UNIDENTIFIED PERSON, BYLINE: NPR.
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CARDIFF GARCIA, HOST:
Hey, everyone. It's Cardiff. This is THE INDICATOR FROM PLANET MONEY. On Tuesday of this week, February 16, the price of a single Bitcoin climbed above $50,000 for the first time ever. And a year earlier, Bitcoin was priced at less than $10,000. So it had more than quintupled in a year. What is going on? That's a question that a lot of experts in finance and economics have been trying to answer in the roughly 12 years of Bitcoin's existence because as a currency, Bitcoin is not backed by any government, like how the dollar is backed by the U.S. government. Its value is derived entirely from the continued faith that people who own Bitcoin have in its future.
Today on the show, I'm speaking with Joe Weisenthal. He's the executive editor of news for Bloomberg Digital. And Joe's just published this fascinating article in Bloomberg Businessweek arguing that faith is exactly the right framework for understanding Bitcoin's appeal because with its mysterious vanishing creator, its early apostles, its rituals and even its holidays, Bitcoin is a lot like a religion. And after the break, Joe tells us why understanding this about Bitcoin also explains why it is so popular now.
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GARCIA: Joe Weisenthal, welcome to THE INDICATOR.
JOE WEISENTHAL: Thanks for having me.
GARCIA: So, Joe, we know that Bitcoin was created back in 2009 to be a currency that doesn't need a centralized authority to give it legitimacy - no government, no central bank. It was meant to be a truly peer-to-peer digital currency. But its origins are totally mysterious and enigmatic. So that seems like the right place to start the analogy between Bitcoin and religion.
WEISENTHAL: Yeah, absolutely. I mean, I don't think you can talk about Bitcoin at all without sort of discussing the fact that it was created by someone who is very prophetlike. This person, Satoshi Nakamoto, we don't know his real name at all. We do know he created it. But there are a lot of things about him that are prophetlike. We know the fact that at some point he seems to have disappeared or died or departed the Earth. He wrote this thing called the white paper, which is originally this sort of - I think it's just a 10-page document, essentially outlining how a digital peer-to-peer money would work. And it was this huge problem that people had tried to work on for a long time.
And in this paper, he just spelled it out exactly how it worked. That document that he wrote is, like, an original founding spiritual document. He also wrote other texts, for example, on message boards, the Bitcointalk message board. It might be similar to a Talmud, in which it's a commentary on the original vision. And even today, people go back and look at that white paper or look at his comments on the message board to try to divine meaning, to try to guide them in terms of the direction that they're taking the movement.
GARCIA: Yeah, right from jump, you've got a mysterious founder who prematurely left the realm, so to speak, in which his followers had initially encountered him. And he left behind these sacred texts, all very much resembling a prophet.
WEISENTHAL: Lots of aspects of him prophetlike. Another thing, of course, that we associate with prophets is a certain level of selflessness - right? - that they want to do something that's good for the world, that they want to give something. And one of the extraordinary things is that, as far as we know, he himself - or whoever he is, he or she - never profited personally. Bitcoin, the total value of them, as of right now, is close to a trillion dollars. The Bitcoin in Satoshi's wallet, which can be seen, would make him, theoretically, one of the richest people in the world. There's never been a coin sold from that. But, again, it's because there is this, sort of we can identify this mystical origin that all these things associated with the prophet Satoshi are so prized.
GARCIA: Yeah, and definitely in Bitcoin's early years, there were a lot of what you might call proselytizers, apostles, saints - people just spreading the word when it was still this small fringelike movement. And from what I understand, they even have holidays?
WEISENTHAL: Yeah, exactly right. So it's not just that there is, like, this cult. Again, what are some things that we think of in a religion? There's obviously the belief system. But then there's also just things that people in the religion do - practices, rituals observed. And you see that with Bitcoin. There are holidays. Once every four years, the pace of issuance of a new Bitcoin declines in half. They call it the halving. You know, it's like a harvest festival, except it only takes place four years. There is the day that's sort of famous - I think it was in 2011 - someone bought a pizza for Bitcoin. I think that pizza today would be worth about half-a-billion dollars or something like that.
WEISENTHAL: But, again, people recognize that day every year, and this is Bitcoin Pizza Day. And so, again, like, literal holidays that are on a calendar, sanctification of time - really important.
GARCIA: And also, Joe, there have been a lot of Bitcoin scandals through the years and a lot of doubters who've kind of said, you know, Bitcoin will only ever be useful for things like money laundering or other shady things where it's helpful to use a currency that no central authority is watching. The doubters might still end up being proved right about that, by the way. But the point is that, much like a religion, it took some time for Bitcoin to start gaining a wider, more mainstream acceptance to the point where it is now, where even big Wall Street investors and a few big companies have bought Bitcoin with their cash. Who knows if that'll last, but it took a while to get here.
WEISENTHAL: Yeah, exactly right. And, you know, I think the other thing is, probably everybody is familiar with somebody in their life who, like, acquired Bitcoin and then, literally, just will never talk about anything else again. And it is sort of this weird, like, brain virus. Like, someone - suddenly someone will get into it, and that's all they tweet about. That's all they talk about, especially in the early days. I think if you look at them as sort of religious converts, suddenly that behavior makes more sense. And to that point, the sort of - the vilification, the evilness of central bankers, the evilness of fiat money, the evilness of the Fed and bailouts and everything like that - again, all sort of consistent with the idea of a sort of religious metaphysical worldview.
GARCIA: And finally, Joe, in the last couple of decades, we also know from a lot of surveys that the U.S. and other parts of the world have become more secular and also that, in the last couple of decades, things have been really disappointing from an economic standpoint. So I guess it kind of makes sense that people would be looking for a replacement, something to believe in, something to be passionate about. And I guess I'm wondering if, based on your reporting on Bitcoin, that seems to fit into the story of why Bitcoin has become so popular.
WEISENTHAL: One hundred percent. Like, I don't think it's an accident that Bitcoin emerged in the immediate wake of the great financial crisis, which was probably one of the most sort of shattering episodes for people, literally, around the entire world in terms of shaking their faith, shaking their sort of belief in any sort of the legitimacy of existing institutions. And I do think that, like, it is a form of identity - again, that it fills a need that people have.
And people always point this out, that there are various secular things that people do that seem to fill some of the space that was deserted or, you know, left open by the sort of slow disappearance of religion. You know, you often hear - it's like, organic foods or yoga or things like that. And I think Bitcoin absolutely is one of the things that people can sort of identify with. People like being part of something bigger. They like the sort of - the shared language, the shared jokes, the shared memes that perhaps traditional forms of identity, like religion, are - they're currently not getting from that.
GARCIA: Joe Weisenthal, thanks so much.
WEISENTHAL: Thanks, Cardiff.
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GARCIA: This episode of THE INDICATOR was produced by Brittany Cronin and Emma Peaslee with help from Gilly Moon. It was fact-checked by Sam Tsai (ph) and edited by Paddy Hirsch. THE INDICATOR is a production of NPR.
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