Dr. Mark Stephany | [Digital Money Series] Alleviating Poverty and Improving the Environment With Bitcoin: Making the Progressive Case

John Corcoran 11:57

Yeah. Since you mentioned it, I want to ask about the way that Bitcoin has been used abroad. So, you know, I think what people have seen is that it’s been widespread adoption in places where the currency has been devalued, because they don’t have a store of value for their money. So you’ve seen that in Argentina, you’ve seen it in the places in the Middle East, Syria, places, places like that. Talk a little bit about what we’ve seen in countries where there’s really unstable currency.

Dr. Mark Stephany 12:30

Exactly. And it’s used more often in those countries as a medium of exchange, because of some of his character bitcoins characteristics, meaning it’s not unconscious skateable and it’s permissionless. And its ease of use. And so it disinflationary as well. So what does that mean? Why I think it’s kind of helpful then to define why I think Bitcoin is progressive if that’s if that’s okay with you dovetails perfectly to this question. And in order to tell you why I believe bitcoin is progressive, I think it’s important for listeners to understand that Bitcoin has been seen through the lens of communism, conservative ism, progressivism liberal terian socialist, it’s been written about through the lens of Christianity, Islam, halal Buddhism, all of these things people have have viewed Bitcoin through those, those systems, those belief systems. So you have to understand there’s this there’s this unifying element there that people are finding. And I just happen to believe that there’s also a progressive lens and it is helpful to define well what is progressivism to me and I believe it’s kind of a little P progressive, meaning I give a damn about others. And I give a damn about historically marginalized communities equality in the in the environment. When I first started the podcast, and then people thought it was capital BT P progressive, and I was going to have government come in and want to change the protocol because I believe in centralized authority on all this and which is just a big leap of judgment for my intentions. But that’s the furthest thing from the truth. And so why do I say bitcoins progressive? I think you can just go through the simple exercise of looking at the antonyms of these characteristics of Bitcoin. So Bitcoin is an open nondiscriminatory, portable disinflationary and non confiscate double monetary protocol. So if you look at one of those open, no one entity controls a network. It’s open source, anybody can see the code. You can’t change the rules, any one person. Compare that to a closed network. closed network is one that’s an authoritarian leader, or a few Federal Reserve chairs behind closed doors for politicians. Non discriminatory. Bitcoin is blind to its users. Anyone can use it. It doesn’t care about your age. It doesn’t care about your gender, your credit score your race or your record. So you You flip that to discriminatory system, what’s a discriminatory system? Well, one could argue that it’s very much like the one that we have, applying for loans, applying for a mortgage applying for a savings account. All of those are layers of discriminatory practices that many in the United States and more so worldwide base, okay? In portable and go anywhere, I can memorize a few words and travel anywhere with with my bitcoin. Compare that to deep the people of Crete who, overnight lose their their savings accounts. Right. And disinflationary, as you’re alluding to Bitcoin, there’s more and more Bitcoin being added up until the year 2140, but over a less and less amount over time. And then it’s capped at 21 million. And so that provides, you know, a feature much like gold, where there’s a limited supply Naza, inflationary in the double or triple digits that many people face worldwide. So to that extent, it is very much a money that people find beneficial for those characteristics in I think those characteristics are much more in demand, so to speak, in environments under authoritarian regimes, under higher inflation rates, and it becomes more of a medium of exchange. In those systems, as opposed to here in the United States, we aren’t spending as much in United States because we’re not faced with those double triple digit inflation, not to mention that you’re taxed on it. So there’s that relationship for people who live in so called underdeveloped countries. Right, right.

John Corcoran 16:49

What about for? I know, poverty is an issue that you care a lot about, what about for someone who’s listening to this, who is on the lower end of the economic spectrum here in the United States? What’s your argument to them for why they should take Bitcoin seriously, or why they should understand it better, and perhaps put some of their wealth in it.

Dr. Mark Stephany 17:13

Over the past 50 years of economic growth, development of all the technology, technological advancements, and the financial gain that has been brought from that most of us have not received those benefits, right, all of that money got pushed higher or higher, up the top 1%. And that’s what we’re seeing, nobody majority was to not get to benefit from that financial windfall. And it only gets worse, the further down the economic ladder, you go, you don’t have access to seed rounds, or Series A, we lock people out of those investments, simply because of the amount of money that they made, not their intelligence, not their skills, but the amount of money that they make. So the people who already have the money, get to make more money. That’s Know Your Customer rules. And then you go down the line. It’s I think, around 50% of America owns traditional stocks and mutual funds. So if you don’t have those, you are losing money, year after year after year, due to loss of purchasing, purchasing power and inflation. So you’re falling further and further behind. Only individually, but from a generational wealth standpoint, as well. So you’re never going to get ahead and your grandkids are never going to get ahead, because you don’t have access to those assets. You may have some money, but then you get locked out because of other discriminatory practices. Or maybe you don’t have the right identification, or Yeah, minimum deposit requirements, all these things, KYC, AML, et cetera, locks people out of a financial system. That is the only way of protecting them from loss of their purchasing power over time. So the unique characteristic of about Bitcoin, again, is that it doesn’t care about your credit score. It doesn’t care if you have a record doesn’t care about your age. Moreover, you don’t have there’s no minimum deposit, there’s no overdraft fees, you can set aside $1 a week in into Bitcoin and let that sit there over time. Yes, I know there’s the question of volatility volatility, but that I understand that the critique and we can talk about that if you want, but this is this is a long term play. This is not trading this is not a year in thing that you’re going to try to cash out. This is about putting away and saving over time that’s very much an ethos of Bitcoin is saving over time to put it to good use for your for your family. And so that’s what I would say Is that here for the first time in history, you have an asset. And I’ve put an asterix there too, because it’s so much more than that. That is the same thing to the billionaire, that it is to the to the person who’s working three jobs, you have the same access to an asset that has the potential for for providing you again, wealth that you would never have had access to otherwise. Yeah.

John Corcoran 20:29

And you mentioned the volatility piece. Let’s talk about that a little bit. I think the argument that I’ve heard from people is that, you know, a lot of times people compare it to other high growth stocks, like Amazon or Tesla or something like that, and point out that a lot of these other assets out there have had long periods of a lot of volatility. But what is what are your thoughts on the volatility behind bitcoin? Recent years?

Dr. Mark Stephany 20:53

Yeah, exactly. It’s volatile, it’s volatile up, and it’s volatile down, right. And if you’re, you hold it long enough. Just like any advice that would be given to you for any other part of your portfolio. It plays out, right. And so there’s this this year on volatility, I just don’t get bothered by anymore. But it’s also a product, again, of a nascent technology, and a limited supply. And so it doesn’t take much to move the market. We’ve seen dampening volatility since its inception. And there’s the expectation that that will continue to dissipate over time. Yeah.

John Corcoran 21:34

I wanted to ask you about you mentioned, some of the ideologies that have been attracted to Bitcoin, like libertarianism, I wanted to ask you, how has felt for you to to, to be surrounded by that that point of view, which is not the one that you’re most interested in, because that’s one thing that is kind of a disconnect for me, you know, as I’ve listened to other podcasts out there, and there are a lot of big podcasts now that talk about Bitcoin. A lot of them, I just don’t resonate with that particular perspective, a lot of it’s kind of very, very virulently anti government, you know, very much laissez faire, you know, remove all rules, remove all regulations, that kind of thing. I personally just feel that, you know, while government is not perfect, while regulation is not perfect. There’s a lot of good people that work in government, I worked alongside many of them. And, and it’s not the most perfect system in the world. But the certainly the system we have in the United States, the last 250 years, has produced a lot of wealth, a lot of great things. So I just want to ask you, for you, how’s it felt being in the company of people that are kind of you’re supporting the same underlying technology, but getting at it from a very different perspective.

Dr. Mark Stephany 22:56

You’re never gonna change minds nor think, have your mind changed on Twitter, and realizing that upfront is an important lesson. So I tried to take what is said, with a with a grain of salt, especially from anonymous accounts, I just like have no patience for that. But I think about what I do as a physician, and particular, over the past few years with COVID, I would have to sit at the bedside of individuals who, whose family members had died from COVID, who had been unvaccinated, and they sit there on a ventilator dying, as well yet still remained staunchly against vaccines, or any other medical intervention to try to help them because of some of their beliefs. I had to give up, fighting not to give up trying to make them wrong, or to give up wanting to be right and, and again, view them through the lens of of another and somebody who’s making bad choices. I had to do that because it was not helpful. What became helpful was trying to understand that person. Again, that’s not going to happen on Twitter. But I try to give these individuals the benefit of the doubt and try to understand where they’re coming from. Each one of us comes to Bitcoin with our own preconceived notions with our own experiences with our own ideologies. And it’s been said that Bitcoin is very much a Rorschach test, and you see in it what you want. I tried to better understand what others see in it, so that perhaps I can have a better understanding of that person, which in turn allows me to be a better person, which in turn allows me to shape what I believe to be effective. modalities, interventions for helping other people. And so yes, I don’t agree with a lot of the libertarian leanings. Or we’re on the opposite side, and some of the more far left views. But I want to understand, and again, that is incredibly difficult to do on Twitter. But it is so gratifying to be able to do in person, or or over the camera. And so that’s what I encourage people to, to try to do is not immediately dismiss ideas, not to dismiss an individual, but to try to better understand a lot of that just was a lot of questioning. And often when you do that, as individuals, like don’t have a why there’s no why behind the statements, and the statements were probably just seeking retweets, you know, and it’s at that point, you’re like, Okay, you know, your conviction is clearly a little shaky there and I move on.

John Corcoran 26:03

Yeah, you know, I think, personally, I’m drawn to ideas, concepts, new technologies, that aren’t easy to understand at face value, take a while to really get into them have some depth to them. I was fascinated by Tesla 1314 years ago, and no one had heard of it. I was fascinated by the idea of how that could change our transportation system. I got involved in a local environmental cause was an advisor to something that was a Community Choice aggregation, very hard to understand, but a quasi governmental agency, that has been a huge impact in reducing greenhouse gas emissions. And I want to pivot to asking about that about the environment, because that’s one of the knocks against Bitcoin that you hear over and over again, that oh, it’s bad for the environment, that it leads to a lot of additional emissions that leads to pollution, more energy consumption. What are your thoughts on that? And I know that this is a

Dr. Mark Stephany 27:02

very big topic. Absolutely. Thank you for bringing that up. Because it is important issue. And it’s a conversation that we should be having. It’s a conversation that we’ve been having for 50 odd years. And we remain frustrated and beaten down. Right? So I can tell you that Bitcoin only consumes point one, six are the world’s energy, I can tell you that big coin mining is one of the most renewable energy intensive industries in the world, if not the most, that approximately 60 odd percent of its energy use is by renewables. I can tell you that it’s reducing methane emissions at this very moment. But I mean, people just don’t care that the data is not enough. And that’s okay. I understand that position, because it’s such a shift in our thinking that we’ve been set in for decades now. And it’s hard to wrap your mind around I, you know, being a lifelong environmental advocate. i But admittedly, not knowing the the nuances of the issues. I assumed that it was a person problem. If we just had the right people in office, you know, things would be okay, we get the regulation pass, and everything would be good. Clearly, that hasn’t been the case. But in clearly the issue is much more complex. And as you study about it, not only about the technology, but about the grid about the players, let alone a worldwide solution, not just a solution for the United States, but a solution that’s going to enable the global south under well developed countries to meet climate mandates, while not impoverishing, further impoverishing their citizens, that is a very, very complicated task. And I took that complexity for granted. And I thought we could just flip a switch on renewables the next day and all would be well. And that is just simply not the case. Bitcoin mining is a part of that solution. But again, I can give you that data, I can tell you that it’s it’s greenhouse gas emissions is negligible worldwide. I can you know, and they gets compared to smaller nation states energy consumption, look how much it’s using, but it never gets compared to the United States and how much we’re consuming doesn’t get paid compared to the traditional banking system and in the the tons and tons of emissions that that is emitting and what what it ultimately comes down to, is not data. It comes down to whether or not you think Bitcoin has value or not. If you think it has value And then it’s worth that energy, it’s worth the energy that’s put into it in a turn the potential emissions that are being put out. So I hope I’ve convinced some of you at this point that there is value in Bitcoin. And not just for us in the US, but but globally. If you can start to think that maybe there is some value in this new technology, then the discussion of its energy use becomes a lot more fruitful. All right. And up until that point, then then it’s not a helpful discussion, because again, I can give you all the data to say that it’s not as bad. So I’m boiling the oceans, it’s not doing these things. In fact, it’s reducing methane emissions right now. It’s, it’s, who was at the New York Times just came out with an article in The Guardian about how bad methane emissions are at x worse than co2. Bitcoin is reducing those methane emissions as we speak by flaring by capturing that flare gas. And that’s actually one of

John Corcoran 31:09

the one of the sides to the environmental argument that I wanted to ask about. I think that’s one of the fascinating sides is that is that a lot of this energy, which previously had been basically wasted, because there wasn’t a way to capture it? What has been happening is that miners have been moving to capture that energy and utilize it for something. So can we talk about that piece?

Dr. Mark Stephany 31:36

Yeah, absolutely. And so Bitcoin miners want the cheapest energy available. And that’s either wasted energy and electricity that’s not going to be used in this case, flared, nothing. It’s also wasted energy in our own grid. It’s, it’s also renewable energy is the cheapest out there not fossil fuels. And so that’s what Bitcoin six hours cheeps energy in that happens to be wasted. That happens to be renewables. And so in a term, it has the incentive to augment renewable energy build out. The minute the excuse me, the methane example is when nothing gets flared, excuse me, when when natural gas gets fired, it can get converted to methane in Bitcoin mining can be there to capture it, instead of methane, it gets converted to co2, obviously, a less harmful greenhouse gas emitted. And you can say that, but then people will say, Well, just build pipelines and rather than Bitcoin mining in, you think to myself, Okay, do it, do it, do it, then. But then you have to compare the environmental impact of building those pipelines, the cost of doing that, etc, to what Bitcoin is able to do right now, let alone the time that it’s going to take to do that, right. So this is a thing that can be implemented right now. As opposed to waiting years for pipelines or other infrastructure to be deployed. Another incredibly exciting usage of reducing a Bitcoin mining to reduce methane. Our our biomass is basically bio waste dumps, all of that gets broken down, and methane gets emitted. And so you’ll see, you know, stacks coming off of these trash heaps, and that’s methane going straight into the air. So now, the coin is allowing that to be again, captured and turned into co2 Rather than methane. In an otherwise situation that would not have changed otherwise, they’re just not the financial incentives, or the ability to do this. Otherwise at this time, and so again, another what Bitcoin did podcast where startups are doing this right here and now. So that’s the point is that why are we fighting? Capturing methane at this very juncture, and we’re talking about climate crisis. We’re talking about making changes right now. And Bitcoin mining is doing that

John Corcoran 34:37

today. And another fascinating argument I’ve heard is that, you know, the traditional energy system, it’s very difficult to move energy. long distances, electricity can only go something like 500 600 miles or something like that. And so as a result, you have to locate these power plants closer to populations of people, whereas with Bitcoin It is a technology that allows us to produce energy on one side of the globe and move it to the other side of the globe which never existed before. That’s one of those kind of mind blowing ideas.

Dr. Mark Stephany 35:10

Yeah. 100%. And, and again, you’re bringing up nuances of the grid that many people, including myself did not understand. Yeah, you can you just want to say, Okay, let’s do wind solar, in be done with it. It doesn’t it’s not that simple. Somebody’s described it, as renewable energy is our prisoners to both time and geography, meaning solar and wind. only work when there’s sun, and when there’s wind, and geography dependent, again, in those locations where it’s, it’s minimal. And that may not be where people are living. But these are still technologies that you want to build out what how are you gonna build them out if you’ve got these limitations and in the not only the location, but when they can produce energy. Bitcoin mining allows the ability to mitigate those problems, which is a more detailed conversation. And it’s probably this podcast, I can certainly give you resources for your listeners to turn to you to learn more about it, because it’s incredibly fascinating. It’s fascinating to learn about how our electricity system works.

John Corcoran 36:21

It is and but the hard part about it. I spent three years as a speechwriter for the governor of California and Gray Davis at the time, in the early 2000s, when we had the California energy crisis and rolling blackouts, and it was the top story at the time, huge news, people were talking about it. And I couldn’t get two minutes into a conversation with someone without putting them to sleep. Because it was just like the most wonky of wonky topics. And even though it was worldwide news at the time, it was just really difficult to get people to pay attention to these things. But perhaps because Bitcoin involves money as well, there’ll be more interest in and greater understanding

Dr. Mark Stephany 37:00

about it. Yeah, a couple of thoughts, one, we need to be paying attention. If these are issues that we truly care about, then we need to understand them. And we need to understand them better. And, again, I speak for myself in being acknowledging my ignorance of a lot of them. And I’m by no means an expert in in our grids and electricity systems. But I know more than I did. And I know more, to better understand that it’s way more complicated than I once thought. And I encourage your listeners in my listeners to, to just be curious. And in if, if the environment is in fact, an issue that you care about, you can carve out some time to turn to learn more about it, to give yourself that better depth of understanding of what in fact, is going on. But I think people will start caring when maybe there’s less rolling blackouts, when their energy when their cost of electricity is is cheaper, when they see more renewable energy coming online, then they’ll start caring. And they’ll be saying, Okay, how, you know, how did this happen? Bitcoin mining, okay.

John Corcoran 38:11

And I don’t know how much truth there is to this. But you remember, like a year and a half, two years ago, Texas had this unstable grid and had a bunch of rolling blackouts in the winter. And then I heard that the last winter, part of the reason they didn’t have as many problems was because of a lot of mining that had moved to Texas. I don’t know how true that is or not, but it was capturing a lot of that energy that was previously underutilized and and repurposing it.

Dr. Mark Stephany 38:43

Correct. And so what Bitcoin allows the grid to do is basically utilize the electricity that is not currently needed, but also shut off when it is. And that is what’s called a variable load. And bitcoin does that very, very well. Meaning again, it can use as much electricity as you want to give it but can also shut it off within minutes. And why is that advantageous? Well, we take for granted that we can flip our switch on and get power, you know, and not have to worry about rolling blackouts, for the most part we take for granted our systems. But if we’re going to switch to renewable energy, build out with the problems that renewable energies sources face, again, being these prisoners of time and geography and having intermittent power that they produce, then we have to somehow mitigate those downsides and that’s what Bitcoin mining does. In Our grid needs to maintain a certain amount of power evenly throughout the entire system. It can fluctuate to any great degree because that can, that can cause a great deal of problems and damage equipment. And so that’s where you see sometimes more electricity being available, because they have to have it at all times it can’t not meet demands, but then sometimes that demand is not there. And that’s where Bitcoin mining comes in, because it can take that electricity and put it to the mining operations. Or the people say, Well, what can we use that electricity for other? Things? Why can’t we use that electricity for doing other things? It’s not that simple. Again, there’s infrastructure that is not there, there is the cost of doing so in a lot of other nuanced details that I don’t have the expertise to to pontificate on, that make that challenging. You know, questions like that. Always be get why well, why hasn’t been done already, because clearly, that the problem has has been present now for ever. So that excess energy is not being put towards these other things that people said, why can’t we just do that? Or there’s a reason for that? It’s not doing it just because some people want extra extra energy there for Bitcoin mining?

John Corcoran 41:26

Yeah, Mark, this has been a pleasure. And I think you’ve done such a great job of articulating why you are compelled to create a podcast around this topic. Any final thoughts? Anything? We haven’t covered? Any other ideas that you want to leave us with?

Dr. Mark Stephany 41:42

Sure, I would, I would just say to your listeners, again, to be curious, Bitcoin is not going away. And we can try to make it more difficult for Bitcoin to exist in the United States. But that’s just going to push it elsewhere. To also, again, ask yourself the question, you’ll hear individuals that share the same belief systems and care about the same things that I do. And yet they have a different viewpoint on Bitcoin than I do. Why is that? Maybe there’s something more to this, that I haven’t considered. And, again, hopefully, I’ve opened that door for you a little bit to consider the millions of people not only with the United States, but worldwide who have found value in Bitcoin. But here in the you know, many, many countries that we aren’t even touched on that they have found value in Bitcoin. And so I know traditionally, we look towards government rules and regulations to provide change that we would desire of as progressive as liberals. We we are grassroots by nature. We we do things. In our communities, we raise awareness in our communities, we strive to do those things on a local level. And there’s nothing more progressive excuse me, grassroots than Bitcoin, in my opinion. And so I’d encourage us to think that if we truly care about the, the ends, the these values and these goals that we want, maybe we need to consider other means. And you know, while voting is necessary, it is not sufficient for change while protesting is necessary. It is not sufficient for change. Sometimes we need new systems and I believe that Bitcoin can be that new system.

John Corcoran 43:48

Mark, such a pleasure. Where can people go to learn more about you and learn more about the progressive Bitcoin or podcast?

Dr. Mark Stephany 43:54

Absolutely. At theprogressivebitcoiner.com Great, thanks so much. Thank you. 

Outro 44:02

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