Michael Hudson talks to the Bitcoin SV Train channel about Bitcoin and data ownership (READ or WATCH).
On 29 October 2019, Jon Southurst from the Bitcoin SV Train sat down with Michael Hudson (CEO-Founder of Bitstocks) to talk about the importance of data ownership and how Bitcoin (BSV) makes it possible. By the end of this discussion, you'll know a few more secrets about the Universe itself.
We invite you to read the redacted transcript below or watch the video. If you’re short on time, the video index will allow you to jump straight to the topics that interest you most.
00:00:16 - Introduction to Michael, Bitstocks and Bitstocks’ Gravity.
00:06:14 - The meaning of Michael’s necklace and pendants.
00:08:57 - Michael on data ownership: “Data is the currency of this planet.”
00:13:06 - “Bitcoin’s ultimate objective is to become the most centralised system on the planet.”
00:16:10 - The ramifications of entrusting data to entities lacking accountability and traceability.
00:19:41 - Bitcoin as an alternative global data system: “Everything, but nothing.”
00:25:40 - Bitcoin as memory.
00:27:23 - The connection between Bitcoin’s theory and philosophy, and ‘real’ life.
00:30:35 - How Bitcoin increases our ownership of our data.
00:34:52 - The Bitcoin SV projects and teams that are leading the way.
00:37:28 - How the Bitcoin SV community’s ethos compares to the crypto space.
00:43:03 - Corporate interest group’s weaponisation of social media.
00:45:25 - The value of Bitcoin’s ability to lend immutability to memory.
00:47:22 - Michael on his vision for Bitstocks’ Gravity.
00:57:52 - Michael’s recommended resources.
Jon: Today, I particularly wanted to talk to you about owning your personal data. It's such a big deal. Still, not many people realise the ramifications of the data they're creating on channels that are non-transparent about how they'll be using that data and whether it'll be in the individual's best interest. So, Michael, what's your current thinking about data ownership? And, what you're working on that could improve the status quo?
Michael: Well, I was actually quite excited to have this conversation with you because I really think this topic is the meat and potatoes of society's centralised data collection system. Data is the currency of this planet, and there are so many misconceptions around this topic, including around artificial intelligence. People don't understand what data is, why it's important to retain ownership of our own data. People don't understand that owning your own data will be the be-all and end-all of the data-based economy that we're creating. Right now, we don't have ownership. We’re emitting data, but we don’t have ownership.
So everyone’s looking for AI, right? Everyone's looking to Elon Musk and on TV to understand artificial intelligence, and the image that's portrayed is terrifying to many people. But there's a lot of misconceptions about artificial intelligence, and it's connected to our misunderstanding of what Bitcoin truly is.
But before I dive into that topic, we first have to understand what AI looks like today, and how we're already interacting with it.
Let's take information systems like Google. Right now we're all interacting with Google, a system that operates as a centralised server for our data. And all of the people who are using Google are tied to them by strings that extract our data. If we don't like the arrangement anymore, we could try to cut the string, but we'd find that we're tied to several other centralised databases, like Facebook. If you shut down your Facebook account, you still have a string connected to you from Instagram, and an entire suite of companies.
So there are all of these strings, or IV drips going from us to Google or Facebook. But unlike an IV drip that gives nutrition, these strings are extracting our data and selling it back to us. If you throw corporate interests in the mix, they’re demanding even more data extraction. In the end, we're walking around like zombies with all of these IV drips to Google, Facebook, Snapchat, etc.
The one-way flow of value is the greatest flaw of this system. And as soon as we move towards a system where we immerse ourselves in this IOT environment we've created, we've lost our sovereignty. In an immersive world, Google wouldn’t only be monitoring everything you're doing on your device but the cameras in your home etc. Once we've given away the various data streams relating to our daily lives, we've become data slaves.
Yesterday I tweeted that people don't understand that Bitcoin's ultimate objective is to become the most centralised system on the planet. Here's what I mean by that: in the current data collection system, each individual is tapped for data, but the collective data pool is dispersed between different operators. The result is that the value of the data pool is severely diluted. This scenario is reminiscent of the Bitcoin Core network: you've got a lot of strings in the network, but there's no density in the middle.
If we changed the model to one where all strings are connected to a single system, humanity would be able to draw an incredible amount of value from the collective data pool, or collective consciousness. The way I envision such a system is that you'd allow people to opt-in and opt-out, and the data pool will contract or expand accordingly, like lungs breathing in and out.
Here's what it would look like in a real-world environment: I'm at home surfing the web in my smart home, but I've had one too many bottles of water, and I need the toilet. I head to the loo where I've got a smart device in my toilet. I could have the system scan my urine and compare the results against the health records of the public database. If I decide to opt-in, I contribute my data to the system, but I also get access to the hive's data. Data would obviously be shared pseudonymously, not by ID, and you'd be paid as an incentive for contributing your own data to the hive. There will be times when people will opt-out, and the data pool will contract in terms of its intellectual capacity. But if there are enough incentives built into the system, we'll see information flowing freely, making the system smarter and smarter over time. If we could surf such a system, it makes Jarvis-like AI very possible because the system would be plugged in to all the data of human interactions.
Once we've solved the matter of ownership over our own data, the next challenge is how to break through the interface barrier so we can move beyond mobile phone devices to get the maximum benefit out of the hive mind.
Jon: The way you describe it, having access to all of humankind's information sounds wonderful. But, we have a basic version of that with the Internet, and it's turned into such a dystopian situation. Initially, companies like Google set out to become the repository for all the world's data, but it's turned into this...
Michael: The reason it's turned out so badly is because you can't fulfill the vision without accountability and traceability. Without those two principles, the system becomes cancerous and serving corporate interests alone. For people to protect their interests in this situation, they'd have to ensure they're educated on how the world is actually run so they can discern when corporate interests have seeped into the mix.
Unfortunately, most people have very little understanding of how the world is run. Most people assume that the United States of America has fifty States when, in fact, there's a hundred. By the legal definition of a State, there's 50 States. But then there are the States in themselves. So, you have the State of California, but there's also California State, and they have two very different legal definitions. So, this is why America has a President because the only way you can have a president is if there's a corporation. And as a corporation, you also need a board, in this case, Congress. But most people don't understand that they're living in a society that's constructed as a centralised system.
With all these convoluted corporate interests swimming around this centralised system, they can manipulate the system to fulfil their own agenda. Look at the 2016 U.S. election rigging, right? Soros and Hillary Clinton were both involved in all of the crazy things going on because Google was at the very centre of the system aiding them.
As a consequence of what happened in 2016, truth speakers are being censored by these platforms. I see that even Joe Rogan, Unbox Therapy, MKBHD are all worried about being de-platformed by YouTube. It's because all these corporate interests are coming into the mix so aggressively that people are becoming aware of it. So these corporates aren't even trying to hide what they're up to anymore, and they're becoming even more aggressive. Right now, there's a merger happening between the owners of mainstream media and the big four banks. The largest shareholders are Facebook and Google.
So, there's no separation between mainstream media and how the Internet has been run today with social media. People need to be aware of these things. What I'm not saying is, that's it! Stop using Google and Facebook right now. No, rather be aware that there's a string connected to you that's extracting data from you and passing it to Facebook and Twitter. No matter how much we bitch and moan about them, the users, the density is on Twitter, YouTube and Facebook right now.
The most important thing is just to be aware of it as we are building an alternative. Once the new system is available, then you can start moving over. But for now, we need to find better ways to utilise Facebook, Google and these services while having more ownership of our data. And that's possible within Bitcoin right now, but being fully immersed inside of Bitcoin is still a while away.
Jon: The services you mention, they are just the ones we know of. What's more insidious is all of the services we've never even heard of that are gathering data on us. Think of the analytics companies that are tracking everything we do on the Internet. I don't even know the names of some of these companies. I could theoretically delete my Facebook account, and if I'm naive, I'll trust that they've actually deleted the data, but I don't think they ever do. I don't know if it's possible at this stage to actually extract yourself from that network. We're already in the Matrix, you could say.
Jon: I think it's great that Bitcoin gives us a chance to build an alternative. I'm just wondering how do we get there from this dire situation we find ourselves in?
Michael: Well, if your aim is to build a global network, your goal should be to make the system all-consuming. So, Bitcoin's objective should be to have every interaction documented on top of it. And once you have every interaction on top of Bitcoin, I'm talking about human-to-human, human-to-machine, and machine-to-machine interactions; then all the strings are connected to one place. I'm even talking about the string going to your toaster. And this is why I say the largest number in the universe is 1.
Let me give you a biological example of that. Right now, you’re one being - just like me and everyone else walking around on this planet. But within your one being, there are a hundred trillion cells each containing the image of the whole. And in each one of those hundred trillion cells, you have a hundred trillion atoms, and each one of those atoms contains the image of the whole.
Jon: This is sounding like holographic universe theory. Which I quite like, by the way.
Michael: A holographic universe, indeed.
So, how can 1 be the largest number? Well, you represent one. You are one being. If you were in a room by yourself and someone asked me how many people are in that room, I'd say one. And yet you are a combination of all of these things. One cell contains the image of the whole universe. This leads us to what Zero-Point Energy and Unified field theory are all about. If all of the information of the universe is contained in the smallest image of itself, then extracting information and energy from the smallest unit should provide access to the universal.
It's what Einstein was working on in the second half of his life. It's the Holy Grail of understanding the connection between us all. If you didn't take that thinking back to Bitcoin, the ultimate objective of Bitcoin is to amount to 1. We are the cells - a hundred trillion of them. Our interactions, machine-to-machine, human-to-machine, are all connected in this way. All of our thoughts, all of our interactions are contained within this machine.
This gives you infinite possibilities for interaction. And if we have a spike of innovation, that just means the system expands, but all of the connections are still within the boundaries of my hands. We still have just you, 1 person, Jon, in that room. I will always have to count Bitcoin as 1, and that is the ultimate objective of Bitcoin.
This is what scaling Bitcoin is about because we need to work out how the hell we could have a system that can contain everything at the same time. And this is why you don't limit the mempool. You don't limit the block size. Because how can you understand the scope of the breath this system wants to take?
Imagine you're just walking around London, your lungs would be breathing comfortably. But if you decided to sprint up a mountain, your lungs would have to adjust and take rapid and deep breaths. It wouldn't work if your lungs' capacity were limited. But this is what developers are doing and why we have the big issue with scaling.
Bitcoin SV understands this, and it takes into account the corporate structure, and this is why it's got no competition. There's no other way of doing this. You have to make Bitcoin all-consuming: it has to be everything, and nothing at the same time.
And this is what I announced at CoinGeek London when I said that the inspiration for Bitstocks’ Gravity is to become everything, yet nothing. Like air, which is everything but nothing. You only know when it's not there.
Jon: There's a lot to ponder there and a lot of different rabbit holes we can go down. After all this, I'm starting to wonder if we should've called it something other than Bitcoin. Bitcoin sounds like digital money, and a lot of people think of it that way. And yet, Bitcoin SV is definitely looking at becoming something much larger than that.
Michael: Bitcoin is memory, that's it. If you look at yourself, you are Jon because of the memory that you hold of your life, which makes you, you. That's what contains the whole; it's your memory. And that's what Bitcoin is. And yet some people look at the statement and think, is that all it is, memory? And I'm like, dude you don't understand memory! Memory's all-consuming, it's the recording of everything. Time itself is the movement of matter through space, and the record of that movement is what time is. And if there‘s no movement, there’s no time. So, memory is an incredible ambition for Bitcoin.
Jon: Absolutely. I kind of wish my memory was as immutable as the Bitcoin ledger. Although some people say that we never truly forget anything, we lose the ability to retrieve and recollect it. With the right prompting, sometimes a smell, a colour, or a piece of music could unlock this whole case of memories you never even realise you had.
Michael: Absolutely. You know that with phobias, some people have no idea why they're terrified of swimming. Then there will be a memory within your DNA that can unlock the answer to that.
Jon: I find all these topics fascinating. But a lot of people, including me, still struggle to make the connection between the philosophy and theory on one hand, and our real-life experiences on the other. A lot of people will turn this off and walk out the door.
Still, they wouldn't really be thinking about their place in the universe, how the data they're creating is being used to sell products, to develop health care systems, or to allocate resources, or something more nefarious. I think it's dangerous in a way. Do you think people should think more holistically when they're out and about?
Michael: I try not to be very judgmental on this because I'm not the product of a couple of nights of study. I've been looking into this very aggressively for 50% of my life, and I'm 32 now. I've been studying these subject matters for all that time, and that's how long it's taken me to get to a place where I'm standing on top of the mountain, looking down and seeing the connections and patterns in how society is being orchestrated.
It's important for people to look into these things because if you can't see it, there's a high probability that you're feeding the Beast and you're blinded to it. You're not seeing that you've got these IV drips connected to you,extracting value from you, and you have no idea if it's become dangerous.
People who have put in the effort to attain the knowledge of what's going on have an advantage and an edge. Right now, my core motivation is to educate people on these topics so they can obtain the knowledge and understanding they need. To me, making money is about having enough resources to execute my plan. The reason why I need a lot of it is because of the scale of my plan. In the coming months, we'll be revealing more about the plan.
In relation to Bitstocks and Gravity, our purpose is very much humanitarian. Learning to teach and teaching to learn will be a core of it. If more people take the same approach, hopefully, there won't be so many people blindly feeding the Beast.
Jon: I see. This takes me back to something I was thinking about before. You know, how Bitcoin increase our ownership over our data? I think it has the potential to become what Google is. It starts quite innocuous, people trust it, and they feed a lot of energy into it. But before they realise it, some force that shouldn't ever have been trusted is in control of the whole thing. Can that happen with Bitcoin, or is Bitcoin immune to that?
Michael: It can happen, but it would have to be extremely well orchestrated. And even then, if we look at the mining system and the economic incentives, the only way the system can be sustained if it was benevolent. The mining process is probably one of the most genius aspects of Bitcoin, and I'm not talking about the nerdy crypto side of it.
If you look at the human behavioural guarantees that Bitcoin enforces, it means that it doesn't matter who you are or where you are. It doesn't matter what your religious, political, or racial beliefs are. It doesn't matter if you rest your head in Afghanistan or America. Nobody wants to set fire to their own wallet. And that commonality of capital transcends race, age, religion, creed, and all of these things that are used to divide us. The one thing that unites us all is the necessity for money.
So, the Bitcoin system takes human beings' desire to profit, ultimately we're talking about greed, and converts it into a security model. That's genius! That's our greatest protection mechanism - having a system that sustainably ensures that negative energy beams out at the top of the pyramid. And this is what I mean when I say that Bitcoin lets you assess the polarity.
What we can't do is to say that, because we have Bitcoin on a planet, and we throw a thousand people into one room, everyone's going to be benevolent. It's life, right? You've got a Yin, and you've got the Yang. But with Bitcoin you can assess the polarity.
Jon: I often wonder what the ratio is. Depends on the day?
Michael: The ratio should hopefully improve when you create a societal environment that's economically incentivised by the core utilisation of what money is: the ability to price skill and labour, ultimately someone's time. If we allow the pricing of labour and skill to be pure, we'll have a world where we can trade more openly and freely.
And that's the key to how Africa could become a powerhouse. That's how these impoverished places around the world could become powerhouses. Bitcoin can enable this, not just by being the universal reference of money and skill. That would be great too. I'll be honest with you, and I'm saying this as a guy who's building a bank on top of Bitcoin: I think that's still a way off in the future. We still have to go through a few different iterations before we can consider Bitcoin the be-all and end-all from a monetary standpoint.
Utilising it as memory, that's the ultimate goal, and this is how we'll smooth out the volatility because Bitcoin will become air. When we get to this stage, people won't ask, "how many Bitcoin will it cost for me to buy a loaf of bread?" At that point, Bitcoin will become invisible like the air we breathe.
We're still a way off from that, but we're very aggressively marching in that direction, with our eyes open and focused on that goal. Bitcoin SV is the only chain that's advancing in that direction.
Jon: That's true. It's definitely the only one that has that kind of ambition. Going back to the start of this interview, this is quite an important thing.
Do you see anyone else working in Bitcoin (and of course when we say Bitcoin we mean Bitcoin SV, because it's the only one that can exponentially scale in the way we need it to build the structures we're talking about) that you think, that guy's got it, or that team is right on the money there?
Michael: There's a lot in Bitcoin SV. There's Alex Agut from Handcash, whom I've called up before because I have such interesting chats with him. He really gets it. There's Rafa Jiménez, his business partner. There are the obvious ones, like Craig, etc., who don't work to get noticed even though he pioneered the whole space. He obviously gets it. There's Ryan X. Charles, who's awesome. There's also Joel Dalais, with whom I had a chat with, and he really impressed me with the way he sees the mempool. I actually thought I was one of a very few people who saw the mempool that way.
This is the thing I love about Bitcoin SV. I'm getting more clarity and I’ve had more high-quality conversations in the last year than I had in the previous five years because we're all centralised into this SV community. The people who can actually see what is going on are fortunately in the Bitcoin SV community. There's not much talent outside of BSV.
Jon: I would have to agree with you there. It's one of the problems I had with the whole Bitcoin and crypto scene before all this forking happened. The whole conversation had degenerated to gossip and price talk. I couldn't find any philosophy, and I didn't see anyone looking at the reason for what we're doing. Everyone was just speculating, and it was getting really boring.
The period that Bitcoin Cash existed without Bitcoin SV was a bit of an improvement. But when Bitcoin SV forked, I found that all the people who wanted to have interesting discussions went to Bitcoin SV. The BSV community is the only one who's talking about all that stuff we talked about in 2012, like why does Bitcoin exist and what are we doing here, what exactly are we building here?