Balaji Srinivasan — Centralized China vs Decentralized World, The DeFi Matrix, Ascending vs Descending Trends, Bitcoin Mining as Energy Storage, Reputational Civil War, and Maximalism vs. Optimalism (#547)

Comment Rules: Remember what Fonzie was like? Cool. That’s how we’re gonna be — cool. Critical is fine, but if you’re rude, we’ll delete your stuff. Please do not put your URL in the comment text and please use your PERSONAL name or initials and not your business name, as the latter comes off like spam. Have fun and thanks for adding to the conversation! (Thanks to Brian Oberkirch for the inspiration.)

20 Replies to “Balaji Srinivasan — Centralized China vs Decentralized World, The DeFi Matrix, Ascending vs Descending Trends, Bitcoin Mining as Energy Storage, Reputational Civil War, and Maximalism vs. Optimalism (#547)”

1. As the first one a super interesting and challenging listen.
   Couple of thoughts: 3:23 it seems like Balaji treats Bitcoin as a “false God” even going back to it’s own mythological origins.
   I can’t reconcile his distributed future from the totalitarian base of the “root” he seems to think it requires: his China or Singapore homerism (not necessarily homerism but discounting mass surveillance/Uygher or cultural destruction). America and it’s leadership is distributed, the rise of states vs federal is further distributed, but we’re to believe freedom/development of a distributed future will be best realized by the root controlled states?
   Crypto civilization as sci fi seems to be the best descriptor: I think about this talk parallel to Disunited Nations by Peter Zeihan. Balaji has no national pride in a place that allowed a construct for his education/wealth, but humans have always been tied to place/proximity/geography/etc. All these things don’t matter in a cryptoverse: so what is left of us as humans/spiritual beings/everything we’ve evolved to be to date?

   Reply

   1. Good questions.
      When the U.S. dollar (i.e. fiat currency) left the gold standard, it became an abstraction away from the physical realm (i.e. a materially useful thing that must be stored in a place) towards the digital world, where most of our money are just numbers in a database proclaiming who owns it.
      A Bitcoin civilization isn’t a huge leap from that – it’s just decoupled from the fiat part, which is a system of governance based on laws that humans can vote or lobby to change (or appoint new leaders, such as Fed Chairman Powell), where that eligibility is based on some residence status inside physical borders.
      Thus the only thing dissolving or changing in a crypto civilization are the standards for citizenship such that you can shape the rules (or logic) that govern the monetary system.
      In this case, it seems programming knowledge or at least a familiarity with computer algorithms is a basic requirement.

      Reply

      1. If going from Gold to fiat was a decoupling from the physical reality and going from Fiat to BTC is a decoupling from a false physical reality to a digitized one. Doesn’t any currency still have physical limitations from a resource perspective? In a BCT world we still have to pull physical resources out of the ground and put them into action allocating them to those who need it? From where we are now isn’t Fiat running into major challenges with the resources running out or low? I’ve heard the World economic forum say “in the future you’ll own nothing and be happy about it”. And my thought is who’s version of happy are we talking about? Meaning the only trajectory for Fiat currency to move forward is a form of Totalitarianism. If BTC takes over majority of control doesn’t it still have the same and worsening physical limitations. Making it possibly dead on arrival? We’d just have a new currency but the same totalitarianism outcome?

2. Hey Tim, would you ever have anyone on that would challenge some of the ideas presented here? There are a lot of smart people out there who have ideas on how to change media who don’t think that the NYT is run by incompetent people who don’t know how to build anything. Or someone who sees the value in crypto understand but also understand the value in Fiat Currency. Finally I know it’s not as much up your ally but maybe a historian focusing on the reasons of the Fall of the Roman Empire who is younger than Gibbons 🙂

   Reply

3. This is the first podcast, I haven’t heard one where the discussion has gone almost close towards 5 hrs mark, something incredible. Kudos to the loads of patience of Tim and the overflowing energy of Balaji, so much of subject matter and almost every matter was getting dissected. The depth and diversity of topic, and the relationship between such different subject matter from politics to governace to technology to economy to history to future to investment to startup, you just name it, it was there in the discussion. Deeply insightful and highly intriguing…

   Indeed, there is so much on the aspect of what has happened between US and China, and matters of Asia cannot be discussed by keep India out of picture, the decline of China has to have an equilibrium somewhere else, and it is happening in India. Balaji was so bullish about India, and here are some of the figures to corroborate his analysis.

   India is the top country by listed domestic companies in the world. As of 2020, listed domestic companies in India was 5,215 that accounts for 13.63% of the world’s listed domestic companies. India is the third in the list of countries having the most unicorns, trailing the US (396) and China (277). India had about 50,000 startups; around 8,900 – 9,300 of these are technology-led startups whereas, 1300 new tech startups were born in 2019 alone, implying there are 2-3 tech startups born every day…

   Reply

4. A decentralized conversation by a real life Polymath

   Reply

5. Balaji is a
   super unique thinker and I don’t always agree but his ideas are the
   kind of heterodox thinking we need to keep innovative solutions at the
   forefront of people’s minds. His mindset reminds me of how Bret
   Kugelmass talks about nuclear. Would love to see a conversation with
   both of them sometime.

   Reply

6. “Never, before, in the course of Ferriss Podcasting, has one man, made me feel so stupid !!!”

   As always just brilliant

   Reply

7. I am 77 years old, retired, but read widely. This was an excellent podcast and I am going through the copious show notes with much interest. Thank you so much for providing such viewpoints to those of us who are trying to figure out the world and politics of today. Now more makes sense to me!

   Reply

8. Oh, made it (I hang in there) through the 5 hours at Sam Harris’ some time ago.
   This man is no doubt smart and has some ideas, but very tiresome, big ego, doesn’t listen and doesn’t capture the nuances of things. There is a lot more to life.

   Reply

   1. I listened to both of Tim’s interviews with Balaji. That’s a lot of time and overall I get why people liked listening to him. I did and then I really didn’t.

      I’ll first say that I don’t ever remember listening to a person that could summarize and articulate such a wide variety of topics as well as try to place them in a broader framework from which he could intuit future events. The centralized vs. decentralized paradigm is completely new to me as was many of is classifications. However, about half way through listening he started to hit some topics that (as a mathematician) I knew a far bit about and noticed that his summaries tended to not be quite accurate or that there were some connection we was trying to make (or fancy words he was using like talking about functional analysis and the Navier Stokes equation) that seemed incorrect or maybe just unnecessary.

      After this realization, I started to think that maybe this is how he is with everything. He has a 1 in 100 million ability to retain and access knowledge and make connections. He uses this skill in conversation to completely overwhelm mere mortals (like me) with a constant stream of tangental references to the point were you give up and maybe just stop questioning and take it all in. But, when he gets to something you understand and it’s not quite right! Is the NYT really so bad? Is dictatorship in Singapore really so great (or aspirational)? You can’t throw it all out but it might no be worth the effort (or, indeed, the injury) to wade through this mess.

      I have been a long time fan of Tim, his books, and his podcasts. I realize this was his most downloaded in 2021 and I fear he will take this as a lesson moving forward. In all it was more political than Tim’s podcasts usually are and that was disappointing. It also doesn’t do Tim any favors to platform him. Tim is a man of exceptional skill, poise, and intelligence. But, in the presence of a filibustering, ideologue his usually permissive style is insufficient.

      Reply

      1. Thank you very much for your contribution @Kevin Beanland. I so much agree with you. I am concerned that people like Balaji get so much airtime and are not challenged more thoroughly. Unfortunately, amongst all the accolades we are the minority.

9. Wow epic, so many thought provoking topics and resources to explore. Thanks Balaji, Thanks Tim, especially for going to the trouble of documenting all of the resources.

   Reply

10. I listened several times to this podcast as well as the one from March. Lots of good thoughts that have changed my perspective on the current state of affairs in the US.

    One thing that came across is that Balaji equates capitalism to free market and indirectly to the decentralization.
    As far as I remember, capitalism is the opposite of decentralization: it is actually accumulation of the capital. Winner takes it all, if you will. Think of the major tech companies mentioned in the podcast.

    As far as markets are concerned, Chinees bureaucracy has been creating and running markets in China close to thousand years. Markets have to be created and maintained, just like crypto market.

    The talk about mythical beginnings of BTC, and disappearance of its creator sounded like pages from a manga book.

    Reply

11. Interesting and annoying. A spaghetti code of a conversation. Constant execution of subroutines without returning to the original flow of execution. Definitely some worthwhile concepts. But please, just answer at least one question without descending into more topics with more questions that never really get answered. At least, that’s how it felt to me.

    Reply

    1. Brilliant guy, for sure. Many epiphanies while listening. Among so many insights, one thing that’s confusing me is Balaji’s assumption that a higher sovereignty (decentralization) of cities and states would create better entities by spurring competition between them for citizens. He compares this to the state of internet-era media, where many subpar journalism outlets die off, leaving only those that provide better value (implied). At the same time, however, he decries that same media — especially in it’s current state, where only those outlets who have outcompeted the others for eyeballs survive — for having a potentially devastating amount of power over the truth, and for manipulating that truth for their own interests (the top interest being gaining more eyeballs, regardless of whether or not what they provide is in the best interest of the owners of those eyeballs). So is he saying that concentration of the most popular ideas (in cities or in media outlets) would create the best possible outcomes or devastating outcomes? He seems to simultaneously argue for both.

       Reply

12. Very thought provoking and for sure intimidating listening to…it is also amusing to hear Tim said “No, I don’t know what it means…” so many times. It makes me feel a little better. hahah

    Reply

13. Tim I can’t believe you didn’t know NIMBY and YIMBY!:) Great episode though. You’re very patient with a guy who basically wants to give a long speech and hear himself talk. And let’s face it, that’s what Balaji is excellent at and we all actually enjoy it. I do think you’d benefit from some foreign policy immersion classes or something. To be clear, he mentions a ton of things that even someone well rounded in foreign policy wouldn’t necessarily know, but listeners can hear your lack of confidence on the issue and I think you’d enjoy it.

    Reply

14. He said something about secession, slavery, the American south, and anti-slavery at the end. Did anyone catch that?

    Reply

15. Hahahahahahahaha – Sovereign right to tax….

    Officially, though, India still hasn’t made its mind up about whether cryptocurrencies are even legal.

    “[Whether crypto is] legitimate or illegitimate, it is a different question, but I will tax because it is a sovereign right to tax,” Finance Minister Nirmala Sitharaman said in February.
    .
    While the legality of crypto in India is still a matter of debate….

    Reply