🎙 108 - I Was Wrong, We Need Crypto | DHH

you have your bank account canceled like how are you going to pay rent how are you going to buy groceries how are you going to do anything in modern society without access to your bank account right and this was one of those moments like they're willing to do that for this welcome to bankless where we explore the frontier of internet money and internet finance this is how to get started how to get better and how to front run the opportunity this is ryan sean adams i'm here with david hoffman and we're here to help you become more bankless guys

the title of this episode is i was wrong we need crypto from david hannemeyer hanson dhh a crypto skeptic who's turned into a crypto advocate and this conversation will show you exactly why a few things to look out for some takeaways number one we get in the mind of a crypto skeptic how do they see crypto on the outside number two why most people won't actually be convinced until they have a catalyst for dhh that was the freezing

of bank accounts in canada it's another thing i took away from this episode number three why crypto is the most important release valve for preserving civil liberties that we have right now david this was a really cool conversation with somebody who's been on the periphery of crypto and been super skeptical for the entire time but due to recent world events has just become crypto pilled and so uh it was a really fascinating discussion we don't get to have these very often on bank lists i'm grateful for it what were some of your thoughts

i think the value of this episode is uh being able to view the crypto industry from a bird's eye view um dhh he's got a lot of just alignment with who he is and what his disposition is as a person with people that you would find inside the crypto industry uh he's a big picture thinker he's a futurist uh you know he's a coder uh and he's also a first principles thinker that is able to connect things like code to philosophy which are all the ingredients that kind of make up um somebody that

generally becomes like crypto woke or crypto pilled and so the fact that he wasn't prior to this was interesting to me and hearing why he wasn't i think is a useful lesson for everyone in the industry because it paints a picture as to like what do we look like from the outside and i i've seen this happen many many times before it's like when big big name celebrities people with like over 100 000 followers on twitter that are anti-crypto and they are publicly anti-crypto on twitter uh their

first interaction is with like the laser eyed huddle army like they they get to them first and then when they flip their minds it's also the laser-eyed huddle army that like starts to like give them praise and it's just that a lot of the people's first impressions of crypto come from like the crypto twitter armies whether they're like the the frog armies or the the bitcoin max maximus laser armies that's people's first impression about crypto and it's not often the best like best first impression doesn't often leave a good taste in people's mouths

and so like that's kind of what we are up against because in my opinion the more pragmatic people that promote this industry don't break through the noise of just like the moon boys the chil the schillers the pump and dumpers because those people are super loud and super first and so learning from dhh that it takes a moment like the the freezing of canadian bank accounts to break through the noise that people see in this industry it's it's an important lesson to learn and i hope as an industry we're able to reflect on like hey how do we route

around all of the negative uh loud noisy parts about crypto and get straight to the hearts of people without them having to be exposed by some of the crazy shenanigans that we see in this yeah absolutely it's a very fascinating story and dhh very eloquently kind of takes us through his process from going from from skeptic to advocate and he's very early in his bankless journey so far so we sort of end with uh some next steps that i think he's going to take to dive deeper down the rabbit hole and i hope you are diving deeper down the rabbit hole as well listening

to bankless a fantastic way to do that as well is to stay tuned for these awesome tools from the bankless sponsors that make a bankless life possible we'll do that and then we'll get right to the conversation hey bankless nation just a quick disclaimer before we get into the podcast with dhh uh he holds nothing back so there are a few f-bombs and other naughty words of that nature so if you are listening with kids you might want to save this one for later i hope you guys enjoy the podcast the brave browser is the user first browser for the web3 internet with over

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rails which is an open source application framework he's an entrepreneur as well talks a lot about building high margin businesses with no vc funding he's a writer as well i've read a couple of his books a bunch of them on digital work culture and lastly and this is the topic we're going to discuss today he's a former crypto skeptic who recently changed his mind on crypto on bitcoin and that's what we're going to be talking about a lot today his thought process and why he changed his mind dhh welcome to bank list it's

great to have you thank you so much for having me on well we're gonna uh divide this show into two parts and i think the first part is really to try to get into the mindset of a crypto skeptic because uh everyone is in a bubble these days including the bankless audience honestly we are we are crypto natives we are hyped on the the crypto kool-aid we've fallen deep down the rabbit hole as you might say and we want to hear what it's like being a crypto skeptic kind of us a few years ago so talking through that and the second part is talking about why you changed your mind

like what was the catalyst for that and what you think about crypto moving forward but first i think dhh uh some in crypto might not be familiar with with who you are uh so let's start there who is dhh can you tell us a bit about yourself and what you do sure well i am originally from denmark and now i'm actually back in denmark but i spent 15 years in the us building a business called basecamp it's a project management and team collaboration tool that we started before sas was even called sas back in 2003 we

started working on it back then when you actually had to talk to a real bank to get a merchant account to be able to accept credit cards there was no stripe there was no easy path to get on with this so we very much were not bankless back in 2003 and had to deal with that whole legacy infrastructure madness um and then i spent together with jason fried my business partner the next 15 years building a series of different businesses some of them we started some of them we

wounded back down basecamp was the red threat through the whole time and then two years ago we launched a new email service called hey.com where we finally mustered the ambition to take on the gmails and the outlooks of the world after spending many years kind of shying away from a challenge of that proportion um went really well we thought we were going to go up against google with gmail and we ended up having our existential battle with apple over the app store monopolies and the

gatekeeper roll which i'd probably say is one of those seeds that made me more interested in the crypto story um having to deal with gatekeepers who can block you out of marketplaces definitely radicalized me in certain ways but over those 15 years we also spend a lot of time thinking about how to build a business i was an employee before i was an employer and it left some deep scars on my psychic about how not to run a business and i wanted to do things very

differently when we had our shot and jason or i documented those decisions that we took from first principle which is one of the other things i've been liking about crypto and bitcoin in particular rethinking some of the fundamentals of society and monetary policy and um methods of exchange from first principles anyway we spent the time thinking about some of those things from first principles putting them in action actually doing something which is another thing again on the bitcoin side i like a lot of people talking like well

we should have different ways of organizing society which is just sort of philosophy which has its place but there's also practice and actually trying to change things i have a tremendous amount of respect for that and that's what we try to do we try to put our ideas our conclusions from analyzing things from first principles into action and then after we tried it a bunch of it didn't work and the parts that did work we wanted to tell other people about it so we wrote a bunch of books starting all the way back in 2006 with a book

called getting real about how to start essentially a sas business um on the cheap without venture capital and all those things that led to a book in 2010 called rework which is our big best seller sold half a million copies around the world and that really was the greatest hits of 10 years of thinking 10 years of experimentation and 10 years of doing then we wrote a book called remote office not required in 2013 and at that moment i thought as perhaps um

people in the crypto space they're like once i've gotten the wisdom and the gospel of course everyone is going to come over of course remote is going to be one of the dominant ways of working and it turned out that it didn't until about spring 2020 all of a sudden people were interested in what we had to say about that book we had a spike in sales that we hadn't seen for many years um so that was kind of interesting is a lot of this is timing and sometimes you can be so far ahead of the curve that you might lose

faith a little bit that like the curve is ever gonna grow mainstream but then boom something happens and it does um which i'm sure we'll get into about this whole canadian business and and bitcoin that that was that sort of moment for me as other people had remote once the pandemic hit um and then finally we wrote a book called uh it doesn't have to be crazy at work which is one of the other things i'm really passionate about is um beating down the hustle mania this idea that we all have to work uh 80 hours or 100 hours a week

otherwise we're not real true entrepreneurs um total [ __ ] i've spent 20 years working in technology on a 40-hour work week taking fridays off in the summer enjoying vacation enjoying hobbies racing cars having a family having other things go on outside my life instead of just this one thing um i actually just wrote about this this morning diversifying your life not having a single pillar that tries to hold up everything i think is a good idea and then of course during that whole time i am also a programmer and

i've been a tireless evangelist of the ruby programming language ever since i adopted it back in 2003 and ruby on rails is the tool kit that i made for others to build web applications back then and i'm still super duper pumped and passionate about it um i know that several of the uh major players in the crypto space use that uh coinbase is started and run on ruby on rails and and many others so that's been a delight to see um and i think that's a good quick

tour well that's yeah that's a very very robust resume uh david and actually i think there's a lot of uh alignment with how you lead your life your uh your a technologist uh also a futurist and you i think focus on um just the cultural relationship between technology and future society uh but also i think are interested in big big picture thinking like philosophy and first principle thinking and i think there's a lot of alignment there between a lot of the the crypto industry the

crypto people where uh a lot of us are coders a lot of us are heads down builders but they also zoom out and share their like philosophy about like how the world works and and how how first principles thinking might um uh suggest changes to how society works and so uh i think as we go through this conversation there's a lot of uh uh and there's i think there's a lot of people like you out there um and it's just a matter of crypto finding its way into uh the minds of people like you and finding the right angle to convince you

that like uh crypto has tools to enable all of those values uh is that kind of uh what you've seen out of crypto in the last year or so i think that's very fair and i think that part of why i had a particular slant on crypto in a particular take on crypto for many years and quite forcefully so was because i saw echoes and shadows of other things i really despised about the existing ecosystem of entrepreneurship i was forged in the dot-com boom and bust and i saw the charlatans i saw the scams

i saw all that [ __ ] that went on and even though i'm i'm now far more sympathetic to some of the fundamental theses around crypto i still also see so much of that um but perfect in in some bizarre way that is comforting that the whole technology world could go through a dot-com boom and bust that was so jam-packed full of scam and [ __ ] and fraud outright and still survive get out on the other side and turn into this that we have today

where in some bizarre way we're actually happy that the dot-com boom and bust happened because it allowed some totally ridiculous investments in fiber uh cables across the the continents and so forth that were fueled by some of that fraud and some of that uh um whatever setup so sometimes you have to go through an awkward phase i think with any new thing um and when it comes to crypto i've been perhaps overly focused on those aspects

of it and not seeing as much of the big picture because it smelled too much like all the nasty stuff from the late uh 90s early 2000s actually uh dhh let's camp on some of the nasty stuff a little bit longer um because you wrote this fantastic blog post about this and and by the way i've been a follower of your your writing for quite a while the signal versus noise uh days uh and uh your original manifesto and really appreciated your clarity of thought uh

in many of these things and this this blog post was was no different a very clear concise writing um but you titled it i was wrong we need crypto and you started talking about all of the things that you saw that you didn't like in crypto you said there's so much to oppose uh and i was interested to learn that you've actually been skeptical about crypto you must have heard about it in the early days since the early 2010s you said in your blog post but then you list a number of things that

that you were skeptical and i want to go through these because i think a lot of people listening or a lot of people who need to to break outside of their current crypto bubble need to hear the criticism they need to hear the skeptic skepticism you talked about the huddle army you talked about laser eyes that that kind of feels like a flavor of culture that you didn't identify with you talked about the proof of work energy consumption is this bad for the environment that doesn't necessarily hold with your your value system uh the ridiculous fees and i imagine that kind

of uh traps out those who aren't wealthy from the system that's probably a criticism the [ __ ] coins which are everywhere permeating the scams the volatility the tether as an example so definitely some some sketchy things going on the lack of real decentralization and on and on and on you say can we talk about some of those and parse them apart i'm wondering about maybe the the first section uh the huddle army and the laser eyes sounds like you've had some up close encounters with them on social media before what is

that culture from from the critics perspective how does that culture uh feel to you and how did it ring previously yeah it rang like i was faced with a cult because it would be a set of of theses of talking points that were just repeated ad nauseum over and over again by people who dressed a certain way and looked a certain way and usually with the laser eyes right um from a motive i i had a hard time to find

genuine that it was felt like a bunch of people talking their own book hey i bought some coins five minutes ago i'd like them to go up please so shut the hell up if you have any criticism that might make them go down um and then i thought a bunch of the arguments were almost tenets of faith that it had some of these religious widths to it that it wasn't necessarily so much about practical um applicability today which ties into some of these other things like for example the the throughput and the

transaction fees like how realistic is this as a as a currency how well can it be used as a replacement of the dollar today um and i very often found the arguments for that lacking which is is perhaps part of this um notion where you come into like what timeline are we looking at are we analyzing what crypto and bitcoin is right now in this moment which is sort of what i was doing and i was getting some answers that i had a hard time squaring with reality a bunch of people saying no no you can actually buy a hamburger in venezuela or wherever it is

um i was like that's not an argument in my book or i wasn't accepting that as like okay that means that this is a credible alternative to fiat currencies right now where i missed um and where i was wrong was a little bit on that time horizon yeah a lot of things aren't ready for for sort of the long haul that doesn't mean it couldn't be in five years or in two or ten um some things does take a long time like you look at uh virtual reality for

example i remember watching the lawnmower man in 95 thinking holy [ __ ] we're all gonna live in the metaverse in about two years from now and what happened nothing that's what happened for about 20 years right so that was so far ahead of the curve and now my kids have this uh oculus thing they can jump on and like oh yeah that's actually the lawnmower man it's just like 20 years late or look at self-driving cars elon was telling us no no 2017 you might as well sell your car because all the cars are going to drive themselves and he's going to have this robot army and obviously he's like

yeah that didn't happen did it and then now you get like oh yeah actually it was a slightly more difficult problem than we first anticipated then maybe now the correct time frame for the self-driving army of taxis is uh 2075. so sometimes it's really hard to gauge when that glimpse of the future is actually going to happen um you have these uh whatever jules warren's video phones predicted in 1872 right and it took a while until we

got facetime but now we did and i will say that um i like the optimism of that and this is where in retrospect i'm a little disappointed in my myself because sort of the pessimism of today is has utility but a diminishing utility and i it needs to be counterweight by the optimism of tomorrow it needs to be counterweighted by some people seeing that there's a future that may not happen in two years even if they predicted it but like i'd probably be on

t milan about the self-driving cars if the time frame was 2050 which in the grand scheme of thing is not that long human history is is is quite long and what we've accomplished in a few short years in our in my lifetime is incredible right so um this was one of the things where you fall into this trap of analyzing everything about today does it work today is it good today and you're like yeah you know what i find it coming up short which actually to be perfectly honest i still do i've just changed my

my bias and my bias is for the future not just today and the bias has been infused by some of these things that have happened around the world where don't just like oh that could be neat if it happens where i'm like i really want this to happen which is also a bit of a shift i mean all the things i mentioned that i oppose i still oppose those things like the fundamental analysis of crypto and bitcoin's problems have not changed for me i have simply decided that i've seen that the costs in terms of [ __ ] and

energy and all this other crap are worth it right so that's a the changing to different from cost to looking at value and you go like holy [ __ ] the value is substantially higher than what i thought this is the same thing i have about stock analysis right you can look at the best company in the world and you can go that is the shittiest investment in the world because it's way way way overpriced the best company in the world can be the worst investment in the world at the wrong price and a fairly shitty company

could be a phenomenal investment at the right price right and i was simply mispricing crypto and bitcoin's value in terms of what i want in the world and what i thought was possible like we crossed some rubicons here with with the canada situation that just fundamentally changed my perception of western society there's a you started off this conversation talking about like the the the bitcoin twitter army the huddle army the laser eyes army and calling them

like a cult and i mean i i see it too there there's there's just many of them they all have very similar profile pictures they all have the red laser eyes they all come chanting the same the same lines and so like inside of the the crypto industry we kind of get that perception as well but also i'd also make the claim that well the crypto industry as a whole is a little bit cult-like definitely less cult-like than the concentrated amount of like hodol army laser eyes maximalists but as if you zoom out to the whole entire industry we all kind of exhibit similar

behaviors uh we'll all kind of chant the same things as like the uh the sacred values of open source software for example is something that almost everyone in crypto values uh and so like even though we're less cult-like i think when you zoom out and view the crypto industry as a whole like we're still it's we still kind of get that cult-like branding and i think a lot of it comes from a little bit of what you said where first principles thinking is so important in crypto because that's kind of all we have at the very beginning of

this industry we only have an imagination we only have something to extrapolate upon it's like yeah bitcoin 21 million hard cap proof of work these are very simple components but according to the bitcoiners out there in 100 years and 200 years these two ingredients create like a utopia of fairly valued assets and and free money uh and i think as crypto has developed uh it's become easier and easier to imagine a a better future because we

actually have made real innovations uh but we're only like 12 years into this into this whole crypto industry and really in my mind most of the crypto industry has only really been developed in the last four years or so the crypto industry that people know it today so it's still a large amount it's still a big ask for the rest of societies like hey use your imagination uh when which is a hard ask when there's like scams pump and dumps like how how the audacity to ask people to use their imagination to look around these things uh

how does that reflection land on you it squares very well and this is also one of those ways where i've sort of grown milder on the cult aspect of it because i actually think they're necessary when you're trying to bootstrap a vision that broad that large that different you need delusional people because only delusional people will push against reality in the face of all odds in the face of all feedback in the face of all sanctions you need delusional

people to change the world now the thing is just because you're delusional doesn't mean you'll change the world but most people who ended up changing the world were delusional they had outrageous ideas and imagination and i think this is one of the things with with musk and sometimes these things connect where i i had a sort of bemused slash fairly critical perception of musk as a character and he's obviously a huge character in crypto particularly for people who are not in crypto right like he's the

foremost spokesperson on off um for this and and you sometimes go like well is this a referendum on whether i like musk and people like him because if it is and i don't like musk for whatever reason then i also don't like crypto like that's pretty lazy thinking that is not first principles thinking it is very motivated reasoning and i got sucked into perhaps a slight little bit of that which is also perhaps how some of these things soften right you go like well i didn't think musk was going to sell a

million teslas i thought there's no [ __ ] way and [ __ ] he sells a million teslas he bootstraps this thing or not just bootstraps it he rockets it pun intended into space to the moon in much shorter time perhaps not the timeline he originally proposed but much shorter time than anyone else would have thought and go like do you know what um yeah i was wrong on that i didn't think he'd do it um just good time to revisit what other things might be wrong about what other delusional camps because if there's one thing musk is it is absolutely

delusional he's probably one of the most delusional people on earth again doesn't mean he can't make his delusions come true and there's inspiring aspects of that it's hugely inspiring and i'd rather see delusional people try and then fail than everyone just going around in this hyper realism of like nothing is ever possible anywhere anytime everything has to be the way we've done it for the past whatever 30 or 100 or 200 years and that's just it this is the end of history that is just a deeply pessimistic view of human ingenuity and i want to be on

team human ingenuity i want to be on team like we try new [ __ ] and it won't all work um now all of that has limits and it doesn't mean there are negative externalities and that doesn't mean that there aren't reason to criticize things and so forth but i want to be able to hold those two things in my head at the same time i can be skeptical about all these things i list to propose while still being like go on let's see where this uh where this goes because i uh particularly now or after

this business in canada have just come like i i would very much like this to be true i'm not 100 sure i'm convinced it's going to be but i am convinced now that it is very very worth trying and we're going to get to the business in canada and why you changed your mind but uh there's one more thing i want to camp on before we get there because um you just said it a couple types of this podcast and the title of the article uh has has this in the title as well i was wrong

you know i feel like no one ever says that dhh no one ever says that anymore like it's a ver it's very rare to hear people say flat out i was wrong and i changed my mind and here's why is this something you've just started recently doing or like tell tell us how to be wrong about things because i feel like people today um like myself included it's very difficult to admit that we're wrong about things

uh what have you learned about even just saying those three words clearly that they have a magic power because i think half of the virality of this post was in those three words i was wrong like the tweet ended up being tweeted like or seen five million times and the post was read a lot and i exactly because this moment of all the moments that i recall is such ideologically divided we're all in our