've got rid of governance, it would rebuild itself. You would rebuild structures to organize and coordinate people. What I would like to see is there is limitations on the size of government and the growth of government.
I think we should always be looking to have a minimal government government should be there to serve the people for the things that that should be centralized and, and that's it. And they should be limited on what they can how much money they can spend to do that. I don't mind paying a small amount of tax to provide an education system, as long as the government doesn't write the education. I don't mind paying a small amount of tax to have the roads maintained. I'm not completely anti the NHS in the UK. And again, a lot of people hate it, but I'm not completely anti it. Right. So I'm, but I'm kind of in this position where I think you just need the pull of everything, all ideas to reach some kind of consensus you need the pull of anarchists away from government, the pull of libertarians to smaller government. But you also, I think you need the pull, the pull of the progressives to ensure we have some kind of fairer system for people. I think we also need the pull of the people on the right to have a good economic system. And I think in somehow you get towards consensus and I think it's look, it's just hugely complicated because anytime we discuss with anyone, they don't agree with you.
They think you're an idiot. So if you're a socialist, you think people on the right are all like Trump, and if you're on the right, you think people on the left are all woke morons. And if you're an anarchist, you think everyone everyone is an authoritarian. So it's really difficult to try and get to like a place.
But I do think ultimately I, I accept democracy is the best, worst form of a government we have. And, and yeah. So the role of Bitcoin, I guess, in this, is that it can limit government, the government. I would like to see a government whose based on a Bitcoin standard and therefore their budget has to come from from a Bitcoin standard.
And therefore they're limited in what they can do and the free market figures, the rest out. That's what I would like to see. Does that definitely lead to a better world? I don't know. I don't know. Yeah, I've been to places with failed governments and, you know, they're dangerous, scary places. You can also go to places with authoritarian governments, and, you know, you can argue that they're well run like Singapore.
You can argue is a very well run society. Cause it's more like a private city, so it's complicated, but ultimately I, I prefer smaller government.
So, I guess that's the way we'll we'll have to run with it for now and not the best form that we have, but it's something right.
Alex: [00:28:30] I appreciate it.
Peter: [00:28:31] Alright brother.
Alex: [00:28:32] Take care, peace.