In recent years, the Human Rights Foundation and Alex Gladstein, its chief strategy officer, have become forces in the Bitcoin and cryptocurrency community. In this episode, he discusses why Bitcoin is important for human rights, its three most important characteristics, and why Facebook’s Libra project should be helpful to the adoption of the technology, at least in the short-term. He also describes how Bitcoin is just part of other movements that have become more open, such as governments shifting toward democracies and information becoming freer via the internet. He talks about how he thinks the technology can get wider adoption, why HRF supports the Open Money Initiative, and whether or not Bitcoin can help the North Korean people, rather than enriching its government, which has been the case so far.
Read the full show notes on Forbes: http://www.forbes.com/
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Episode links:
The Human Rights Foundation: https://hrf.org/
Alex Gladstein: https://twitter.
Last year’s Unconfirmed episode with Alex: https://unchainedpodcast.com/
This year’s panel discussion on finances and freedom from the Oslo Freedom Forum: https://
Alex’s essay for Time on why Bitcoin matters for freedom: https://time.com/
Alex’s response to Bitcoin critics: https://medium.com/@
The Open Money Initiative: https://www.
How Bitcoin could help improve foreign aid: https://edition.cnn.com/
Unchained episode with Bill Tai:
https://unchainedpodcast.com/Eric Wall’s posts on Bitcoin privacy and wallets: https://medium.com/
What Bitcoin Did episode with Mahsa Alimardani: https://www.
Thae Yong Ho, the highest-ranking North Korean defector, at the Oslo Freedom Forum 2019: https://youtu.be/
Unchained episode with Jimmy Song: https://
Transcript
Laura Shin:
Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I’m your host, Laura Shin. You may have heard, Unchained is doing a survey. We want to know, how do you think we can make the show better? How would you like to see Unchained expand? If you could just take a moment and go to https://www.surveymonkey.com/r/unchainedsurvey2019, your answers will be a huge help to me and my team here at Unchained.
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Laura Shin:
My guest today is Alex Gladstein, chief strategy officer of the Human Rights Foundation, and a lecturer at Singularity University. Welcome, Alex.
Alex Gladstein:
Thanks for having me, Laura.
Laura Shin:
In a short time, you and the Human Rights Foundation have become visible forces and advocates for Bitcoin and decentralized technologies, but before we get to your work in the blockchain space, let’s start with some background. What does the Human Rights Foundation do?
Alex Gladstein:
The Human Rights Foundation promotes civil and political liberties, like free speech, freedom of and from religion, freedom of assembly, the right to participate in your government, and we promote these rights and we protect these rights in what we call closed societies or authoritarian countries, countries that are ruled by some sort of repressive government, whether it’s a dictatorship or a king or a tyrant or a military junta.
Laura Shin:
And something that surprised me when I was researching this was that it was just founded in 2005?
Alex Gladstein:
Incorporated in 2005, and we started operations in 2006, correct.
Laura Shin:
And what have been the biggest campaigns so far?
Alex Gladstein:
Well, in many ways, Thor Halvorssen, our founder, started the Human Rights Foundation as a reaction to what wasn’t happening with regarding to the world’s worst human rights violations. So, there were a lot of countries, and still are, unfortunately, ranging from North Korea to Eritrea to Uzbekistan, where they don’t get a huge amount of media attention in certain aspects, and there’s just not a lot of funding or support available to help people inside.
And the Human Rights Foundation is, in many ways, kind of, like, acting as a voice for the voiceless, and as a support network for people who live under these extremely repressive environments, and it’s a lot more people than you might think. Roughly four billion people, billion with a B, live under an authoritarian government today, and those are people that can’t do some things that you might take for granted. For example, they can’t write an op-ed in the newspaper. They can’t sue their government. They have no real way to hold their government accountable.
They can’t start a nonprofit, like an Amnesty International, or like a Greenpeace. They can’t really do effective environmental work. They can’t do good, effective whistle-blowing work. They can’t even really do good work when it comes to, you know, areas of labor rights, or even religion. So, there’s a vast percentage, about 52 percent of humanity, whose rights and freedoms are really restricted in this way, and HRF was founded because it’s not just for moral reasons that we want to make sure that everybody has human rights.
It’s not just because it’s the right thing. It also affects everything about humanity. So, just to give your listeners some data, something like 96 percent of all refugees come from authoritarian countries. Something like 18 of the top 20 poorest countries, the ones that are in the most abject poverty, 18 of those 20 countries are dictatorships. Twenty-three of the top 25 countries with the worst access to drinking water are dictatorships, and if you look at things like patent rates, literacy rates, violence, death homicides, all of these things are not just correlated, but causally linked with bad governance.
So, we believe that no matter what you care about, whether it’s peace, or gender equality, or religious tolerance, or scientific innovation, or having a good welfare state, no matter what you care about, you know, in your life and what you care about for humans, democracy and human rights matter.
Laura Shin:
So, since my podcast isn’t really a political podcast, and if my listeners are anything like me, their news intake is pretty high in crypto, but somewhat low on everything else, I just want to quickly and briefly define some terms that I imagine you’ll probably use fairly frequently throughout this episode. So, first, just what are human rights?
Alex Gladstein:
So, human rights is an umbrella concept that can cover a lot of things. I’m using it primarily to describe civil and political rights, or civil and political liberties…
Laura Shin:
And those are the ones that you mentioned…?
Alex Gladstein:
…which are similar to what’s in the US Bill of Rights, the, in the US Constitution, the UN’s International Covenant on Civil and Political Rights, which was, came to existence three, four decades ago. So, these are things like, again, the right to protest, the right to participate in your government, the right to speak freely, the right to believe what you want to believe, the right to be free from torture and non-just punishment, the right to privacy, et cetera. This is traditionally what I mean when I say “human rights,” I’m talking about basically rights and liberties.
Laura Shin:
And then earlier when you were talking about, like, authoritarian governments, so, how would you define that, and is the opposite always democracy, or, like, what type of government, you know, are you in favor of?
Alex Gladstein:
Sure. The Human Rights Foundation, as a nonprofit, generally looks at governments and breaks them down into three types. There are fully-authoritarian governments, where power is invested entirely in one person or one small group of people. This would be, for example, in North Korea, in China, in Cuba, in Saudi Arabia, different formats, but the same general idea. Then, there are competitive-authoritarian countries. So, this would be something like Hungary, for instance, which is a country where there’s a political party that’s eroding power from the opposition and kind of creating, like, a, you’re seeing a dictatorship start to be born.
What competitive-authoritarian states do is rig elections. They stack their cronies on the judiciary. They start to kind of manipulate the legislature. They attack independent media, and a third type of government is what we would call a liberal democracy, more or less. So, these are, you know, more or less free and open countries. There’s no black and white. From Norway to North Korea is an enormous amount of shades of gray, right, but generally speaking, these are the three types of governments that we analyze, and we focus our efforts on helping people who live under competitive-authoritarian states and fully-authoritarian states.
Laura Shin:
And what are the problems in human rights that you think cryptocurrencies and blockchain technologies could help resolve?
Alex Gladstein:
Well, it’s interesting because, I think the human rights background for me and the time spent with people who live and who suffer under and who work under authoritarian governments actually gave me respect for the revolution that Bitcoin started. When you think about the issue of control, what do governments control, and how do they control people? A lot of it starts with money and economics, but you don’t really think of it that way. So, for example, at most human rights conferences, currency and payments and economics are not on the agenda at all, but then again, what happens when a dictator wants to shut down a nonprofit?
What happens when Mr. Putin, for example, wants to close down an independent media outlet? One of the first things they do is shut down their bank account, right? When a government wants to sort of persecute a particular group of people, for example, they may make that group of people not able to purchase certain things, or they may get, sort of close them out of a certain part of the economy. When one government wants to hurt another government, they often engage in financial sanctions. There may be financial surveillance attached to certain technology in certain authoritarian states.
So, when you start thinking about payments, and about money, and about how money works, you realize that they’re intrinsically tied together, and a really, really great, newsworthy example of this would be recently in Hong Kong, protesters knew that if they used their Octopus cards, which is kind of like an Oyster card or a Metro card, a little card that they use to access the public transit system in Hong Kong, students knew that if they used their student Octopus cards, which were linked to their identity, to go to the protest, that the government would see that they had gone to the protest.
They didn’t want that. They didn’t want to be spied on. So, there were massive lines of people waiting at the machines, which they normally don’t do, to buy little cash top-up cards, and I thought that was a really good example of how payments and money are linked to basic civil liberties and civil rights.
Laura Shin:
Yeah. So, let’s now shift to your story. How did you first hear about Bitcoin?
Alex Gladstein:
I think one of the first times I heard about it was in 2014, when I read Mark Anderson’s New York Times article about Bitcoin, which I think still to this day is one of the best articles about Bitcoin. I also had some friends at the time who were organizing a fun little festival in central California, in the Sacramento River delta called Ephemerisle, and that summer I went there, and I happened to be on a houseboat with Brock Pierce. And Brock was certainly very excited about Bitcoin at the time…
Laura Shin:
Still is.
Alex Gladstein:
…and continues to be, and he was an evangelist for it, and he really put it on our radar at the time. It wasn’t until a few years later, though, that I realized that there might be an intersection with the work that I did at the Human Rights Foundation. There’s an investor named Bill Tai, who I know you know well…
Laura Shin:
Who was, I think, the third guest on my podcast.
Alex Gladstein:
…yeah, I mean, Bill’s been in this space for a long, long time, and he was at one of our events in 2016, and he said, well, why don’t we try and work together, and at the time, and he still is on the board of BitFury, the mining company. So, BitFury, with Bill’s help, was able to come out to the Oslo Freedom Forum in the spring of 2017, and start interacting with human rights activists, and we started having conversations about financial sovereignty, and financial privacy, and how decentralized money might help people who live under very repressive governments.
Laura Shin:
And did learning about Bitcoin change your perspective on your human rights work?
Alex Gladstein:
Yeah, it’s interesting. I think it gave me a lot more hesitation and pause with regard to the status of freedom in democratic countries. I had always had a lot of respect for, and I still do, of course, for what democratic governments had achieved, in terms of protecting certain types of civil liberties. But the more you learn about the way money works, and who controls it, and how opaque it is, and how elite it is, and how closed of a system it is, in terms of who gets to make the decisions about who prints money, who makes money, who monitors that, who decides when to change things like interest rates, even things like the Bank Secrecy Act in the United States.
These aren’t things that normal people think about all the time, and even in the human rights space, I hadn’t really thought about. Learning about Bitcoin got me a lot more curious about how money is created, who gets to decide when a payment goes through, and of course, I’d seen this a little bit with, and I know a lot of people saw the WikiLeaks example in 2010, as, like, something that allowed this to come to the fore of the news for a little while, was that major payment processors like Visa would, were blocking Julian Assange from receiving payments on instructions from the US government, right?
And I think that that, that’s a good example of ultimately why something like Bitcoin is really important, because at the end of the day, it’s a neutral payment platform. Nobody can decide that one person can’t receive money or can’t send it, and in an age of increasing surveillance, I think that’s going to be increasingly important. So, as I started to learn more about Bitcoin, I started to look more closely at my own surroundings, and even, I’m an American citizen, I was pretty surprised at the level of financial surveillance that exists here, the amount of control over money that the government exerts here, even in what I would call a free country.
So, it was really shocking and surprising. So, that’s one way that Bitcoin has kind of changed my opinion on the world.
Laura Shin:
And how did you start incorporating your interest in Bitcoin into your work?
Alex Gladstein:
Well, you know, we talk to human rights activists, and civil liberties campaigners, civil society leaders from dozens and dozens of countries, and very difficult political environments, and we talked to them about, you know, what they need. And a lot of them obviously need money, I mean, they need to fundraise, and receiving that money is often difficult. It’s often something that can get delayed for long periods of time. It’s often something that can get frozen. It’s often something they’re worried that the bank is going to report to the government.
So, if you’re in a country like Zimbabwe or Russia, it may even be illegal for you to receive payments from abroad, right, from, like, a do-gooder who wants to help you from abroad, a philanthropist or a foundation, right?
Laura Shin:
Wow.
Alex Gladstein:
So, you know, I’m hearing these complaints and these concerns which are, of course, decades-old for human rights activists, and I’m just sort of thinking to myself, well, you know, we can just send you, you know, what if you could just learn how to receive money with Bitcoin? It’s not that complicated, and you know, 2015 is different from today, in 2019. Today, in most of the countries that we’re actually interested in, there’s, like, massive local liquidity, meaning there’s an ability for you to turn Bitcoin, at least, into local currency, whether it’s Nigerian naira, or Philippine pesos, or Chinese renminbi, or, you know, Venezuelan bolivars, Iranian rial, there is an ability within as little as a few minutes from when Bitcoin hits your wallet and is confirmed onto your wallet until when you can be holding local currency in your hand.
I mean, I’ve been interviewing people from different countries, and through some of the countries I just mentioned, we’re talking about ten, 15, 20 minutes to change Bitcoin into local currency, which makes it an extraordinarily effective way of moving at least relatively small amounts of money from one place to another.
Laura Shin:
So, you were just talking about Bitcoin, which I now you’re a huge proponent of…
Alex Gladstein:
Yes.
Laura Shin:
…but then, of course, there are the other technologies in this space. So, why don’t you lay out for me sort of, maybe, all the things in crypto that you think could be helpful for fighting human rights, and why?
Alex Gladstein:
Yeah. I mean, I think I’ll just, also just break down the three things in Bitcoin that I think are important…
Laura Shin:
Okay.
Alex Gladstein:
…and then we can talk about how other currencies may or may not have those things. So, we have the deflationary aspect of Bitcoin, and the fact that governments can’t print more of it. This is very important. It gives Bitcoin value. It gives Bitcoin something that’s quite special. The censorship-resistant nature of Bitcoin is really important. The fact that the government can’t stop a transaction, even if it doesn’t like you. That’s extremely important for human rights, and there’s many aspects of Bitcoin, but the third one that I’ll just kind of point out is the permission-less nature of Bitcoin as a financial tool, meaning you don’t have to ask a government’s permission to receive a Bitcoin payment.
You don’t have to have an ID or a passport. So, when we look at, like, the deflationary nature of Bitcoin, the censorship-resistant nature of Bitcoin, and the permission-less nature of Bitcoin, we have a pretty radical financial tool. I think it’s quite revolutionary in the way that it changes the ability for people to transact with each other globally. Now, when it comes to other projects and other values, there are some extremely redeeming projects being done by people, especially in the area of privacy.
Obviously, Bitcoin’s pseudonymous, and there are some serious concerns about, you know, whether or not governments are using, well, we know that, like, European and American entities are using chain analysis procedures to track and try and you know, observe and surveil people, and actually prosecute them based on their Bitcoin activity. It’s unclear how many governments are doing that, but it’s clearly a large problem, and the Bitcoin technological community, you know, hasn’t really, I don’t think, risen completely to that challenge.
There are some people inside the development community that have made amazing tools that do make it possible for you to at least not be the lowest-hanging fruit, if you practice good operational security. We’ve done some research on this that was sponsored by the Zcash Foundation, actually, into the privacy of cryptocurrencies, and Eric Wall, who’s a privacy technology fellow at HRF, did two really good pieces on, you know, just how private is Bitcoin…
Laura Shin:
I know, that first one was amazing.
Alex Gladstein:
…in both a software and the hardware point of view, and the answer is not too dissimilar from, like, encrypted communications. I mean, it really depends on how, what, how good is your operational security, you know? Even if you have perfect operational security, you can still get compromised, right? So, that’s why projects like Zcash and Monero are very important. Not only are they for, let’s say, very technically savvy users, I think real options when it comes to needing to privately send money to each other, they are aspirational, meaning they inspired everyone else in the industry and community to make more privacy features.
So, I think those are two projects that are quite important, and then we have, I think, the technology of the day, or at least of this week, which is Facebook’s ProjectLibre, right, which I will say, I think has probably a very large chance of having a really positive impact on humanity. A lot of the things that I find really amazing about Bitcoin are its ability to do these kind of, like, fast, borderless payments, right? Now, well, we should be clear, inasmuch as Libre as a money, as a piece of technology, is not decentralized. It’s controlled by a bunch of validators.
It’s not censorship-resistant, and ultimately at least won’t be at the beginning permission-less. You’re going to, according to the marketing materials I’ve seen, you’re going to have to prove your identity to open a Calibra Wallet, to be able to own and control Libre, at least at the beginning. They’re promising, you know, a transition to some sort of permission-less environment, which of course sounds exciting, but that’s something that’s difficult to do once you have a permission system.
Laura Shin:
Yeah…
Alex Gladstein:
There are a lot of obstacles to that.
Laura Shin:
They wrote they’ll do it over five years or something?
Alex Gladstein:
Yeah. So, we’ll have to see. I mean, look, you know, the question is, do people trust Facebook on their promises, and I think that’s a really fair question to ask. That’s almost a euphemistic statement.
Laura Shin:
Yeah.
Alex Gladstein:
I think it’s quite fair to distrust Facebook on everything they say, but it’s better that they say these things than not, and I think, I think from what I’ve seen so far, it’s only been a matter of hours as we sit here, let’s say, since the technical details of what Libre is supposed to be has been announced. But from people I respect, who are very technical, and who look into things quite deeply, and are very skeptical of most projects, have actually said that, like, this seems like this was very impressively thought out, and it seems like it could be positive for the world.
Again, this would be a type of cryptocurrency that’s not, it doesn’t have that permission-less feature that Bitcoin has. It doesn’t have that censorship-resistant feature that Bitcoin has, and it certainly doesn’t have the deflationary aspect that Bitcoin has. It’s going to be a stable asset backed by fiat currencies, right? So, it will probably track off-course over time with things like the dollar and yen, which are inflationary. So, what’s interesting to me is that it has use and value, but it doesn’t compete at all with the three things that make Bitcoin really special to me.
So, I think it’s a very complementary technology. Now, I’ve said a lot of positive things about Libre. I think the main suspicions that I have are around privacy and the collection of information, and behavioral and payment data. I don’t know exactly how this project’s going to work. I do know that they want companies and entities to pay a lot of money to be validators, right, and a lot of those people have already entered into those agreements, and you have to think of, like, why would you want to be a validator, right?
Like, what is in it for you, and my fear is that over time, validators will collect data about how payments work, in a way that might be intrusive unto our, into our lives, infringe upon our privacies. I certainly don’t trust Facebook with my own data, so, I would ask you, I mean, do you trust them with your money? I think that there is a possibility, again, that this is, like, a positive force, and something that will help break down barriers, hopefully, between different economies, and possibly be quite a good thing for Bitcoin and other cryptocurrencies, as it introduces potentially hundreds of millions of people to the idea of money that’s not provided by the state, right?
So, that, to me, is interesting, but we have to be careful that we aren’t building the world’s largest financial surveillance machine. I mean, we know what happens when the ability to kind of control money is mixed with a near-limitless ability to surveil you. That’s what’s happening in China today with WeChat. This is an app that basically most urban Chinese people use for virtually everything, and it knows an enormous amount about you, and you use it for all your payments, and payments say more about you than your words, right?
So, I think we need to be very skeptical about the privacy aspects of Libre. Thankfully, it doesn’t exist yet, and we have time, as I think, like, human rights activists, as concerned members of the cryptocurrency industry, as investors in Libre, perhaps, that are listening to your show, to hold them as honest as possible with regard to how they’re going to treat user data and how the system will work, to make sure that it’s not, you know, basically a personal data-eating machine. I think, from what I’ve read and what I understand, there are ways in which Libre can be relatively privacy-protecting.
They have pointed out hat they would like to make this a pseudonymous currency, kind of like Bitcoin, which is surprising and certainly positive to hear. But again, we need to be worried about, like, what the validators are gaining, you know, from running these validation nodes, and we need to be worried about how they can sort of chart payments and how they can potentially censor payments. So, the world needs to be, like, very focused on that, and hopefully we can keep Facebook honest and we can keep the Libre project something that is a net-positive for humanity. So…
Laura Shin:
I mean, I’m sure you saw that they’ve been, they are working with these other nonprofits. So, could you see your, or the Human Rights Foundation working with them?
Alex Gladstein:
We already work with Facebook as a, sort of, I guess, the mother entity, and I think our strategy has been, over the years, we also work with Twitter, who’s a…
Laura Shin:
Right, no, I meant that with Libre, with Libre.
Alex Gladstein:
I guess what I’m getting at is, the Human Rights Foundation works with tech companies because our philosophy is, we would rather have them involved in this work than not. Like, I want these companies to be listening to the stories of human rights activists, and to be understanding the challenges that people face in oppressive governments. So, in the same way that, like, the Facebook policy team may come to our events and be involved in our work, yes, we would love for the Libre policy team to also be there, or the Libre engineers to also be there, so they can understand some of the obstacles that people are facing around the world.
It sounds like, from the marketing materials, that Libre’s very much targeted towards disenfranchised people, and I think that they need to be in touch with initiatives like the Open Money Initiative and some of the other organizations that we work with at HRF, so that they can actually understand, like, what are the financial barriers that people face in these different countries, and how can Libre be a force for good in these places. I think, yes, that would be a really good dialogue to have.
Laura Shin:
All right, so, we’re going to talk about the Open Money Initiative a little bit later, but I actually wanted to pick up on a couple things. You said one was, you just mentioned something about the relationship between money and state. How would you describe a healthy relationship between money and state?
Alex Gladstein:
Well, this might sound radical, but I think in a hundred years, people will look back in time and think that it was kind of crazy that there was a total monopoly on money by governments, whether it was democracies or dictatorships. I think that a healthier relationship is probably something like where there’s a separation of powers, and I’ll add some color to that. In the same way that political power, we now think of, or at least I hope most of your listeners think of, tyranny or dictatorship as, like, a backwards idea, backwards concept, and that democracy, rule by the people, is a more fair and just system, and it provides checks on power, checks on arbitrary power, right?
Then we have information, right? So, I would also hope that your listeners would maybe consider that the open internet, where anyone can permission-lessly access information is a better system of information than what we had previously, which was sort of like ivory-tower and government-controlled information, right? So, decentralizing political power and decentralizing information, I think, have been really very progressive, positive forces for humanity. I want to make the same case for money. I think that money needs to be decentralized.
I think that people need to be able to be more involved in the creation and distribution of money, and that technology like Bitcoin allows that, in the same way that technology, like the printing press or the internet, allowed for the distribution and decentralization of information, and that technology, like democracy and voting, sort of decentralized, you know, political power away from tyranny. That’s my sort of, I guess, radical idea, but I really believe that an open financial system will be just as healthy for the world as an open political system and as an open information system.
Laura Shin:
And when you were talking earlier about how the Human Rights Foundation does work with companies like Facebook and Twitter, in general, like, you have a huge technology focus, I feel like, at the foundation. That’s just my perception…
Alex Gladstein:
Yes.
Laura Shin:
…you know, from the Freedom Forum and just some other things. So, why is that?
Alex Gladstein:
My very first project at the Human Rights Foundation, in the summer of 2007, was to put together materials to be sent to the Cuban Underground Library Movement. So, it was actually DVDs of foreign films dubbed into Spanish that were things like “V for Vendetta” and “Braveheart,” and you know, we did this because information is power, right? At the end of the day, the Cuban government, and this, obviously, 12, 13 years later has changed, inasmuch as the Cuban people have a lot more access to the internet via this sort of paquete system, where neighborhoods get information from the outside world on satellites, and then distribute them amongst their communities.
But before that, you know, you basically only were able to understand what the government provided you, which was obviously a very brainwashed kind of, very limited amount of information about how great the government was and how evil everybody else was. So, by giving people books like “Animal Farm” or “1984” in Spanish, or by giving them access to foreign films that talked about, you know, the struggle for democracy, this was a very popular program, and it was something that made me realize how important literally information technology, at least, was going to be in the struggle for human rights.
Later in my career, I worked a lot on our North Korea programs. So, we’ve been sort of smuggling outside information to North Korea for a long time, and that was originally done through literally typing a bag to a balloon and floating it from South Korea over the DMZ into North Korea, and having a small acid timer go off, and the bag would open, and DVDs, and dollar bills, and candy, and flash drives would drop into North Korea, as a just, kind of an omen, and a, like, a good will gesture from the outside world. More recently, we’ve tapped into the markets that are bustling every day on the border between China and North Korea, and the North Korean refugees that we work with sent in information on flash drives to there.
So, this further reinforced at least my personal belief that information was going to be the key, in many ways, to human rights. Over the years, we also worked on information security. So, like helping activists learn how to stay safe with their communications by using tools like Signal, and I guess trying to get a better understanding of how to stay safe online and how to be, you know, not the lowest-hanging fruit when it comes to their communications. And I think now, you know, financial freedom and financial privacy and financial sovereignty are just as, if not even more important than, all of those things, especially as we head deeper into the Information Age.
I mean, to underline an example I gave you before, today in Hong Kong, people still have the chance to use paper money to top up public transportation cards and to buy sim cards, so that they can plug them into their phone and use telegram crypts without disclosing their identity. They still have that option of using cash. They won’t in five years, or ten years. There won’t be any paper money left. There’s only eight, eight percent of the world’s daily transactions are paper or metal. Ninety-two percent, and that’s probably a conservative estimate, of all the daily financial transactions in the world are digital, and that’s only going to go towards zero as we head through the next decade.
So, we need private, decentralized money. This is very, very, very important. Otherwise, you know, governments will be able to control their people, and corporations will be able to, you know, control people as well. So, private and decentralized money, and I believe that ultimately these two things can come together in the form of Bitcoin and other projects, will be a bulwark against authoritarianism and the surveillance state. I think that’s kind of obvious at this point.
Laura Shin:
We’re going to discuss more about North Korea and the corporate surveillance state and the Open Money Initiative and all kinds of things that we mentioned earlier, but first, a quick word from both me, as well as our sponsors
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Laura Shin:
Back to my conversation with Alex Gladstein of the Human Rights Foundation. Of the economies that have so far been using Bitcoin for human rights purpose, where do you think it’s been having a noticeable impact, or, like, or which country’s usage kind of closely matches how you think Bitcoin could be used in its most useful or non-speculative form?
Alex Gladstein:
Right. So, I think at its current stage of its technology, from what I’ve seen, the most useful way to adopt Bitcoin, and where we’ve actually seen people using it, is as cross-border payment, basically, cross-border payment mechanism, as a bridge between two moneys. So, I’ll give more detail to that, but essentially, in a place like Venezuela or Iran, or the Philippines, or Nigeria, or India, or China, these are some of the countries that I’ve done interviews in, Turkey, there are restrictions on what local citizens can do with regard to the world markets. They are cut off in some way.
Again, that way might be because of their own government’s financial controls. It might be because of US sanctions. It might be because of capital controls. It might be because of lack of infrastructure. It might be because of high fees in the banking sector. There are quite a number of reasons, but at the end of the day, you have billions of people who are disconnected from the financial world, and what we’re observing through research is that some of these people are using Bitcoin as a way to access other money, meaning US dollars, Euros, et cetera.
So, you have, like, someone that I was just with at the Oslo Freedom Forum, who’s of Iranian descent, and her partner, she was saying, you know, her partner’s family, someone is very sick in Iran in her partner’s family. They live in London. Bitcoin has been a way for them to send money to pay for cancer treatments in Iran. Otherwise, it’d be very difficult for them to send money from London to Tehran. This is not something that’s easy to do, right?
Laura Shin:
Yeah. Actually, just for listeners, I think Peter McCormack released that panel on…
Alex Gladstein:
Yes, he did.
Laura Shin:
…what Bitcoin did, which she, she spoke about that there, so…
Alex Gladstein:
Yeah, this is an internet researcher named Mahsa, who’s pursuing a doctorate at Oxford at the moment, and she basically revealed in this conversation that was on Peter’s show about how her family uses Bitcoin to send payments to Iran so that this person can pay for cancer treatment. That was, I thought, pretty powerful. A couple other stories would be that, you know, in countries like Philippines and Nigeria, and these are massive countries, a-hundred-million-person countries, right, you know, tens of millions of people in each of these countries are non-resident workers.
I believe it’s about ten million in the Philippines, and more in Nigeria, and these are people that live in countries outside of Nigeria and the Philippines, and where they don’t have a bank account, so it’s, they’re at the mercy of, like, third parties to get their money back to their family. And in the case of the Philippines, a lot of these folks work in South Korea, okay? So, they need to send Korean won somehow back to the Philippines, where it needs to be received by their family in pesos, right?
So, that traditionally has been a convoluted, delayed, slow process, where on average, according to Luis Buenaventura, who’s an entrepreneur in this space, who was also on Peter’s panel, this can be, you know, roughly about 7.5 percent, is the fee you may pay, and to get a 100 or a 200-dollar remittance back from a place like Korea to the Philippines. So, his company, Bloom, you know, started working in South Korea in I think 2014, 2015, and they were able to get that fee down to three percent using a Bitcoin-based solution.
So, that, to me, is indicative of the power that I think Bitcoin can have with regard to these cross-border payments that transcend governmental financial boundaries. Another good example would be, you know, to be more specific about Nigeria, Timmy, our friend Timmy who runs BuyCoins, which is a Lagos-based sort of cryptocurrency wallet, an exchange…
Laura Shin:
Tim is great.
Alex Gladstein:
…love Timmy, but basically, Timmy was explaining how, you know, some very, very clever Nigerians are using Bitcoin basically to, like, to make money in an arbitrage way, on the way that different currencies float against each other. So, they’re not speculating in the traditional sense, meaning, like, buying some Bitcoin and trying to sell it when it’s hot, and trying to buy it when it’s low. They’re actually using Bitcoin to, like, acquire foreign currency and try to make money in that way.
So, it was really interesting for him to talk about that, and again, like, I think in places like this, whether you’re behind US sanctions in Iran, or whether you’re behind governmental sanctions in a place like Venezuela, or whether, you know, you’re just not really tied into the world, the financial ecosystem, Bitcoin does provide you this, like, lifeline or this other opportunity to get access to the world economy. So, that’s, like, what I think we can observe and testify as currently, like, against the use case.
Now, as Bitcoin hopefully becomes more usable, and as there’s wider, like, adoption of people who accept it, hopefully, as payment, let’s say, then we can maybe start talking about it in the fight against financial surveillance. We’re not really there yet, because no one really will, it’s not like, you know, the subway in New York City or in Hong Kong will accept Bitcoin for payments. So, we can’t really talk about it as a way of protecting our daily financial habits until it adopts that, in that certain way, but it certainly technically could be the answer for that.
I think the answer there is more of, like, socially and politically, will it be feasible, but at the moment, the way that I’ve seen Bitcoin change the world and be a liberation tool for people is as this sort of way to neutrally and permission-lessly send money from one person to anyone else on the planet, and all you need is a Smartphone and internet access. You don’t need a bank account, you don’t need a passport, and that’s, that’s very, very powerful.
Laura Shin:
But so, right now, obviously, this is happening on a very small scale. I think I actually heard you, when I was researching this, that you said that, like, less than one percent of the world’s population has been exposed to Bitcoin, something like that? So, what can you or HRF try to do to make these technologies, you know, either more useful, or more widespread, or is that not your role? Like, how do you want to get to this vision that you’re…?
Alex Gladstein:
Yeah. Well, I think it’s very similar to thinking about encrypted communications technology, something like a signal, right? In the case of, let’s take Bitcoin, for example, or even add all the other cryptocurrencies, right? I think best estimates are 40 to 60 million people by this point have interacted meaningfully with cryptocurrencies, okay? So, again, that’s less than one percent of the world’s population, so you’re right in that aspect in terms of, it’s small when you compare it to the whole world, but it’s quite a few, it’s quite a number of people who’ve been affected by it.
I mean, we’re talking millions of people who’ve had their lives changed in a meaningful way because of cryptocurrency, right? And in that aspect, I think it’s probably similar to the path that encrypted messaging has taken, where at first encrypted messaging, generally speaking, was greeted by the wider public with skepticism, and certainly by hostility by the powers that be, in terms of, well, what do you have to hide, if you’re using encrypted messaging, right? If you’re a digital privacy advocate, what are you hiding, right?
So, these were, like, arguments that we went through in the ‘90s, in terms of, you know, what possibly could you want, if you’re trying to encrypt something and send it to somebody. It can only be bad, right? I think there’s been a sea change in public attitude since then, especially after the Snowden revelations, about the idea that, no, we actually need digital privacy in our communications.
Laura Shin:
Wait, but do you really think that there’s been a sea change?
Alex Gladstein:
Absolutely…
Laura Shin:
Because I feel like after the Snowden thing, like, a lot of surveys showed that people actually didn’t change their behaviors, and they kind of said that they cared about privacy, but then, they didn’t really do anything about it. I mean, even with the #DeleteFacebook thing which happened last year, like, a tiny, tiny fraction of people actually did delete…
Alex Gladstein:
Well, let’s actually break that down. So, what I’m saying is that there are, there is more public support, now, whether or not I say I support privacy and I go home and download Signal, that’s a different conversation.
Laura Shin:
Okay.
Alex Gladstein:
I’m just saying, there’s been wider public support for the idea that people should have private communications.
Laura Shin:
Right, but I’m saying, like, how do we get to those behaviors, which…?
Alex Gladstein:
Right.
Laura Shin:
…we are not there yet, let alone with, you know, Bitcoin, so…?
Alex Gladstein:
So, in the same way that there’s now wider public support, after massive revelatory incidents, like the Snowden, and like, whether it’s WikiLeaks, Snowden, et cetera, and to the fact, like, the ability to whistle-blow securely is important. The ability to communicate, like, securely is important. These things lead to a change in public behavior. Now, a change in public behavior may not result in your friends using encrypted messaging, but it creates a different climate for companies. So, after the Snowden case, one of the most successful things I can point to is that WhatsApp decided to add end-to-end encryption to its messenger. That’s…
Laura Shin:
Right.
Alex Gladstein:
…massive, right? They didn’t have to do that. They did that as a result of a change of public opinion, right? So, oftentimes public opinion can drive companies who have vast numbers of users to do things differently, and in the name of privacy and security for people. So, that’s been something we’ve seen happen, and I think we can hang our hat on that and hope to keep pushing in that direction. So, in the same way, you’re seeing Facebook today basically do something quite brazen, announce that not only are they creating a new currency that’s not going to be just the US dollar, but that it potentially will be permission-less.
Now, again, I had a lot of concerns with the Libre project, but that’s something that’s unbelievable, and no one would’ve ever guessed that that could’ve happened five years ago. In the era of 2014 Bitcoin, if you had told somebody that in five years, Bitcoin, you know, Facebook was going to be announcing its own permission-less cryptocurrency, I think you would’ve probably been laughed out of the room.
Laura Shin:
Right.
Alex Gladstein:
But it just happened today. So, big tech companies have the potential to lay a lot of the groundwork for this, and in the same way that, like, I think a lot of people probably learned first about, what is encryption, because WhatsApp or Facebook Messenger turned it on, right, and they got a little notification about it. Tens of millions of people got a notification about it on that day. I think now, through Facebook, a lot of people are going to learn what cryptocurrency is, and they’re going to learn that money doesn’t need to be provided by a government, and it…
Laura Shin:
Yeah, and since it starts off permissioned, I wonder…
Alex Gladstein:
It won’t be the solution, but I think it’s a step in the right direction. I think we have to be philosophically flexible about it, even in the Bitcoin space. Think about how excited Bitcoiners are about the fact that, you know, certainly quite a few Venezuelans, you know, have used Bitcoin, right, as a means of survival and commerce, et cetera. However, most Venezuelans, according to the Open Money Initiative, when they use something like local Bitcoins to exchange, you know, their money into and out of bolivars, they don’t own their own private keys.
They’re using local Bitcoins as a digital escrow, right? So, this is not philosophically what we want as “Bitcoiners,” right? I think Bitcoiners, you know, want people to use their private key and have sovereignty over their money. That’s not happening in Venezuela, by and large, but it doesn’t mean that it’s not a good step in the right direction. So, I think we need to retain a certain level of philosophical flexibility, while still being skeptical. So, I guess what I’m saying is that even if you don’t trust WhatsApp, which was later then acquired by Facebook, or you don’t trust Facebook with Messenger, or you don’t trust Telegram, or you don’t trust now Facebook with Libre, it’s really good to see these companies going in that direction.
Look at Apple. I mean, Apple’s trying to remake itself as a privacy company, and I think we should be excited about that. We should be skeptical, and we should hold their feet to the fire, but as someone who cares about user privacy, I’m really grateful that these companies are trying to, like, please an audience that cares about privacy, and that cares about permission-less finance, let’s say, as opposed to the other model in the world, the Chinese model, where the dominant apps are so real-time censored that it seems like it’s an episode out of “Black Mirror,” you know? So, these are positive developments, I think.
Laura Shin:
Yeah. Yeah. I don’t know, it’s…yeah. It’s one of those things where I feel like there is still that gap between what people say, or, you know, and what they do, because even in Europe now, when you go and you get these, all these pop-ups on every web site, being like, we’re collecting information about you for our cookies, everybody just accepts, or, you know what I mean? It’s like, there’s no, I don’t know. I just feel like, what are you going to do, be like, okay, I’m not going to read this web site now? I’m not, you know? So, in that regard, you know, I just feel…yeah.
Alex Gladstein:
Well, I agree with you on that. I do think people trade their freedoms and privacy for convenience far too often. In fact, at the Oslo Freedom Forum this year, we had an exhibit, and it was, it showed people who maybe haven’t used WeChat before how it works, and it was a sort of a translation into English of the Chinese model of WeChat, let’s say. And it was like, up above the interface was this mirrored image of the word “evil” and the word “easy,” right, because it’s so easy, but it’s also evil, you know?
So, giving up all your privacy and freedom is convenient. Like, it is something that people will want. So, I think, you know, the answer for, like, people who care about civil liberties, personal freedoms, personal data lies in the technology producers and the technologists making something that is convenient. That’s key. So, WhatsApp Messenger is convenient, so them adopting, like, end-to-end encryption is a good step in the right direction. I guarantee you, whatever this wallet that Libre is going to be used with, you know…
Laura Shin:
Calibra.
Alex Gladstein:
Calibra, this thing’s going to be awesome in terms of its user design. I can guarantee it. It’s going to be super-easy to use, and it’s going to on-ramp a whole bunch of people onto non-government-provided money, and I think that that’s really interesting.
Laura Shin:
Yeah, but that is the part that’s offered by Facebook itself.
Alex Gladstein:
Yeah, and again, like, I’m, you know, skeptical of the impact that projects like this will have on privacy, and I’m worried, but at the same time, I think we have to understand that things like this are going to on-ramp more people onto the general concepts, and I think this is going to be great for Bitcoin, probably. I mean, I think it’ll get more people interested. I mean, look, a lot of people are going to learn about cryptocurrency first about Libre. They’re going to first learn it through Libre, and then they’re going to dig around on message boards and email, and newsletters, and they’re going to be like, what is this Bitcoin thing?
And then they’re going to learn about Bitcoin, and that’s going to be, like, you know, the red-pill moment in “The Matrix,” where they’ve heard about Libre, and then all of a sudden, wow, this is the real deal. You know, this thing is actually permission-less, this thing’s actually decentralized. This thing’s actually censorship-resistant.
Laura Shin:
I mean, you’re a believer, so, but I’m not sure.
Alex Gladstein:
Well, I…
Laura Shin:
People might just use Libre, and might be like, this is cool, this works. I’m going to use this.
Alex Gladstein:
Here’s the thing. The world is a lot bigger than New York or San Francisco, where you and I, you know, spend most of our time, probably. Yes, Americans, like, are pretty blasé about privacy, but the people I work with, they care about it, wow. So, if I can tell people, you know, in Zimbabwe or in Hong Kong, or in places that are actually facing, like, an actual either authoritarian government or authoritarian challenge, they will rise to the occasion. I mean, it’s amazing to watch what Hong Kongers are doing today. They’re pulling out all the stops.
They’re wearing masks to confuse facial recognition, and they’re using cash to, you know, quietly use public transportation services, and quietly use social media coordination services. It’s pretty amazing. So, I do have this belief that people will rise to the occasion. They just won’t do it where they’re not pushed to do it, and in America and in Europe, we live in societies where we take our freedoms for granted, for sure. Most people do.
Laura Shin:
Yeah.
Alex Gladstein:
So, I think the innovations will come elsewhere. That’s why you’re seeing Bitcoin being adopted in Lagos and in Caracas and in Tehran, where Mahsa at the Oslo Freedom Forum was saying that, you know, if you get into a cab in Tehran today, people are going to be asking you about Bitcoin. Like, adoption’s happening in these places, not in Los Angeles or Sydney or Tokyo, and I think that that’s all cohesive. Like, I think that all makes sense. These technologies will be adopted where they’re, you know, most needed.
Laura Shin:
Yeah. Yeah, no, watching the Hong Kong thing has actually been somewhat emotional for me, because I’m just like, oh my gosh, if I were to have grown up in a country that’s, like, similar to the US and then suddenly have it become more in, like China, I would also be like them. I would be like, oh my God, no, like, this is terrible. But anyway, so, I, like, we’re running out of time, and I have, like, five million questions for you, and we keep talking about that Open Money Initiative, and we keep referencing Venezuela. So, just talk a little bit about kind of, like, you know, this initiative that you’re backing, yeah, and what it is that you guys are seeing there and what you hope you can accomplish with the Open Money Initiative, and what it is.
Alex Gladstein:
The Human Rights Foundation has always had a founding focus on Venezuela, and in 2006 and ’07 and ’08, it was tough, because a lot of people thought Hugo Chavez was a great guy, and you know, they were like, well, he’s a man of the people. Now, today it’s uncool to support populists. It’s uncool to support authoritarians, but at the time, people loved Chavez. They thought he was, like, the best thing since sliced bread, generally speaking.
I mean, I just remember, when I first started HRF, it was very difficult to have serious conversations about, and I would say things like, you know he’s, like, stacking the Supreme Court, and he’s taking radio stations off the air, and he’s taking the license away from TV stations, and he’s putting, you know, journalists in prison, people just didn’t want to hear it. They, like, really wanted to support him, and unfortunately, sadly, we were right to sound the alarm on Venezuela, and it has become the worst disaster in the western hemisphere.
Four million Venezuelans have already left Venezuela, and as many as eight million will have left by the end of next year, and the average Venezuelan has lost something like 25 pounds. There is just starvation, there’s absolute destruction in the form of hyperinflation, massive theft and corruption, environmental destruction, you name it. So, this has all happened in the last decade, and it has happened increasingly since 2014 and ’15, and we’ve always been an organization that’s focused in helping civil liberties and political rights in Venezuela. We’ve always looked at assessing the health of the country and that area, and we’ve watched it deteriorate.
Now, what was much more acute, almost, was the economic deterioration of Venezuela over the last five years. So, when I met a group of very enterprising researchers and designers last summer who wanted to investigate, you know, how were Venezuelan IDPs or refugees living in Colombia, you know, interacting with the world financially. I thought this was a fascinating project. So, the Human Rights Foundation is very proud to support the Open Money Initiative, and their efforts to understand, you know, how can the outside world be helpful in designing technology that Venezuelans can use that can benefit their lives.
And I like that they’re coming at this from an agnostic point of view from a platform perspective, or a protocol perspective. They’re not going there to push a particular project. They’re going there with open hearts and open ears and open minds, and they’re, like, basically providing the world with a, like, a perspective on what do Venezuelans need, and what do Venezuelans need? Dollars, US dollars, and Bitcoin is such a very distant second, you know what I mean, and there are even, like, different types of US dollars.
There’s dollars Zell, and dollars in AirTM, and then there’s cash dollars, and they all have their different prices, right? So, we’re learning about this kind of amazing, kind of tragic but also kind of fascinating micro-economy that has grown in this area, and…
Laura Shin:
And why would the value be different, depending on what form it’s in?
Alex Gladstein:
So, more people will accept different types of US dollars, as merchants inside Venezuela. It’s easier for you to spend, for example, you know, one type of app’s dollars than another type of app’s dollars…
Laura Shin:
I see.
Alex Gladstein:
…okay? So, they have, like, a premium on the price. Some are more valuable, right, in the same way that, you know, digital bolivars are a different value than printed bolivars, because you only need printed bolivars for certain things, and they’re harder to access, right? So, it’s fascinating to see this kind of, like, new, you know, again, tragic, but kind of fascinating to see this new economy being born, and there’s a lot of suffering, and there’s nothing you can take away from it but sadness, as the world does relatively nothing to help Venezuelan refugees.
Big institutions and groups like the World Bank, and you know, I think organizations that typically help refugees, I don’t know, I just feel like they don’t see Venezuelans in the same light as they see, maybe, Somalis, or Syrians, or Afghanis yet. I mean, it just, even though it’s the exact same human situation, there’s something about it where they’re not quite seen as refugees in the same way yet. I think that shift will come, but in the meantime, I think getting companies to understand how they can play a role is useful, and the Open Money Initiative is providing a window into how money works in Venezuela, and what people can do.
And you know, hearing them talk, I mean, I know that, for example, designing open-source apps that run on older phones that would allow people to like, for example, receive different kinds of digital assets, whether it’s, like, Zell credits, or AirTM credits, or Bitcoin, and then exchange them into bolivars, building an app that would do all of that in one would be fantastic. So, coming to an understanding of these things, and then going back to the industry and saying, here’s what people need,” I think is a really, really valuable design research thing that the Open Money Initiative is doing, and that HRF would love to support in other countries around the world, too.
Laura Shin:
So, I want to switch the topic now to North Korea, which, you know, is personally very interesting to me, because I’m of North Korean, or Korean heritage, but partially North Korean. So, so far what we’ve been discussing is all the ways that Bitcoin and cryptocurrencies are good for evading, like, surveillance states or oppressive regimes, but that is actually also the aspect that makes it good for a country like North Korea to evade sanctions.
And in general, I just feel like that country, when we’re talking about how Bitcoin can be used authoritarian regimes, is the one, like, outlier, simply because North Koreans don’t have access to the internet, so they can’t really use Bitcoin against the regime. So, is that just going to have to be the way that it’s going to be, because actually, so far, what’s going on there is that North Korea itself, the government is benefiting from Bitcoin…
Alex Gladstein:
Yeah.
Laura Shin:
…you know? So, how do you think Bitcoin can help that situation?
Alex Gladstein:
Well, I think when it comes to North Korea, I think we have to look at how the government sustains itself, and at the end of the day, it’s about power and control and fear. Now, it is true that the North Korean government has figured out, it’s very clever, it’s very smart, they’ve figured out that having a sophisticated cyberwarfare capacity’s very important, right? So, putting money even aside for a second, they’ve been very successful in hacking public infrastructure in South Korea.
Of course, we all know about, you know, the Sony hacks that ricocheted across America many Christmases ago. There’s all kinds of sabotage attacks that they’ve done internationally that they’ve been…
Laura Shin:
Yeah, WannaCry.
Alex Gladstein:
,,,quite effective in. Exactly. Now, when it comes to money, you know, yes, it definitely seems like, from what we’ve observed, that the North Korean government has figured out if they rob cryptocurrency exchanges, that that can be an effective way for them to steal money that they need. But generally speaking, I think from a bird’s eye view, virtually all of the money that the North Korean government runs on is in the form of dollars, and renminbi, and their own money.
Bitcoin makes up a very small percentage of the ability of the North Korea government to hold onto control. I think long-term, Bitcoin as a decentralized form of money that will inevitably seep into North Korea, in a way that the government cannot stop at the end of the day, will only be a bad thing for the North Korean government.
Laura Shin:
Wait, you mean to the people?
Alex Gladstein:
Absolutely.
Laura Shin:
How so?
Alex Gladstein:
Satellite access, already. So, today, there is satellite coverage over North Korea, if you look at Blockstream, if you look at the map on their website. So, if I had a, like, small satellite device, I can send and receive Bitcoin transactions in the middle of North Korea without any internet. That’s a start.
Laura Shin:
Is that something that the Human Rights Foundation would try to do?
Alex Gladstein:
That is something…
Laura Shin:
Then, how would they get, like, what…?
Alex Gladstein:
I think anyone who’s doing that…
Laura Shin:
…like, what do they do with the Bitcoin…?
Alex Gladstein:
…probably wouldn’t say that on a podcast. What I will say is that there is liquidity, massive liquidity in China, and at the Chinese border, of Bitcoin. So, Bitcoin is immediately valuable in Chinese border cities. So, I’m just painting a hypothetical here, but if you, North Koreans are the most creative and entrepreneurial people in the world. They’re the most bold and creative, they will do anything they can to survive…
Laura Shin:
Wait, really? I feel like they’ve been totally brainwashed.
Alex Gladstein:
Despite all odds…
Laura Shin:
They’re not, how can they, how can they be creative?
Alex Gladstein:
I’ll explain. So, the North Korean defectors…
Laura Shin:
They were not trained to be creative.
Alex Gladstein:
…I know, exactly, but they are incredible, the ones that I’ve met, the people who’ve escaped used so much not just bravery, but ingenuity, cleverness. I mean, these are people who don’t have the tools we have. They don’t have the freedoms we have, and they have to figure it out anyway, and I’m just saying that they, they figure it out. They’ve been so successful in just exploiting the tiniest little, like, slivers of freedom to maximize the well-being for their family and their friends, and I wouldn’t bet against them, let’s put it that way. For…
Laura Shin:
Yeah, I agree with you with the defectors, for sure.
Alex Gladstein:
…the North Korean defectors that I met are amazing.
Laura Shin:
I would never bet against…
Alex Gladstein:
I’m not talking about the government. I’m talking, the people of North Korea…
Laura Shin:
Right.
Alex Gladstein:
…are going to really, like, turn lemonade out of lemons. The point I’m saying is that overtime, as more and more equipment gets into North Korea that can send and receive information over the internet, and as there already exists a way to send and receive Bitcoin in North Korea, and as things like Opendimes, which is a way of, like, physically trading Bitcoin, like, in physical cash, potentially popularize, and as cryptocurrency and Bitcoin continues to increase in popularity in China, it’s only a matter of time before the stuff seeps into North Korea and starts eating away at the government’s control over money.
One of the more interesting things that I heard from a North Korean defector was from Thae Yong-Ho, who you met at the Oslo Freedom Forum.
Laura Shin:
Yeah.
Alex Gladstein:
Thae Yong-Ho…
Laura Shin:
He was amazing.
Alex Gladstein:
Thae Yong-Ho is the highest-ranking diplomat to ever escape from North Korea, and I asked him a question, because I had heard that in 2009, the North Korean government scrapped its currency and introduced a new currency, completely, meaning people who had saved for decades in cash, that pile of money under their bed was all of a sudden useless. And I was so curious about this, and Thae Yong-Ho, of course, was there, and a very high-ranking official, so he knew all about this.
It’s never been reported in the English media, but I wanted to learn from him about what exactly happened, and you know, he was basically saying that the economic minister, unity, or whatever that they called him, after this happened, the plan didn’t work as predicted. Basically, people were so despondent over this that they just didn’t go to the markets for, like, a day or two. That’s about as much protest as they could muster. They just didn’t go to sell their wares because they were so depressed about what had happened to their savings.
And because of this was, like, a period of depressed economic activity, according to Mr. Thae, and several days later, Kim Jong-Il had the minister of economic unity execute with an AK-47, is what he told me, which I thought was pretty shocking. But this is…
Laura Shin:
Or par for the course there.
Alex Gladstein:
…yeah, but this is a story about how the government is trying to hold onto control of the population through manipulating money, and at the end of the day, Bitcoin will prevent them from doing that. So, it might be a very far-off thing, but I can’t imagine that Bitcoin, like, in a sort of umbrella, you know, net kind of impact, way, is positive for the North Korean government. I mean, maybe short-term, fine, but long-term, it’s a technology that eats away and destroys authoritarianism, because at the end of the day, all authoritarians hold onto control of their people through financial control.
Laura Shin:
I love it. Okay, hopefully, hopefully you’re right, that this will happen over the long term. So, I want to ask just sort of generally about regulation, because, so, I had multiple questions on this, but I’m going to try to wrap it into one. So, we’ve seen local Bitcoins disabling cash…
Alex Gladstein:
Yes.
Laura Shin:
…halting operations in Iran, and presumably, these are functions that I think you, you know, advocate for, and…
Alex Gladstein:
Yes.
Laura Shin:
…think could help people fight authoritarian regimes. So, in general, how do you think regulation in the crypto space should be handled?
Alex Gladstein:
Well, not like that. I think there’s a lot of fear, and European regulators seem to be the worst offenders at the moment. It’s really sad to see free countries crack down the hardest on this new technology, even harder than dictatorships. It’s bizarre, but you know, the Finnish government has got to realize that when it basically forces a company like local Bitcoins to, whether it’s complying by orders from the American government or not, when it, or EU orders or whatever, when it forces a company to cut off services in a country like Iran, that it’s cutting off a lifeline that’s helping people.
I wish they would look at it like, how can we help Iranians, as opposed to, how can we comply with these Draconian economic policies? I think that this is just the beginning. I think that centralized exchanges, I don’t know if you’ve seen this, but over the last few days, several other platforms have closed off access to US uses, and I think you’re going to start seeing this more and more, and it’s a phase we’re going to go through, where at first, governments just, for a long time, of course, didn’t understand or didn’t know about cryptocurrency, Bitcoin, and then they sort of laughed it off, and now they’re starting to take it seriously, you know, and now they’re going to start to crack down a little bit.
I think the worst is, obviously, yet to come, when it starts actually eating away at their power, but we may not be there for a little while. But I think you’re going to start to see more and more attacks. I mean, India has already really restricted the ability of exchanges to operate in that country, obviously, not a great thing to see in the world’s largest democracy, really, anti-innovation and kind of tragic. But you’re going to see this happen in Europe, and you know, maybe through the good work of people like Coin Center, maybe the US government will not do the worst things that it could do, and maybe it’ll be a little more open-minded.
I do have some hope that the US government will be a little more open-minded than, than these European and Indian regulators, based on just conversations I’ve had and things I’ve heard from US regulators, but we’ll see. We’ll see. I think it’s unquestionably a bad thing to cut off technology access to people living under dictatorships, and I hope that companies see that. I’ve certainly talked to other, I guess more able, just because they’re smaller and more nimble, but you know, companies like, for example, Paxful, or companies like, for example, there’s, like, Bisq, for example…
Laura Shin:
And what do those do?
Alex Gladstein:
These are sort of more, let’s say, peer-to-peer marketplaces, more sort of decentralized exchanges, where people rely less on an intermediary, in a setup like Bisq, but basically these people are, like, super-excited about being able to provide access to, like, users in places like Iran. So, when one exchange gets shut down, the others, I think, are reacting in an interesting way. So, I certainly hope that companies can do what they can to fight off the regulation and keep services alive in these countries that need it.
Laura Shin:
So, you just mentioned a couple of companies, but in general, like, which crypto companies or projects are working in areas that you think are the most promising for human rights purposes?
Alex Gladstein:
Well, I mean, look, it’s true to say that even though LocalBitcoins has stopped its, you know, services in Iran, that it is overwhelmingly the most important company in the world when it comes to providing liquidity and ability to turn Bitcoin and other digital assets into local money. It is just absolutely so important in a country like Venezuela, critical, so important in other countries. I mean, it’s fairly dominant in places like Nigeria, if you interview people there, fairly dominant in Southeast Asia, very important, East Asia.
So, I think LocalBitcoins is kind of a, a real lifeline right now. So, I hope we can figure out ways to support them and help them, you know, fend off more regulation, because people really, at the moment, need their service. I mean, it’s just sort of network effect, in that they were there first, and that people trust LocalBitcoins as a brand in these places, but it’s really kind of amazing to watch the volume, like, in these places. Just to give one example, today, the volume of exchange in LocalBitcoins from Bitcoin to bolivar is multiple times that of the Caracas Stock Exchange.
Laura Shin:
Yeah, I saw you wrote that…
Alex Gladstein:
Yeah, I mean, and I guess it’s a low bar, because who’s, you know, investing in the Venezuelan Stock Market, but it’s a paradigm shift, right, and probably one of many. Like, in the future, crypto exchanges will be much larger than stock markets. Like, I think this is the first example. This isn’t just, like, some hypothetical I came up with. I’m reporting an actual fact, so, yes, it’s in an extreme economic example, a dystopian one, I would say, but I think things are going to get worse before they get better in a lot of places, and again, cryptocurrency is going to be a serious alternative option for folks.
Laura Shin:
All right. So, I think the last questions I have for you are just about, like, where people can learn more about you and HRF, but also, I noticed, so, HRF accepts Bitcoin for donations.
Alex Gladstein:
Yes.
Laura Shin:
How popular is it for people to do that?
Alex Gladstein:
Over time…
Laura Shin:
And then, do you, like, immediately convert it, or do you keep the Bitcoin?
Alex Gladstein:
Yeah, so, these are interesting questions. So, we started receiving Bitcoin donations in 2014, and they’ve been very helpful over the years, and I certainly would encourage people to send them to us. We generally have a policy of converting the Bitcoin into dollars to spend them on operating programs, but if you write us with a note with your intention, that you’d like us to keep it, this is something I’m looking into with the help of certain people, of basically setting up a, sort of an ability for you to make a donation in Bitcoin to us, for example, that we would agree to hold onto for a certain amount of time.
So, I really like this idea, and certainly if, you know, listeners want to help me design this, give legal advice, et cetera, I would very much welcome that. You can reach me at [email protected], or on Twitter at Gladstein, my handle. So, we would very much be open to, like, say, long-term Bitcoin donations, and donation of other cryptocurrencies, if that’s something you’re interested in. And I would just lay out, like, as a final thought, like, the four things that we would like to, that the Human Rights Foundation would really like to do in the cryptocurrency space, so, number one would be design research, much like what the Open Money Initiative is doing.
We’d love to replicate and share some of those findings and procedures around the world, so that people can understand what’s happening in these countries, and that we can design better tools for people who need them. That’s number one. Number two would be public education. So, we’re doing a lot of, like, public education about Bitcoin, cryptocurrencies, you know, in medium formats and in events and conferences that are not cryptocurrency-related.
So, for example, when I write something in Time or CNN, or I speak at an economist conference, I think that’s, in many ways, very effective compared to, like, just sort of speaking to the same small group of people, which I now and love, but like, we really got to get out to the 99 percent that don’t know anything about cryptocurrency and Bitcoin. So, public education is totally key. A third area would be providing opportunities for, let’s say, in the case of Bitcoin, core development.
So, currently, core development is something that’s done by not enough people, and a lot of that is because there are just certain niche resources you need to understand to learn how to code and to meaningfully contribute to Bitcoin Core, for example. So, we’d love to try and support people from around the world to come to some of the classes, people like Jimmy Song or Justin Moon, and…or at Chaincode, et cetera, and be able to have that experience.
So, that’s something I’d love work on, sort diversifying, whether it be from geographical diversity, gender diversity, et cetera, and the fourth area, area, which I think I think is kind of most interesting, is operational security for activists. I mean, if they’re authentically, and I can tell you they are authentically interested in receiving Bitcoin payments and sending them, as opposed to carrying bags of cash on a bus, or, you know, being reliant and fearful about their bank account.
They do want to use Bitcoin, but they need to know how to use it, and they need to know how to use it safely, or as safe as possible. And that’s not, like, easy-to-find information, you really have to kind of piece that together, and most of these folks are brave entrepreneurial activists, not technologists, right? So, they need, like, easy-to-understand guides and mentorship with regard to Bitcoin operational security. So, you know, we’d like to partner with you and anyone else on these areas of design research into global cryptocurrency adoption, public education about Bitcoin, diversifying the people who are doing the core development and doing operational security for people who actually want to use this stuff.
Laura Shin:
Great. Well, thank you so much for coming on Unchained.
Alex Gladstein:
It’s been a real pleasure. Thanks for having me.
Laura Shin:
To learn more about Alex and the Human Rights Foundation, check out the show notes inside your podcast player. If you haven’t yet taken the Unchained survey, now is the time. Go to surveymonkey.com/r/unchainedsurvey2019 to tell us how we can do better at Unchained. And don’t forget, those who answer the survey can enter to win one of five free Casa Bitcoin lightning nodes, plus a free year of Casa’s Gold Membership. Thanks, Casa, for donating.
Unchained is produced by me, Laura Shin, with help from Fractal Recording, Anthony Yoon, Daniel Nuss, and Rich Stroffolino. Thanks for listening.
