The Fundamental Values of Bitcoin : Interview with John Vallis (All Interviews)

Interview Date : 23th March 2021

John Vallis (All Interviews)

My name is John Vallis, and I am from Newfoundland, Canada. I’m here now, but I’ve spent the last decade living and working in China, and have most recently been living in Thailand. I started my career in Shanghai, working in finance and wealth management, however, I did not enjoy the perverse incentives that pervaded the industry, so I switched and did a 3-year degree in Natural Medicine, and worked in that capacity for a couple of years at a private clinic, also in Shanghai.

When did you come across Bitcoin?

I came across Bitcoin pretty early, maybe around 2012, but I didn’t pay attention to it until 2014. After that, I did my first interview in 2015 with Bobby Lee. I was just having fun talking to interesting people at the time, so it wasn’t a ‘dedicated bitcoin podcast’ like I’m doing now. I would just record these conversations, and slowly but surely, I fell deeper down the rabbit hole.

In 2019, I was living in Thailand taking a break from work and I started the podcast, Bitcoin Rapid-Fire.

What form of ownership does Bitcoin permit?

Bitcoin permits the most radical form of ownership over the most important asset you have; your money which is an emblem of your time. That’s why money is so important to us. Bitcoin permits you to not only take possession of or have anyone intermediate your relationship with that asset, but they also can’t surreptitiously steal it from you as they currently do through money printing and inflation. 

That is a very powerful idea that you can be sovereign over your stored sacrifices. When people feel that degree of sovereignty over something so important, I think it has a dramatic transformative effect. Different people are influenced by it in different ways based on what their backgrounds are but feeling that degree of freedom, independence and responsibility is powerful and intoxicating.

What happens when you start to understand Bitcoin’s implications?

This does 2 things. One, when you realize the extent to which the monetary system has become corrupted and how Bitcoin fixes it, you start to distrust a lot of other things.  You will look a little bit more critically at all the other things in your life whether it be healthcare, education, government, etc., thinking, “if I misunderstood the truth of the monetary system so much, maybe I should look a little bit more critically at other areas.” So, you become intoxicated on sovereignty and you want to establish it in as many other areas of your life if you can. 

A very simplistic image of that process is how a lot of Bitcoiners dream of the citadels where they are energy independent, they have their food, and they’re as independent and sovereign as possible. I think people want that because they realize the value and the importance of freedom. So, once you start to go down the Bitcoin rabbit hole, you start to see just how much freedom has been withdrawn in the modern era. This is not just over the last 12 months with the virus, but certainly, that has made it all more obvious. 

Isn’t taking one’s own responsibility scary?

100%. The reason why we don’t take responsibility is that it is scary. This is one of the reasons why we’re in the trouble we are in. I can be as critical as I want about the monetary system, but the fact is, it is still up to each individual to relinquish the responsibility. Many say “I don’t want to take care of my health, the state medicine will take care of me if I get sick” or “I don’t want to manage my money, I’ll trust the bank with that.” Because we don’t want to take responsibility, we extend trust to so many different places in our lives, and our trust is almost always broken in various ways and degrees. Unfortunately, we tend not to notice how it’s broken because it’s obfuscated through many levels of structure.

That is why, when people come into Bitcoin, taking custody of your Bitcoin and managing yourself is a big step. However, it does speak to how much importance you place on sovereignty, and how much you value freedom. The people that currently value it the most and see the problems of not having freedom, they’re going to be the ones to take the responsibility first. They’ll pave the way for the people that come after them. They’ll make the mistakes and fix some of the problems, so that it’s easier for the next group, in hopes that it becomes less scary over time. But it’s never going to be not scary at all because freedom is a responsibility.

What if you don’t want to take responsibility?

If you’re not willing to take that, then you won’t have freedom. It also means that you don’t want it. Not taking responsibility means that you want someone else to be in control of your life. People won’t like hearing it that way, and a lot of people wouldn’t agree with that characterization but I don’t think you can dispute that.

As far as I can see from an analysis of the history of money, people today are far less informed about what money is, and the characteristics that it should have. The problem today is that a lot of people accept the status quo. They think because things are the way they are, they should be that way. And that’s a dangerous perspective to have. It assumes that nothing is to be fixed or upgraded. It also assumes the level of freedom and independence that you have, is what you should have.

People won’t admit they don’t care about freedom but they think that this is what freedom looks like. They just assume that they live in a free society, and as a result, anything that happens in that society is characteristic of a free society.  That’s the intoxicating influence of the status quo, and I disagree with that perspective entirely.

Can we challenge people’s perspective or their world view? 

It’s not very helpful to challenge people on their perspective and their world view. That is what people use to navigate the world, and have some sense of comfort in a crazy chaotic uncertain world. 

But that’s why I think Bitcoin is so interesting because it doesn’t immediately challenge the whole world view,  but just one element– the money. And when people start to understand the importance and the implications of money and how it’s been corrupted, it just seems to open up and bleed into many other areas of their lives. That change becomes almost automatic. So, as angry and frustrated as I get by some of the things going on in the world today, I try to focus on contributing to Bitcoin because that’s the best place where we’ll see the most positive and dramatic change.

How is Bitcoin a part of our evolution?

Everything is an evolution. Even our bodies and cultures are in the process of evolution. Money and economics can also be included in that basket. If you want to understand why things are the way they are, understanding how they got there and the different things that happened to get there it’s very important.  When I was a kid, some of the questions that kept popping into my mind were, “why are all the countries of the world the way they are?” “why is the US English speaking and the most powerful country” “why is China Chinese speaking and have their history?” These are the big questions of trying to understand how history unfolds. I think not having a perspective on history is a problem that most people suffer from today. It’s very difficult for you to see the reason why things are the way they are, and also very difficult for you to understand how things went wrong in the past. 

Are there parallels between the things happening today and the past

Even though human history is relatively short with around 6000 years of civilization, there’s a parallel for almost anything that happens today. There are parallels for various forms of governance, revolutions, money, different outcomes of wars, and certain political ideologies. . And we humans are not that different. The landscape and the environment change, and we have gone from living in stone villas to wooden houses, but we don’t act and behave much differently. Humans are meaning-making machines, and we interact with our environment on that basis more so than the objective facts.

It’s important to understand history so that you can try to avoid making some of the same mistakes made in the past, and you can cut them off before they become catastrophic. That’s one of my concerns today; we’re not paying enough attention to how this type of thinking and approach to governance has led to bad outcomes in the past.

Is there some progress made through evolution?

Even though we keep repeating the same behaviors as human beings, I still think there’s an element of progress. I’m an eternal optimist and I can’t help but hope that the arc of history does bend toward positive change. If that’s the case, then we have to be aware of what worked and what didn’t in the past, and take those lessons and apply them to the current problems and the solutions that we construct. The most obvious and beneficial example of that in the world today is Bitcoin. I don’t see anything more novel and impactful for facilitating human progress.

How do you feel about new technology like AI, robotics, etc?

All this new technology is super interesting, but there are things deeper than robotics, the internet, apps, etc., that you need to have an appreciation for so that things don’t go sour. There’s more to being a human being than new technology. 

There’s a lack of appreciation by most modern people today of the important questions regarding meaning that human beings have wrestled with for our entire history. Most people today just kind of think like “whatever,” whether it’s religion or philosophy and rather focus on advancing technology. But ultimately, all of those efforts have to be grounded in meaning and something that orients your values. I think people do themselves a disservice if they don’t cultivate that in themselves before they go forward and try to extract novelty from AI, for example.

Why did you quit the financial sector?

When I was a young kid, I was interested in many different subjects, but I also had a strong desire to be rich. I got into finance because I thought working with money was the easiest way to get there. However, I soon realized that the industry did not line up with most of my values or principles, and it also attracted the kind of people I didn’t enjoy being around. Also, I didn’t see much value in the work that I was doing, because you are just taking a percentage of other people’s hard work. Lastly, I had a lot of criticisms of the monetary system generally. So, it all was pretty soul-crushing.

When I came to understand what Bitcoin was, how it fixes a lot of problems in the monetary and economic system, and how connected the problems of the monetary system are to problems in the political, social, and individual domain, it was the exact opposite of all that. The more I came to understand that, the more I was compelled to be more involved. It was basically what I wanted from the start, but I just didn’t know it existed.

Fast forward to now, and I see the potential of this technology for positive change on a social, individual, economic, and monetary level, and I just can’t think of anything more meaningful to spend my time on.

How did you develop your sovereign and critical world-view?

I developed my worldview, perspective, and critical thinking because I’ve always been very curious. I was always reading and studying a lot when I was young and that’s what helped me form my opinion of the world. When Bitcoin came along and as I learned more about it, I started to realize that it could fix a lot of the problems that I was seeing in the world.

Certainly, there are some seminal works like The Bitcoin Standard, articles, and writers in the space that helped paint the picture, but as we all know the rabbit hole is incredibly deep and it just keeps going. So, I still feel like I have a universe of things to understand about Bitcoin. The more I go deep, the more it delivers and so the more my conviction increases that it can be such a force for good and fairness in the world. It ultimately comes down to Bitcoin’s attributes and features permitting a more fair system.

Why do we have suicide and depression epidemics expanding?

The suicide epidemic in working classes in many countries including Japan, and diseases of despair, substance abuse, frustration, anxiety, and stress, etc., all around the world are all rooted in the same thing.

I don’t think it’s wise to relieve the individual of the responsibility to find solutions to these things, but it’s clear to me that the structure of the system is a huge contributor to making people feel desperate. Among other things, it causes them to work harder for less over time, and that can be very defeating.  

This monetary-financial system is structured such that very few people gain the rewards of the efforts of most other people. It’s a soul-destroying feeling to think that your effort is not being rewarded in the way that it should, not in like a selfish “I deserve to be paid $1 million a year,” but simply “I’m working hard, I’m trying to focus, I’ve educated myself…, but why is that still not enough?” That stress of life gets piled on and a lot of people get consumed by it because it’s too much to handle.

What is the most interesting thing about Bitcoin?

What’s most interesting to me about Bitcoin is the transformative effect that it has on the individual. Bitcoin is just a new tool like the internet, the camera, whatever,  that permits us to behave in different ways. It permits new forms of behavior, and so what I’m interested in is what those forms of behavior are, and the impact and the potential those behaviors have on the individual.

What kind of people do you interview on Bitcoin Rapid-Fire?

I speak to people from famous writers and entrepreneurs to people on Twitter with 5 followers. I can tell you that once people come into this space and start to learn about it, they start to understand what it represents and their lives get turned around. That is not because they invested and have turned into millionaires, which certainly helps relieve some of the financial stress, but it changes people’s ideology, their world views, and perspectives. It also changes their approach to their health, families, and perhaps most importantly it changes our perspective on the future.

Why are a lot of people hopeless about their future?

A lot of people today are hopeless because they look out on the world, aware of it or not, they don’t see a clear vision of a better future. However, when you start to understand what Bitcoin represents and the implications it has for a fairer monetary and economic system, people will start to have a lot more hope for the future. And, it’s the hope for the future that brings alive your present.

If you’re not hopeful for the future, everything in your present world is meaningless. If you’re not trying to pull yourself to a hopeful future, none of the information that’s contained within your environment is of any value to you because you’re not striving for anything. But if you look out in the future and you see something hopeful, and you’re enthusiastic about bringing yourself to that future in the best possible way, then everything in your environment comes to life. Everything is a potential aid in helping you get to that future faster or in a better way. 

Should a portfolio be diverse or not?

I’m of two minds about this, and I think this is where everyone’s situation comes into consideration, like ages, and what are your unique circumstances, lifestyle, etc. I think bitcoin is the most asymmetric opportunity anyone alive today, and perhaps ever, has ever seen. Paradoxically, I also see it as the most conservative investment one can make today. In my mind, that warrants a majority allocation. Of course, it may be prudent to hedge your bets in some way, but that’s beyond my area of opinion really.

Many often use gold as the ‘safe hedge’, and I think this is potentially quite dangerous and counterproductive. As far as monetary competition is concerned, I think gold will largely be demonetized over the next decade, which is a crazy thing to say because we’ve used that as a store of value for over 5000 years. 

But we have to remember that we used horses as transportation for over 10000 years. In the early 1900s, cars, and horses coexisted for a time. The people on the horses were saying “cars are dirty” “they’re loud and clunky” and “they don’t do well in the mud” or “you need roads for them.” Nevertheless, the car was a technology that could be upgraded and improved but the horse wasn’t. So over time, the car improved; it got less clunky, got better in the mud, it got less stinky. Then the infrastructure to make it even more efficient, like roads and such, was further developed. So, it was a constantly upgrading technology that overcame the previous solution to the problem of transportation. 

I think the same thing is going to happen with gold and Bitcoin, and over the next 10 years, gold will lose a lot of its monetary premium to Bitcoin. Then gold will be what it should be; a useful industrial metal. It has lots of industrial uses and the costs will come down to use it in that way. Therefore, it’ll start to be used in more industrial applications.

How will people in cultures where Gold is used as jewelry and status react to this shift?

Part of the reason why gold is jewelry is that it’s valuable. When it becomes less valuable, people won’t want to adorn themselves with it as much, because it doesn’t communicate the same thing by wearing a lot of it. 

Now, it’s a very opportune time to make the switch because gold hasn’t demonetized yet. It hasn’t had a great year in light of everything that’s happened, but it’s near its all-time highs. So, now is the perfect time to sell it all in and convert it to Bitcoin. If you don’t, it’s going to be a difficult circumstance, similar to the way silver fared in China over 100 years ago when China was on a silver standard. So, as much as you may like the shininess and as difficult as it may be, the prudent move in light of the environment we’re currently in is to sell precious metals for bitcoin.

What kind of upgrades are there to Bitcoin?

There are upgrades all the time to Bitcoin, but there are two elements to this; the things that you upgrade because it makes everything more useful and efficient, and the things that make Bitcoin what it is that you don’t ever touch. Many people fail to understand that Bitcoin and all cryptocurrencies are special because of how they fundamentally are.  Once you change it you lose what’s special about it. One of the things that are special about Bitcoin is its aspect of immutability, and if you agree that you can change some of the core and most important aspects of it, then you open the door to change anything in any cryptocurrency forever and lose its magic.

Part of the magic is that certain things shouldn’t be changed. In Bitcoin’s case, 21 million hard cap supply is something that should never be changed. I don’t think it ever will be because the owners, people who run nodes, etc., will never have an economic incentive to do so.

Still, there are occasionally conversations like, “in the future, there should be inflation because the fees may not cover the security costs,” etc. Those conversations completely misunderstand why Bitcoin is special.  

There are certain aspects we can change which don’t change the fundamental value proposition, but other things shouldn’t change even if you think it would make it better. If we can agree that we’re not going to change those fundamental value propositions, then we’ve got something really special that can serve as a foundation for a newer and fairer economic system.

What happens if the fundamental values of Bitcoin would change?

If we allow those to change, we have to figure out who changes them, who has the power, and what’s to stop us from changing it depending on the political or philosophical winds that are blowing at any given time. No, Bitcoin’s fundamental propositions are meant to be an absolute constant which is something we’ve never had in the field of economics. We’ve never had an absolute constant for measuring value, but now we have one, and we should not fail to understand or recognize the importance of that.

In the world today, disagreements so often lead to physical disagreements and violence because there’s no constant. I often think of Bitcoin as kind of a proposition that says “if you can agree on X and not change it, then I’ll let you disagree on everything else.” And, that’s important, because we need to disagree to come to the best decisions.

Also, no one is in control of any one lever. Nobody has the power to unilaterally change something, and for that reason, I think it’s very important not to change some of the fundamental aspects.

What is the truth about the bond and stock market?

Almost any other market than the Bitcoin market is highly manipulated. Maybe the stock market is less so, but the bond market is a farce. The bond market is supposed to reflect two things; the capital stock, so the aggregate of all savings that are available for lending or investment, and the time preferences and the risk preferences of all the participants in the market. Those two things come together to create a cost of capital – how much does it cost over what period of time to lend a certain amount of money. That is supposed to be an emergent truth that comes from all the participants in the market making those individual decisions. But it couldn’t be further from that. Instead, it’s just the government saying “we want more consumption, so let’s lower interest rates.” The central bank will help them by making sure to buy up all the bonds so the interest rates stay low. 

When will the major economies default?

The reason why they haven’t defaulted, and why I don’t think most of the major economies will, is because the citizens of the country are forced to use the government-issued currency. This means the government has access to the entire productive capacity of the entire population in perpetuity. So, when the central bank buys government bonds, they’re creating money out of thin air to buy these bonds. That money out of thin air comes from diluting all the money that’s already in existence – that’s the savings and the capital of the population. Instead of asking “when will all this break?” it’s better to understand how much it’s been breaking already. How far it goes depends on how much people will put up with.

I suspect that major governments are not going to explicitly default. That would be too damning and condemning for their mismanagement of everything, so what they’ll continue to try to kick the can down the road, continue to use the money-printer effectively to steal the wealth of their population to try to cover over the mistakes, mismanagement, corruption, and abuses that they’ve done.

Is there an opposition against that?

A lot of people are saying  “No, I’m opting out of that” because those savings were their sacrifices; they went to work every day, they stayed up late working on that project, they went to school for 4 years, etc., to have those savings. People don’t want the government to slide their savings right out of their bank accounts without them being able to do anything just because the government failed. That’s why people are opting for Bitcoin.

This will continue happening, and so the government will be less able to steal from people over time. Unfortunately, the people that don’t take responsibility for protecting themselves will get hurt the most. I suspect they won’t understand why they’re being hurt either. Certainly, the governments won’t be honest and forthcoming about why they’re being hurt, and those people will be the ones that ask for even more government intervention.

This is the downward spiral that we’ve been in for a long time; the worst things get for the citizens, asking for more government intervention is most of the time their only solution. But the government can only continue to do what they’ve been doing, and that continues to make the problem worse and worse.

Will people leaning to governments for support be against Bitcoin?

I’m not naive to think it’s not possible that a certain cohort of the population, in conjunction with the government and mainstream narrative, could turn against people who are using Bitcoin to preserve their wealth. That’s an entirely plausible and perhaps even probable outcome. But I agree that how the bond market and central banks work, and how governments have been abusing their power of money is complete insanity. The asymmetry of power and ability of governments and central banks to create money has found us in a world where there’s such a huge difference between the power of the apparatus, this machine of government, and the population.

The citizenry is powerless against a government with massive military, nuclear weapons, huge police forces, etc. So, the only thing we can do is to stop the theft. All we can do is say, “you’re not getting my money anymore, and you’re not taking it from me without my consent.” If enough people do that, then you choke off the monster of its lifeblood. That’s when we start to see change. Now, unfortunately, some of that change will probably be messy because a lot of the systems and structures that were erected for us depend on the way things work now for their survival.

After the corona pandemic, do you want things to go back to normal?

I certainly don’t want to. Human beings are creatures of comfort. So, when things emerge that disrupt our comfort and plans, or disrupt the things that we’re used to, we just want to go back. But historically, things never go back to the way they were. Even though there’s a cyclical nature to things, there’s also a chronological progression of things.

For example, people may have yearned for a renaissance in the 1700~1800s but what happened next was the industrial revolution. So, you have to look forward, and the best way to look forward is trying to do so with as much clarity as possible through educating and informing yourself. Nobody knows how to move forward in chaos, and nobody can anticipate the future. It’s entirely uncertain, especially now with so many world-changing technologies emerging and converging at the same time. In terms of deciding how to move forward, “meaning, truth, and values” have to be your compass and your guide. And, you have to try and understand what these are for you. 

What are some of your objectives in life?

One of my primary objectives is to see with the utmost clarity. That’s no easy task because human beings are so subjective. We have our biases and prejudices, and our perspectives and conditioning, etc., meaning that it’s really difficult to see something with clarity. If you look at how far our social, economic, political, monetary, medical, educational institutions, etc. have fallen and what the true appraisal of those things should be, I find it terrifying. So, I try to channel that terror into the solution, which is Bitcoin for me.  I feel that most people don’t at all see what’s happening with clear eyes. They’ve been misled, conditioned, diluted, and misdirected through various means.  The worst part is not that people aren’t seeing with clarity, but they don’t even seem to want to.

If you had an objective that was important to you to see with clarity, there are ways of doing it. There’s a lot of easy ways to educate yourself today; especially with the internet. If you want to educate yourself and take that responsibility, you can do that very easily and for no money. All it takes is time. But the fact that so few people want to see with clarity, and are just willing to accept on faith whatever is said to them by whoever, that’s the most disheartening aspect of all. 

What upgrades of Bitcoin are you looking forward to?

Taproot seems to be coming to Bitcoin that will allow for better functionality and some innovation on Bitcoin. We also have the Lightning Network, which is super exciting. It is starting to seem like the Lightning Network might be internet 3.0. It’s all predicated on the base layer being Bitcoin and maintaining its primary characteristics.

Message for Japan:

Think for yourself, and don’t trust but verify for yourself, and come to your conclusions. That is the only way you can have faith in yourself. Take in all the information you can, and put it through your filter, so that the actions you take, you can have a conviction that they are actually yours. You’re not an avatar for somebody else’s ideology, but you’re a unique thinking individual who’s making their own decisions and exercising what is ultimately a divine process of being in the world.

Interviewer , Editor : Lina Kamada


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