Jack Dorsey’s Embrace of Crypto-Libertarianism

Paris Marx: David, welcome to Tech Won't Save Us. David Gerard: Good afternoon. It's great to speak with you. PM: I've been meaning to talk to you about crypto for a very long time. And I feel like the conversation we're going to have today is adjacent to it because at least, it's a crazy crypto enthusiast, but we want to talk about Jack Dorsey because of what he's been up to and some of the stuff he's been saying and because he's just this figure that, I think, has had a lot of impact on the way that we use the internet and social media. But I feel like he's one of those that kind of recedes into the background a bit. We kind of forget he's there. He's a bit of a dumb ass and that probably helps with it. So if you were to kind of briefly describe who Jack Dorsey is to the listener, how would you, how would you put it to people? How would you explain who this guy is? DG: Jack Dorsey is the co-founder of Twitter, and the founder of payment company, Square, now called Block. He's a hilariously stereotypical tech billionaire. He tries to look like the sort of freshly pressed version of a Burning Man guy and nothing he says is not a corporate PR statement. He has bigged up his influence on Twitter — this is an important part of the Dorsey story. He's tried to make out that he was the visionary behind Twitter and he meant to do all of that. This is false. He was fired from Twitter twice with cause. So, in the tradition of Silicon Valley, he has failed upward reliably and also he's really into his Bitcoins. I'm not sure he understands what a Bitcoin is, but he's really, really into it. He was apparently has some technical ability or had some technical ability, could code things and so on, which puts him in the top 5 percent of tech billionaire guys. That's the summary in a nutshell. A year or so ago, my editor at Foreign Policy, James Palmer, asked me to write something about Dorsey going on about Bitcoin because he was going on about Bitcoin. I completely flubbed on this article. I failed to deliver. Fatal for a freelancer. Bu t there's nothing to write about the guy. He's got no personality. I reviewed literally his entire Twitter stream; there isn't much of it because everything he tweeted read like a PR statement and then I looked into his history and it's like he barely has one. PM: \[laughs\] I agree with you. He seems like one of these people who there's not a whole lot going on behind the eyes there and who we talk a lot about. Or at least the tech industry likes to make it seem like they're this great meritocracy and you can kind of work your way up and you can make it as a startup person or whatever, as long as you work hard enough. But he really does seem to call this entire kind of idea of tech meritocracy into question because he is clearly, like you said, he was fired as CEO very early on in the company and then he came back in 2015 and, of course, ended up leaving again in 2021. And he just seems like a very unimpressive individual who has locked into all this wealth and now can use it to make it seem like he's something much more than that. DG: To be fair, he's reasonably intelligent. He was good with computers. He was good coder. He has started two successful companies. However successful Twitter is, Square is definitely successful. Square was making useful things that did a job. Terminals in shops and so on. And that's not nothing. He has done things; he has achievements, which is more than a lot of people have, but he's also got that failing up thing. And also, with Square, he then tried to sort of add blockchain to it. Now, for those who aren't aware, everything about blockchain is absolute bollocks. Bitcoiners will tell you, you just don't understand the technology. This is them throwing up chaff. It's one of those things where the thing is clearly a con, it's clearly some sort of scam, simply because it makes promises that magic can happen. And of course, magic doesn't happen. And magic really never happens with money. Anyone who says magic happens with money is trying to pick your pocket 100% of the time. So when Bitcoiners say: Oh, you just don't understand technology, that's because they've made an impossible promise and their excuse is: Oh, it's a technology. Technology, yes! Oh, it's technology. You can see the same sort of phenomenon with AI promotion these days, it's a bit different because the technologies that are collectively marketed as AI do actually exist and do things, machine learning is clearly useful and functional, Google translate is amazing, that sort of thing. But the bullshit line is exactly the same as the crypto one, because it's the same venture capitalists and the same promoters who had pivoted from crypto to AI. And I, as a critic, recently pivoted \[both laugh\]. So, we'll get to that. But it's the same sort of line of nonsense where someone's selling you magic and says technology does the job. So blockchain doesn't work and it doesn't do anything. Everything he did at Square with blockchainy things and trying to bolt bitcoins into places they didn't belong, it was just nuts. He's literally a successful payments guy. He knows the space. He knows how it works. Why would he think this was a good idea? This baffles me because it isn't like he was a failure at payments, and eventually he's tried to spin it out as a separate company called TBD, producing Web5, they skipped 4. I just looked at the TBD page just now to see what they're up to these days. I have no idea what they do. It's like he's re implementing a pile of ideas that crypto guys have been talking about for 15 years, none of which worked or can work, but he's going to do another one that can't work. He's big on self-sovereign identity, which is basically a lovely dream, but is not going to work in the context of the present civilization. Because the trouble with self-sovereign identity is, either you can have customer service, or you drop your iPhone in a puddle and you don't exist anymore, and you've lost everything. There are no alternatives. It turns out people overwhelmingly want customer service. The trouble with most Blockchain dreams and sort of tech anarchist dreams and anarcho-capitalist dreams is that most people aren't actually anarchists of any stripe. Most people want to live in a society where they know there's someone they can talk to about things. People overwhelmingly choose customer service. My favorite object lesson of this is Wikipedia. I've been on Wikipedia 20 years; I'm an admin. We were given a completely blank slate. You could do anything. The very first thing people did was build the most byzantine bureaucracy imaginable. So yeah, most people aren't anarchists. PM: \[laughs\] Yeah, I love that example. DG: It's amazing. So, of course, with an impossible bureaucracy, what's it come down to? What you know and who you know and how well you can argue. PM: Of course. DG: Whenever you get two people in a room, it's politics. PM: Of course. And I guess as you're describing that, right, as you're describing how he has been trying to implement these blockchain ideas, and he's really into Bitcoin. If we're thinking about someone like Jack Dorsey, does he have like a coherent worldview or ideology or Or is he just kind of like going on with the Bitcoin stuff and kind of like whatever kind of attracts his fancy at a time, he kind of goes for it, but it's hard to understand how he really understands the world. Do you have an idea of how he thinks about it? DG: Some idea. No, I think that from what he says, he has no understanding of how Bitcoin works, which is odd because he's actually technically equipped to understand it. It's not hard. The point of Bitcoin is not the technology — it's the politics. The idea of Bitcoin is it was invented to implement a particular form of Austrian economics, anarcho-capitalism, Austrian economics, the gold standard, except the gold would be digital tokens that couldn't be faked. That was their idea. Even Austrian economics fans don't accept this. Austrianism fans will often make fun of Bitcoin. But the guys can talk to each other. Bitcoiners and Austrians talk to each other a lot because they have similar ideas and they get along fine. And you read the Mises Wire and they're quite fascinated with Bitcoin and the possibilities of crypto as an idea. So they're broadly ideologically compatible. Now Dorsey is coming to it, I think, because he understands fully the politics of Bitcoin and what it promises in that regard. And the technical stuff is a minor detail. He is a rich libertarian who, of the sort, finds nothing more ghastly than the prospect of being... taxed. So therefore, the goal of Bitcoin is to have money that cannot be taxed, cannot be garnished. The government cannot get to your money. That's literally the point. Now Bitcoin in 2024 is not quite like that because at this point approximately 100 percent of people who are into Bitcoin are in it for the US dollars. So they do things like set up Bitcoin ETFs, which regulated by the SEC and they think Wall Street adoption is good news for Bitcoin and I'm pretty sure that is not. In fact, the ancap vision of Satoshi Nakamoto. They've got money at the moment. The public doesn't care about Bitcoin anymore. I've seen interest just drop right off. I mean, I'm bored with it and so are they. I predicted that we might have another bubble in Bitcoin by 2024 or 5 because there's nothing it can do but bubble. It's a meaningless non-commodity that doesn't do anything. All it can do is bubble. So, but then all of 2023, all the Bitcoin news was Sam Bankman Fried is a crook and is going to jail. So Bitcoin, ordinary people view Bitcoin as this nerd money for nerds to pick each other's pockets. They really hate NFT bros because you get those guys on your social media, they are the worst. And then they find out about Bitcoin mining using 0.5% of all electricity and they get angry. One thing that Bitcoin has is it's theoretically decentralized. That's decentralization not in the sense of operationally decentralized, because it's actually quite centralized, but decentralized in the sense of 'can't sue me bro.' That is the point of Bitcoin. That is what these people want. They want money without being able to be called out on it. This requires a weird view of money. Now, you or I might think money is a social relation, a function of society, a token you have that people exchange, a sort of social ration ticket. When people get stupid, they do things like think: What if money was real? What if money was an object that existed independent of space and time? Maybe gold will do that job. I'm into gold now. Maybe bitcoins will do that job. I'm into bitcoins now. They want something that will work everywhere. Gold wasn't money for thousands of years of civilization. It was valuable, but the money was copper or silver if it was that, or just keeping count. Quite frequently it was just virtual money that was kept count on account. The gold standard was put into place more or less by the European empires, particularly the British Empire. You'll see some Austrian economists claim that the Pound Sterling was held up by being a gold standard, whereas everyone else thinks it was more to do with being the current silver world spending empire. But even when it ran, a gold standard was you have gold in reserve and you have paper money that represents the gold. This was obeyed more in the breach. To the extent it did work, it was horribly economically unstable, booms and busts, major economic crises, like 2008. Imagine having one of those every year or worse. So in the thirties, they adopted monetary policy. This involves making money out of thin air. So what's the value come from? Well, it comes from the fact that it's in a working economy. And it turns out money is literally just a made up thing, but you tell the guys like Dorsey and they want their billions, which more than any human could have to mean something. Now, of course that means something. It means a lot of power. You have a huge amount of leverage just by being able to throw money at problems. I'm amazed how, and somewhat disappointed that Facebook's Libra crypto has disappeared from the consciousness. And of course I literally wrote the book on that. I do think the driving force behind Libra, the team who created it were all loyal Bitcoiners, but they realized Bitcoin was no good as money because David Marcus leading the team, he was literally a payments guy. He knew that it didn't work for payments, so he made something that would. But I think the attraction to the Facebook board who would have had to approve it, people like Zuckerberg, Thiel, and so on, is that one of Facebook's big problems is repatriating billions of dollars. Because they'd get taxed, and that's unacceptable. So they wanted a currency they could move money around out of sight. The US government said: lol, no, you're not going to take on the US dollar; we will shut you down hard. In one of the three hearings about this in Congress, one congressman said to Mark Zuckerberg in very small words, we use US dollars in place of soldiers. Our sanctions regime is extremely important to the national security. So if you ever say that and someone says you're a conspiracy theorist, you can just quote the Congressman. It's impossibly obvious that that's what the dollar is for. And it works really well. The US dollar is strong because it's got 300 million people behind it, but also it's the world currency. It's got a billion people on it. PM: On that point, you were talking about how crypto is, Bitcoin in particular, but all of it really is based on this like idea or this fantasy of decentralization, which I think is something that you see a lot within Dorsey's worldview and what he says he wants to achieve through some of these technologies and then builds on that to this broader world that he reportedly wants to see. You wrote an article recently about or in response to or or to analyze an interview that he gave to Mike Solana at PirateWires, which is this crazy tech libertarian rag, basically, where he was talking about his experience at Bluesky, which is this protocolized social media that he set up in response to Twitter. What was he saying there about why he felt that project failed, and ultimately the problem that he sees with social media? DG: So when Dorsey and guys like him talk about freedom, self-sovereignty, and so on, they are literally talking about freedom of the money of rich guys like themselves. They don't mean you or me; we're the plebs. We might one day be elevated to them as well. Hacker News has a site for temporarily embarrassed billionaires. With Bluesky, that was originally originated inside Twitter. It was a plan to build a decentralized Twitter, more or less, social media site where you micro blog and you chat to your friends. PM: Basically like how he was trying to insert the blockchain into Square as well. DG: Something like that. He was blockchain inspired. We can put all the tweets on a blockchain. No, you can't! It does not scale. By the way, that's amazing. That's something that people should know as well. If anyone ever tells you, I don't like Bitcoin, but blockchain's cool. They're wrong and they're dumb. They're just trying to sound clever. Blockchain's useless garbage, worst data store you've ever seen. It is just amazingly crap. So he started Bluesky because he wanted to decentralize Twitter. This was just him saying: Oh, I want this, make it so, so a bunch of guys went away and sort of worked on this. Bluesky started the internal project, then I'm not sure on the details. It was pushed out and it set up as a separate company, not a pure for profit company. Some sort of public interest B Corp, I think we can make a profit, but it sort of has to be nice about it. I'm not sure of the details. What do you do was he tried to hire on people who had the same vision as him and they wanted the same things. So what this resulted in was a bunch of Bluesky staff who are from the less wrong rationalist sphere, a lot of crypto people, the CEO used to be a Zcash developer, neo-reactionaries, as in Vibe Camp attendees who went along to cheer at Curtis Yarvin dropping in on them, that sort of thing. They're not great people in a lot of regards, the staff. But then again, there's an idea that a social media site can only be really good if you hate the stuff. So Bluesky is actually really cool. And I have a lot of fun there. I love it. PM: Yeah, me too. DG: Basically around, around April or May, this whole bunch of queer shit posters move over from Twitter. They just took over. They ran the rationalists and NFT bros off the site. And it's been really cool. When I joined in April last year, didn't even have a blocking function. Then Matt Iglesias joined and about a zillion really pissed off trans women had a few words to say to him. And then he wanted a block function, so they put it in just for him. But he cannot raise his head without people giving him an earful, and that's the way it should be. Because the actual use case for Twitter, and I don't think a single person involved in the company understands this: 1) Get celebrities; 2) Get normal people to throw rotten tomatoes at them; 3) show ads to the normal people. That's it. That's the whole model. The celebrities are there for the normal people to throw rotten tomatoes at. That's it. So if you want to be have Twitter clout, well, what you're in for. But fortunately I'm tomato proof. So, I can have my followers and that's just fine. But Bluesky's tiny. It's only a few million people. It does not have a business model yet either. It's running on startup funds. It's just burning its runway. I hope it'll go well. Post.news died; Spoutible is in ill health; Cohost is in ill health. So it's a dodgy business model not having a business model. So I sort of worry about that. But I hope they get it together because as a social space, I'm really enjoying it. It may suck tomorrow, but today it's fun. Anyway, what pissed off Jack about Bluesky was, these guys who wanted what he wanted and were largely ideologically on board with him, put in moderation, blocking, trust and safety after they had many experienced trust and safety people yelling at them for months. Denise from Dreamwidth, who still goes on about trust and safety on the site, telling them just the obvious two plus two equals four, facts that the quality of a social media site is the quality of its moderation, because it turns out that hanging around with dickheads is not pleasant or social. The trouble with Twitter at the moment is that Elon Musk is not a pleasant person to be around, and he wants people on who are not pleasant people to be around. And free speech is nice, but weird racists are not fun to hang around! You get enough of them at Christmas dinner. You don't want them on your Twitter. You'd think that it was obvious, but apparently it isn't. PM: It certainly isn't to the rich guys who want to be around those people, or even to be them. DG: So Dorsey was outraged by this. But also he was really upset cause he finally posted on Bluesky. And what he posted was something about how people should be listening to RFK Jr. The site did not react positively to him. So being on the receiving end of quite a lot of rotten tomatoes, he took his leave. He ended up deleting his account. The Bluesky posts are still out there somewhere on the blockchain like structure that they store all tweets in. But it's X now, so we can call them tweets. We can take the word back. But that was what Jack was really upset about. He tried posting through another network called Nostr, which was started by a Bitcoin guy. Nostr is not usable by humans. The simple guide to joining Nostr says, first create a cryptographic key pair. This isn't going to work. PM: Yeah, you've already excluded like 99.9% of everybody \[laughs\]. DG: So what happened with Nostr is it filled up with crypto guys trying to pick each other's pockets, but no actual sort of suckers to pick the pockets of, which is why crypto is still based on crypto Twitter, because they might get some suckers there. PM: So I guess, on the point about Bluesky, it was basically, he set this protocolized social media up to be this alternative to Twitter or the next phase of Twitter, I guess, based on his beliefs in this kind of crypto stuff and this decentralization. And then Elon Musk took over Twitter. And I guess basically what he found as Bluesky Became an actual social media site was that it couldn't be this space where racists and assholes can do whatever they want alongside normal people. They found that to keep the normal people there who are the ones, as you're saying, based on the usual type of business model for these kinds of sites that people want, that you need to introduce the type of moderation that Dorsey. Really doesn't like and the people who are like him and the people who he wants to attract and be around don't like as well, which is what so pissed him off, right? DG: I think his attraction back through was the awful people were posting there and that's what he wanted to know was speaking. So I have never heard a sort of Nazi-like word out of Dorsey's mouth as such. However, he keeps having all these coincidental, tangential relations. He was personally the guy who stopped literal neo-Nazi Richard Spencer from having his account deleted for multiple sock puppetry. He stopped Milo Yiannopoulos from being de platformed from Twitter. He personally stopped President Trump from being kicked off Twitter for things that anyone else did, would have been kicked off long ago — for making nuclear threats on Twitter from the one guy that nuclear threats are credible from! PM: He has the codes! DG: Extreme social media breach. I don't know what finally got Jack kicked out. I think it was a lot of Bitcoin agitation and that sort of thing. I think something like Twitter, it's a terrible business to be in, social media. I don't think there's money in it. Twitter has lost money more or less continuously. It was in profitable places, but it's hard to make money in it. You have to be centrist because the center is where the money is. Normal people who think of themselves as normal and think center is a good place to be. Now that's the opposite of free speech and it turns out free speech is actually important. So you've always got a tension there. On the other hand, kicking off Nazis is easy because they're antisocial. This was actually an important incident in Bluesky's history, by the way. They'd gone out of their way to recruit a bunch of people from black Twitter. Then they had this neo Nazi who, literally a neo Nazi, English nationalist, who was suggested that one of their posters go and kill herself in a particularly violent and graphically described manner. They spent a week vacillating about whether to kick this person off. Then they instituted a new rule that said the person could be kicked off under extremely specific circumstances that wouldn't get them kicked off straight away. Then it came out that half the staff, including the CEO, were followers of the Nazi. Then the Nazi would not be told and breached again and they kicked her off. Since then, they've been quite reasonably good about kicking Nazis off. But they had to be dragged kicking and screaming to moderation because sites don't work without it. And that is what really upset Jack. His ideas were put to the test and they failed hard with people who agreed with him, even they had to be reasonable about it. PM: Which I think is the key point, right? Because he went and hired so many of the people who had similar worldviews who were in this kind of crypto space that he was in. And then even they found that, listen, to make this site something that was going to work. It had to be moderated, right? That they had to move in here. And I found it interesting because in the article that you wrote, you linked to a thread written by one of the developers of Bluesky, Paul Frazee, I think his name is. DG: Paul Frazee. Some of the Bluesky guys are very nice. Paul seems a pretty good guy. He's an ex-crypto guy, but now he's putting his life to more useful tasks. PM: He was basically saying that there was this vision to make Bluesky just a protocol, that things would be built on top of it. And it itself wouldn't be the social media platform or wouldn't be a specific app. But then when Elon Musk took over Twitter, and made it very clear that Twitter was not going to become the first thing to take advantage of this protocol, that they had to do something else, and that Dorsey is at least saying, whether he's just changing his story now because he got pissed off. Because as you were saying, people were throwing tomatoes at him on Bluesky, that he was pissed off that it didn't become this protocol and become something else. And that that was why he's backing Nostr now instead. DG: Oh, he's off Nostr now because Nostr can't work. So he's more or less given up on that. Cause it's extremely boring. By the way, another tangential thing, the guy who founded Nostr got outed as a huge Nazi fan. PM: Surprise, surprise. DG: This is pure coincidence, I must stress. PM: Yeah, I think the story was this guy, Fiatjaf, I might be pronouncing that totally — DG: Something like that. PM: But Giovanni Torres Parra is his real name. He's a Brazilian guy who made this Nostr protocol. And, basically they found, like no big surprise, this story and Business Insider not too long ago, Dorsey gave the foundation supporting Nostr $10 million, and this guy specifically, he gave 14 bitcoins about $245,000. And the guy is promoting Brazilian fascist who rails against communists and says that there's a global conspiracy to create a worldwide socialist dictatorship and the guy himself had leftism is a disease in his Twitter bio for a long time. So, these are the types of people making these visions of what social media could be that Jack Dorsey feels that he's so aligned with, but it's no surprise that something like that is not going to work. It'll just attract the crypto bros, which is again, not the type of environment that many people probably want to be in. DG: It's not an audience. It's like the sort of own the liberals, Twitter crypto guys need suckers to prey on. Otherwise, why are they doing there? They do talk amongst themselves. They're talking about themselves on Twitter, basically. And as long as Twitter has not literally fallen over, they won't have to think about a new home. The thing about Bluesky is that thread from Paul Frazee, he's actually building a thing that works and people can use it. And he's decided we're going to build a social media app and it's going to be good, and it's going to be nice, and it's going to be fun, and you can talk to your friends, and you can have a good time on social media, I think that people actually want. The thing about what Jack wanted is that his discussion in Pirate Wires, I mean, Pirate Wires is an amazing magazine. It's done by Mike Solana. He's literally a Thiel acolyte. He works at the Founders Fund and the magazine is most reactionary garbage you've ever read. The culture war segment is minority crimes and so on. It's just the most paleo conservative horror. So this is, of course, the piratical, anti-authoritarian side. As I said, Jack has never said a Nazi word that I could quote him on. He just keeps being tangential to them. It's important to note, what they wanted was decentralized social media that you couldn't stop someone from being on it or posting. At no point did they mention we have this. It exists. It's the fediverse, the network commonly known as Mastodon. There's like three separate lines of software, Mastodon, Pleroma, and Misky, and their descendants. And you can like put up a server in half an hour if that. Hire a virtual machine and put a server on it you and you're on the network on an equal basis to mastodon.social or whatever and you can just do that and no one can stop you posting. So what do they do about horrible people, griefers and Nazis? The answer is Mastodon has a social covenant. This isn't binding, but it does mean that you have to follow it if you want to have other people talk to you. It turns out that shunning the Nazis works really well. And that, but I think the reason he didn't mention that was because, this actually does a lot of the things that Bluesky's AT protocol,wants to do. They say it doesn't quite do everything we want. Sure, but it's also an underspecified protocol. You could easily bolt on stuff to do what you want. So anyone who's ever tried to get two pieces of fediverse software to talk to each other will know it's underspecified and you can never get things working without actually trying two bits of software. But the fediverse exists and it works and it's small scale. It's in the millions. But it's also sort of sustainable because the servers are paid for by the individuals and you can easily get your mates to put in like five dollars or whatever. And it's not entirely stable, but it doesn't have to be. And it exists. But the thing is that the horrible people on Twitter who drive everyone else off. They are deprived of an audience, and they can't live without an audience. So, these guys aren't going to advertise Mastodon or the Fediverse as any sort of solution to their decentralized social media network, even though it literally is, because it doesn't allow assholes to drone in your ear about white people Replacement Theory. PM: If I remember correctly, basically, if you have one of these servers that are like a really Nazi server, is not getting rid of the Nazis, then they will kind of be defederated or whatever. They won't be able to communicate with all these other larger servers. DG: It's sort of like there's a dark fediverse, the chad fediverse of all the horrible people. Gab was in there for a while and Spinster.xyz, the TERF server. They all talk to each other, but no one else wants to talk to them. PM: And, and someone like Dorsey or Musk doesn't want to be in that environment because then you don't have all the regular people to make hear your hate speech and stuff as well. DG: When they say free speech, they mean they want the freedom to drone into your ear and you do not have the freedom to stop them. They don't want to receive free speech at all. That's not what it's about. It's important to note, Dorsey paints himself as the architect of Twitter, the genius of Twitter, the man who had all the ideas. That's completely wrong. He founded it with four guys. And they went: Ah, Jack, you can do the... we'll do the tech side. So he made such a hash of it that he was fired. He then was still an owner. So the thing he did was he then spent about 2008 to 2010 trying really hard to change his image and market himself to the investors. So what he did was he tried to reinvent himself from looking like a generic guy to looking like the sort of freshly pressed hippie image that more or less like the one he has now. And this was literally a put on. This was an image he did. He took up his own role in Twitter. and inflated his own responsibility and claimed responsibility for things he had nothing to do with. He tried to look quite literally a boring person's idea of an interesting person — to look to board members like the weird hippie visionary Steve Jobs. So, Steve Jobs is still the ideal of Silicon Valley. He was a man who actually produced a lot of things. 1997 to 2010, he just had hit after hit after hit. He really, really did do amazing things, amazing gadgets, expanded the vision of what we could do with gadgetry, and it was really an improvement on a lot of things. He was also a horrible asshole. And he also was a massive failure the first time around, which is why he got fired from Apple in 1988. He was bad at his job! He was hired back because he did another system that wasn't marketing well, that was the next computer. But technically it was good. Apple bought them next executives got slotted into Apple exec spots. So it was like a reverse takeover. They bought the company and bought its management. And It worked. Mac OS X was incredible. It was the first really popular Unix based system. It delivered technically, it delivered usably. So these guys look at that and they want the image of jobs having achieved things without actually having achieved things. And they think if I act like a horrible asshole, I'll get there. And thus we have visionaries like Musk. I was fooled by Musk for way too long, I will happily admit, much like everyone. But he really was doing useful things through the 2010s. His talking was useful, as in I've spoken to serious energy transition people who will tell you that Musk was helpful, because he would talk up the transition. Politicians go: Mr. Musk, celebrity, tech genius, Iron Man. We will definitely listen to you. And the serious transition guys go, right, here's the plans. And that would really help. That's why I was so disappointed when Musk got in bitcoins. I went, Elon, mate, you've got one job. Come on. He completely flubbed it. PM: What do you make of how, obviously Dorsey went off and made this Bluesky thing. He did keep his, his small piece of Twitter once Elon Musk took it over. But now he does seem to be much more publicly backing Elon Musk's management of Twitter and what he's been doing with it. What do you make of what has gone on there? DG: I think he wants what Elon Musk wants a social space for conservative far-right free speech and people being reprehensible and annoying. PM: Pretty much just as simple as that. DG: Don't overly answer from all fires, Dorsey. I would not assume any depth. I would look at his actions and I would look at what he does with things and assume that he wants those things. There's no 12 dimensional chess going on here whatsoever. He wants freedom of his money and he wants freedom for awful chud posters. And he never posts sort of anything of what he actually thinks himself, ever. If he correctly divines in order to want him to, that's fine. So I hope not to have to think about Dorsey too much in the future. It's like, he keeps trying to bolt bitcoins onto things and they don't work, and he puts money into the bitcoin lightning network, which is a system to speed up bitcoin because it's useless for payments. The lightning network doesn't work either, it can't work, and people have been saying that since it was first mooted. Specifically, it cannot solve the problem of bitcoin not scaling. I say that lightning network can't work, bitcoiners say: Ah, but I sent this transaction through it. But it can't scale. It's just a misunderstanding of everything to do with how payments work in practice. And it's literally a payments guy doing it. That's one thing I'm baffled by. PM: I think that makes sense. I guess to ask you a few bigger questions as we kind of wrap up our conversation. I think on the first bit of it, we've been talking a lot about these various social media platforms because Dorsey has been really involved in this space for a long time. Obviously he was at Twitter. He helped create through funding one of the alternatives to Twitter that people were supposedly going to move to after must took over. He's put money into Nostr. DG: I'll give Dorsey credit for his actual things. He's done things. PM: Definitely. But I guess my question is, now that Elon Musk has owned Twitter for what, a year and a half or so, and we're kind of in this space where, okay, we've seen some people move to these alternative platforms, whether it's Mastodon or Bluesky, Threads, of course, but there are still a lot of people on Twitter. What do you make of the state of kind of that part of the social media landscape and the not super successful exodus from Twitter, but also what happened once people did try to leave and interact with these new platforms ? I wonder if you have some reflections on what we've seen over the past year and a half. DG: I'm on lots of social networks. I stick on Twitter basically because it's work. I'm writing about crypto. I'm a huge skeptic, but I have to be on Twitter. And it's still slightly fun. And some of the stuff Elon comes out with, I'm going to ride this bomb down to Russia, waving my cowboy hat and going yeehaw. I'm not abandoning Titanic at this early stage. It's just too much fun with this iceberg. I want to see what happens. But I think the center has been broken. Twitter was the center of the social media universe. It wasn't the biggest network. It was not the biggest network. It punched well above its weight, and that is because it was where the journalists hung out. Then Elon deliberately repelled the journalists. Some of them have come to Bluesky where they get people happy to throw tomatoes at them if they say dumb stuff or write dumb stuff. Some are up to the task. Some decide that they've got too much other things to do in their life, and that's fine. Mastodon will not be the center of anything. It's a network. It's going; it's going to keep going. But Mastodon remains fundamentally, it's the social network for people who have opinions on Linux distros. Facebook, I'm on Facebook still because I have friends I've known for 30 or 40 years and I'll never see them anywhere else. But it's a sort of residual audience. We're there for our few, our old, old people for our old friends. Facebook's moments past. Ed Zitron's been writing some good stuff about this lately. Facebook's done that fatal thing where they start changing their sort of metrics in their content quarterly reports and you go, why are you changing the numbers? What would the old numbers look like? So the little sub Twitters that have started, I mean, Bluesky has got a vital social network, but it's got no income stream. As I said, I worry about that. Where's the next penny coming from? If Bluesky goes broke, is anyone going to adopt the app and where are they gonna get money from? We don't even know what it costs to run Bluesky. They will tell you how much it costs to set up a personal data server, a reasonable Ubuntu box at a hosting company. You can't run it without the huge relay server, which is actually the centralized core of the decentralized network. I have asked repeatedly what does it take to run a relay server? I cannot get a straight answer from them. They really don't want to tell people what it really takes to run BlueSky. So that's a bit worrying. The other alternatives, Cohost is like a happy little social network, but it's got financial problems. But the people who don't really love it, like BlueSky. Post.news died. Spoutible is having a lot of problems; it's technically inept. I don't think the alternatives are going to go anywhere except maybe as a niche. And even then, I would say just get a couple of Akkoma, which is the best Pleroma fork, set it up as a private network and see what you can do with it. You have basically all you've got for Twitter or Bluesky and you can federate if you want to. After Reddit had its big implosion last year, the subs that I'm on left, some of the set up on like a Lemmy server, which is like a fediverse version of Reddit. It's a Reddit clone, post links and you click them up and down, but you can federate and it federates with Mastodon and that's actually taken off really well. We've got a community called Tech Takes, which is all about sort of tech bros. And these days it's all about AI because that's what we'll take pros are about, but it's basically orange site people piss you off post here. And that's really taken off. It's very popular on Lemmy-verse. And we've got regulars who post and read from Mastodon. So there's some compatibility, but I mean, this sort of thing, it can work. And that's just a hobby server, by the way. The guy runs it because he's well-off sysadmin and he runs it for fun. But if he needed money, we'd probably chuck in a few bucks. It doesn't take a lot to run these things. So, there's alternatives out there. I think the way that social networks grow is one sort of sub community at a time, as in you join Facebook or something because a bunch of your friends do. That's why I joined. You move to, say, Dreamwidth because a bunch of your friends are posting there and you want to be a part of their conversations. You join Google Plus because a bunch of your friends has moved from Facebook and is giving this new place a go. You basically move one small friend group at a time. So I think as with all things, the center is obsolete and everything is the great cultural fragmentation and now it's come to social media. I could be wrong! Maybe Twitter will finally, I shudder to say, that I'm looking forward to the Morgan Stanley era of Twitter. PM: \[laughs\] I'll be interested to see that. DG: Can you imagine advocating for centrists to come in and take something over? They would do a better job because they might actually know how to run a business. You cannot run a far-right conservative free speech site unless you have a billionaire subsidizing it with piles and piles of money. There is no market for this stuff. Go fash, lose cash. If there was a market for this sort of thing, Parlor would be a new tech giant and not dead. This doesn't work! This literally doesn't work. There literally isn't a market for this garbage. It's only working now because Elon is pouring in his Tesla money and he's run out of that. So he had to beg Tesla for more money for free just because I want it. PM: He just got his big $50 billion payout. So now he'll be able to run Twitter for a long time. DG: But you wonder how the numbers are, Tesla is basically a meme stock. It's a meme stock with a car company attached. I think there's probably a car business under there if they could get Elon out of it. But the stock prices are meme stock. And a lot of people have said Tesla's numbers are really dodgy and it's functionally a Ponzi. And this is actually not a bizarre claim. So I think that the future of social media is fragmentation and individual friend groups gathering in a place. But it always has been. What we will lack is that cross fertilization that was really trivial on Twitter. If you wanted to know something about some obscure area, you could literally find the guy who was a professor of it and delighted in their public role as an educator and propagator of knowledge. And they'd just tell you stuff because they were delighted someone was interested, and that's awesome. That was really cool. And if we get the Morgan Stanley of Twitter, it might come back or it might be too late. I don't know. A lot of people have left. Twitter's almost readable because I run a Blue Blocker and I've blocked 250,000 blue ticks and they deserved it. So I unblocked them one at a time. So I don't know. I still spend all my time on social media because what am I going to do? I'm going to shitpost on Bluesky. Let's be fair, Bluesky is my desired shitposting location. It works for shitposting. PM: It's interesting to see, over the past year, how I use the platforms has changed. I use a lot of social media platforms. I'm on Twitter more for work stuff. Bluesky is more where I do my fun posts and my more personal stuff. And you know what? I find Mastodon has gotten better over the past year. The platform I hate the most now is Threads. I even hate posting there because the people who show up in my replies are the worst. DG: I am not going to Threads under any circumstances. I'm sure there are people who love it. PM: I don't understand those people. DG: It's Twitter is sometimes useful for getting the pulse of things, but it's sort of losing that a lot. You have to have a very refined and filtered approach, which means running Blue Blocker. PM: No, I hear you. I think my final question for you, David, as we start to close this down, you were following the crypto industry moment for long before it was a moment for for many years, you were following what was happening in that space, it's kind of initial rises and falls. And then, of course, the big bubble that we saw in the early like pandemic years, and, that's collapsed. And now, it's still doing its thing and it goes up and down and blah, blah, blah. But, we've entered this new moment where we're the past year and a half, everyone in the tech industry has been obsessed with AI and it's all that they can talk about and it's everywhere. And it very much feels that we're in an AI bubble now as well. And the question is when does this implode too? So do you see any similarities between like the, the crypto bubble, the crypto moment, and then what we're seeing with AI now, what's your reflection on all that? DG: It turns out I do. I co-write with Amy Castor, who is another crypto journalist. We discovered we collaborate really well. We wrote a lot of stuff together. We wrote a few posts over the last year about AI saying pivot to AI because we were seeing all these crypto guys pivoting to AI, the VCs, the same VCs, the same promoters, and they're using the same excuses. When you see AI guys talk about its power consumption, they're literally using Bitcoin mining excuses, word for word, it's dumb as hell. So it got to the stage where Amy and I just now started a site, pivot-to-ai.com. The elevated pitch is it's Web3 is Going Great, but it's AI. Molly White approved; she said: Good, now people won't tell me to start one. So that's actually, we're posting like once a day and it's like really easy and it turns out we both realize we've been really hating right about crypto because nothing's happening. It's dead. It's boring. The only people who care about crypto now are people who read Matt Levine every day, people who are nerds about finance. It's still fascinating, but the public has had a gutful. They really do not want to know. The Bitcoin price went up recently to its previous height, bubble heights. That rise was fake and we traced exactly how it was fake. It's a pile of dubious stable coins on Binance pumping the price, literally just fake money. They pumped it with fake money and they could only get it up to that high. There was no trading interest from retail on Coinbase in actual dollars. And that's why no one took it seriously because it was like a hot air balloon. I don't think crypto has any life in it. They're desperately spending more money than anyone has in the US elections lobbying for crypto. I don't think that will bring the magic back for them. I don't think they've got a hope. I think the public just is not buying their nonsense. The Treasury and the Federal Reserve and the people who take the US dollar extremely seriously and the economy extremely seriously are not putting up with these assholes. They are desperately afraid that these incompetent bozos will screw up the real economy. And people have good reason to be upset at the state of the economy right now because at the bottom end that it's not very nice, but it could be worse. And it will be worse if these guys get in. So with the demise of the Chevron deference in the Supreme court, suddenly their regulations are obsolete. If you have a sufficiently insane Republican judge. And so the US economy will probably get hyperinflation from the Bitcoin guys anyway. So I don't know, I guess climate change will kick in and we all die of starvation in five years, but it was a good run. At least we have Bluesky. It may not run out of money by then. PM: Hopeful note to end on. My final question thinking about like the AI moment and the relationship to crypto is what you make of NVIDIA or if you have any thoughts because that seems to be the company that has soared the most because of this bubble and it feels like it's prepared to crash at any moment. DG: So NVIDIA, it's important to know NVIDIA is the one AI company of substance, that is, they do a roaring trade, making useful things that do exactly what they're advertised as doing video cards. You can play games with them! So I know NVIDIA people, and ex-NVIDIA people. And they ignore the stock price. They think Mr. Market is generally on crack and they just get on with making video cards. The stock price has gone up and down. NVIDIA's technical fortunes have gone up and down. The CEO, Jensen Huang, spoke recently and talked a lot of AI builds about how it would definitely go up forever, and no sane person listening could hear anything other than, lol, it's a bubble, you idiots. I'm making money while I can, where's the coke? I certainly wouldn't attribute drug use to him though, I must clarify. But he's got a good reputation as the manager from actual NVIDIA employees that he knows his stuff and he knows what he's doing. So NVIDIA is actually the only company that isn't full of liars. They know very well they're in a moment. They're making money while there's money to be made. The stock price is on crack. NVIDIA is one of the largest members of the NASDAQ average and of the S& P 500. So when AI crashes, NVIDIA will be out of the bubble economy and it's going to hurt the numbers. Now, how panic that makes the rest of business and how much they screw over people who actually do things for a living, it won't be fun, but nothing ever is, I guess we will still have video cards, all of that computing power. I mean, most of it doesn't even have video ports. It's just number crunching cards. It's actually useful. You can do a lot of science with that stuff. You can turn it into good human uses. You can turn it into bad human uses. You can turn it into uses that aren't AI. Things that actually achieve a goal that a person might have weather prediction! Useful stuff! So, I expect what we'll have left over from the AI revolution is some technologies that do things. LLMs might be used for sane uses, if there are any, but they won't be used to to stop AI. Lying spam machines. There's a place for a super duper spell checker, autocomplete machine learning is going forward as well. AI has literally always been a marketing term since 1954. It's been a marketing term, not a technology. The current AI bubble, AI spring is different from previous ones because previous ones were always the department of defense funding them, because they hope to create a magical robot that would shoot people. Maybe they've got that now. They don't need to go anymore. So this one is basically funded by venture capital because they're not being taxed enough. There's family offices, pension funds, sovereign wealth funds. They've got literally hundreds of billions into the trillions of dollars desperately looking for a home. They need a bubble. There isn't one. So they're going to fake one. They tried crypto; it didn't work. It failed. AI, it actually does things. They bubbled this one. But even they're running out of patience because these companies are just not producing. Even The Economist had an article about how this stuff wasn't actually driving the real economy at all. Number is up, but number is a derivative of the real economy. And so they're losing patience. I gave it about two years. But around March, we were asking around a lot of AI peons in the companies, and they were all giving it nine months, end of 2024, is when the funders will finally lose patience. Ed Zitron gave it about the same. So I guess I predicted two years, but they all predict nine months or six months now. So I don't know. We could be wrong, might last longer, might last shorter. This shit doesn't work. I think that's very important. It doesn't work. It's never worked. And to the extent it does work is extremely limited. And these numbers are not sustainable. So it's going to crash. I don't know what they'll do in place of it. I think they're only holding onto AI because they really cannot find a replacement. I thought they might try to move into quantum. There's a lot of nonsense quantum computing being sold. Quantum computing does not work yet. When it does work, it'll be huge. That'll be in 30 years. Not in 2024 right now, quantum cannot crack your crypto. It cannot revolutionize numerical problems. You can't do any of that stuff. It cannot reliably factor numbers as high as 35. So maybe it's not quite there yet, but companies are paying actual money, millions of dollars for beautiful science experiments that should be on a lab bench and not pretending to be a commercial enterprise. And it's just absolute misselling. It's nonsense, but maybe they'll try to get into quantum. PM: That might be the next big thing. I'm hopeful with what you say about NVIDIA, like that they understand they're in a bubble and they're just going to take advantage of the stock price while it's up, but just keep kind of chugging away at what they're doing. DG: NVIDIA is a real company that makes things. They're not a bull merchant. They make video cards or they design video cards, farm them out and sell them. And they make real things, and that people want that there's actual demand for the demand is stupid. The demand is transient. They know it. I think they'll survive just fine. So they're the shovel seller. They can stop making shovels. They can make shovels to match market demand. PM: I think the other thing that stood out in what you were saying as well is, obviously I'm outside the United States. You are as well. We often hear these stories about how the US economy is thriving and doing so well right now. And so many other parts of the world are really struggling. And yes, there are difficulties in other Western economies. But I think that often doesn't take into account the fact that, and the degree to which the US economy and the US stock market in particular, which a lot of that is often based on, is in a massive bubble right now because of AI, and that's eventually going to come down and things are going to stabilize and return to some sort of normal. DG: I mean, Canada and UK are both vassal states of the US economy. PM: Totally. DG: The UK was stupid enough to unhook itself from Europe, so I guess we're screwed. PM: Well, David, it was great to speak with you. Great to pick your mind about Dorsey and crypto and AI and all these other things. Thanks so much for taking the time to come on the show. DG: Thank you.