Episode Transcript
[00:00:00] Speaker A: What role do intermediaries such as merchants, distributors and traders play in the market?
Far from being mere profiteers, these intermediaries play an essential role in the division of labor. Without them, society as a whole could not function the best in Bitcoin Made Audible I am Guy Swan and this is Bitcoin. Audible.
[00:00:43] Speaker A: What is up guys? Welcome back to Bitcoin. Audible I am Guy Swan, the guy who has read more about Bitcoin than anybody else you know. And we've got a good one today. This is. I have no idea where this article came from, shout out to whoever it was that linked me to it, but this one is about intermediaries. I think we have.
[00:01:05] Speaker A: I think bitcoiners are so anti bank and they're so good at seeing the problems, but they fail to distinguish.
[00:01:17] Speaker A: The problem in the system from the system itself. They fail to distinguish the bad incentive or the very piece of control from the underlying structure that's actually designed to produce value. How is it that something like a network like a Amazon or a Twitter that's supposed to provide value ends up being a tool of control? How is it that a bank which is supposed to facilitate payments and protect money ends up becoming a master and controlling what everybody does with their money and surveilling them all? And we make this grave error of thinking that the goal is to end the banks. The goal is to make a bank something that can't exist. It's to build a world without intermediaries at all. And I think that is a fundamental error. It's a misunderstanding of what the problem is for how our intermediary systems work today. And believe it or not, Friedrich Bastiat actually has one of the the best arguments or the most insightful in my opinion, understandings of what the role of intermediaries are. And in his day, when socialists were coming out aggressively against intermediaries and saying that, oh, the government should just nationalize all of this and there should be no retailers and there should be no merchants. And all of this stuff he correctly understood and he wrote at length about the unseen, what it is that intermediaries actually do and how the function of society literally is not possible without them. And when we apply this to our day and to our problems is to understand how we separate the intermediary from what it is they are intermediating. And I'll explain more in depth in the guys take to follow and let Bastiat here or well, Ulrich, who is quoting and summarizing and expanding on what Bastiat means explained we will let the two of them lay the foundations.
This show is brought to you by Leden IO. They do bitcoin backed loans and they make it easier than you could possibly imagine. If you're in a bad spot and you need fiat or you need it when the price is down, check out Leden I.O. and I have a special link for you with a discount right in the show notes. The show is also brought to you by pubkey. Go to Pubkey P U B K Y app and log in with the PubKey Ring app. If just experiencing that, especially after listening to this intermediaries article, doesn't make you curious about it, then you've got a problem. You can always come back here and there will be a link in the show notes. Then the hrf, the Human Rights foundation and their Financial Freedom Report. Check out their newsletter. It is an indispensable resource. I've heard about so many amazing bitcoin tools and services through them and you can click the link right down in the show notes. And then lastly, get Chroma. They have some amazing discounts right now for the holidays. Get your light health in order. They do red light therapy. They have some really fantastic standing lights and IR lights. And my favorite the nightshades which I am wearing right now actually to make sure I don't my hormones really bad looking at these screens all the time because it really does mess it up. Be healthy for the holidays. Get yourself a pair of nightshades. You know where to find all of them and if you don't, well then that's your fault. With that, it's time to get into today's article and it's Friedrich Bastiat. The Unseen Role of Intermediaries by Ulrich Fromme what role do intermediaries such as merchants, distributors and traders play in the market?
Far from being mere profiteers, these intermediaries play an essential role in the division of labor.
Without them, society as a whole could not function.
In his essay what Is Seen and what Is Not, Chapter six, Intermediaries, Friedrich Bastiat addressed the profound misunderstanding concerning the role of intermediaries that prevailed in his day, particularly among socialists. Intermediaries were often dismissed as profiteers and speculators. Some socialists even advocated abolishing these professions.
Socialists accuse them of interposing between production and consumption to extort from both without giving anything in return, while favoring a public and collective organization of the management and distribution of economic resources.
The alternatives to Market Intermediaries in defense of intermediaries or so called middlemen, Bastiat wrote.
[00:05:57] Speaker A: When the hungry stomach is at Paris and the corn which can satisfy it is at Odessa, the suffering cannot cease till the corn is brought into contact with the stomach. There are three means by which this contact may be first, the famished men may go themselves and fetch the corn. Second, they may leave this task to those to whose trade it belongs. Third, they may club together and give the office in charge to public functionaries.
As Bastiat perfectly describes in this chapter, it is quite obvious that the first option is never the one chosen by individuals simply because they have neither the time nor the means nor the knowledge necessary to know where to find the cheapest, highest quality and most easily transportable wheat on the international market. He continued, For 36 million citizens to go and fetch the corn they want from Odessa in Ukraine is a manifest impossibility.
This leaves two either let the market take care of this task or entrust it to civil servants who are oblivious to the reality of economic calculation, profits and losses. Letting the government handle this task would inevitably lead to disaster. According to Bastiat, it would require substantial tax increases and the hiring of many civil servants to manage such an enterprise.
True to his thinking, Bastiat mentions two unseen and immediate problems that would arise from such an corruption, injustice, abuse and impoverishment of the population.
The population would be unable to make alternative, more productive uses of its capital and would have to rely on a suboptimal resource distribution system because it would not be guided by self interest and the pursuit of profit.
Finally, he points out that it is impossible for the state to manage all the information necessary to distribute wheat to a country like France, which had a population of 36 million in 1850.
[00:07:56] Speaker A: They overlook the fact that society, free of regulation, is a true association far superior to any of those that proceed from their fertile imaginations on these last points. Bastiat was a pioneering economist who, a century before Ludwig von Mises and Friedrich Hayek, was already criticizing socialism and the dangers of centralizing economic decisions on logical grounds. He pointed out the impossibility of economic calculation due to the dispersion of knowledge in society even before the Austrians. He understood the crucial role of knowledge and the impossibility for anyone, even a genius, to know everything at all times and in all circumstances.
He also recognized that those who refused to admit their own ignorance posed a certain danger to others.
Bastiat concludes this chapter with his famous sentence about the socialists of his.
[00:08:54] Speaker A: The more we examine these advanced schools, the more do we become convinced that there is but one thing at the root of ignorance Proclaiming itself infallible and claiming despotism in the name of this infallibility.
The role of intermediaries is what we don't see.
That leaves the second letting individuals organize themselves freely in accordance with the freedom of transaction so dear to Bashtyot.
[00:09:23] Speaker A: At all times in all countries, and especially when they are freer, more enlightened, and more experienced. When men have voluntarily chosen the second option, free association, I admit that this is enough to tip the balance in my eyes. My mind refuses to accept that humanity as a whole is mistaken about something that affects them so closely.
In a free market, intermediaries facilitate trade and provide services to consumers by performing the distribution stages that consumers cannot perform themselves.
Yes, intermediaries are paid, sometimes very handsomely. Their compensation reflects their real contributions in terms of services.
In other words, when we buy a consumer good, we pay for the intermediary's work on our behalf. Purchasing from producers, investing in capital, transportation, logistics and storage, and the time, labor and risk associated with these activities.
As Bastiat writes, consumers are in a way obligated to reimburse commerce expenses because these expenses are advances that entrepreneurs make based on projected future profitability.
[00:10:37] Speaker A: Commerce, I say, is led by its own interests. To study the seasons, to give daily statements of the state of the crops, to receive information from every part of the globe, to foresee, wants to take precautions beforehand.
Intermediaries play a crucial role in the division of labor in the market.
By specializing in the intermediation between producers and consumers, they allow the producers to focus on cultivation and production and allow the consumers to devote themselves to other activities. As always, the division of labor frees up time and energy.
These increasingly complex investments and production processes allow individuals to continually increase their wealth. Bastiat's social harmony implies three freedom of transaction, property rights, and respect for individuality.
[00:11:35] Speaker A: The competition which they create amongst each other leads them, no less irresistibly, to cause the consumers to partake of the profits of those realized savings.
In this chapter of what Is Seen and what Is Not Seen, Bastiat reminds us that through competition, intermediaries are responsible for offering the highest quality services at the cheapest prices. They play an essential role in the division of labor and coordination between individuals. In a free market.
They are the invisible coordinators who allow people to pursue their goals without wasting time on activities that don't add value.
The profit made by intermediaries is therefore normal because their services contain in themselves the principle of remuneration.
This remuneration, as defined by Bastiat, is the reward for Their social utility, according to Bastiat's pure vision of value competition, ensures that this reward remains proportionate to the usefulness of the service provided to the individual as he develops it in his unfortunately unfinished masterwork, Economic Harmonies.
One of the craziest things about getting a bitcoin backed loan with Leden IO is that you can basically get money in a day. In fact, if you're really on it, you might get it the same day. Their turnaround is ridiculous. I know this personally because I did it to make a large purchase within the last year or so. I've used them off and home for a number of years now. I've really loved the service. I really kind of trust the team. I like the guys that made the company and they pass all my big red flag issues with a lot of these companies because they have proof of reserves, they survived a bear market, they do open books and all the details about the loan and the contract and the length and the ability to refinance, all that stuff is really easy. It's really simple. And I don't know, it just makes getting a loan not a nightmare. Like, I don't want to be in debt a whole lot, but when I do get a loan, I don't think I'm ever going to go the traditional route again. And just so you know, I have a link that actually gets you a discount on the interest rate and depending on the time or the size of a loan, that can make a huge difference. So don't forget to add that to your bookmarks. I bet you know where to find the link.
All right, so I thought this was a great little piece and I huge fan of Bastiat and.
[00:13:58] Speaker A: All sorts of writing and theory that Bastiat has explored and pioneered.
But like I said at the beginning, I wanted to hit this piece and I don't remember if somebody, I think one of the audio notes sent it to me like maybe like TK or somebody. But thank you to whoever it was that recommended this or maybe, maybe it was Michael Matliff, I don't know. He has done stuff with Mises, so that came to mind. But regardless, whoever it was, if you if it was an audio or not, thank you. The immediate, immediate thing that came to mind when I was reading this, and honestly when I looked at the title, is how we think about and treat platforms and network owners. The Amazons, the Uber, the Twitter, the Facebook.
I think it's safe to say that the platforms that these network owners who profit from the fact that they build a good service, but then they control the network through which that service can be offered, are kind of universally hated, even among quote unquote free market people. You know, this is, this is the, all discussion about the algorithm and censorship and shadow banning. The level of control and surveillance and subjective abuse of the system causes so much pain and frustration to the user or the consumer. And then of course we have banks, the ultimate of the control and abuse intermediaries.
But the biggest problem of the idea that we're just going to get rid of the banks or we're going to get rid of the platforms, or we're going to get rid of the Ubers and Amazons of the world is just like saying we're going to get rid of retail stores and everybody who's hungry is going to fly halfway around the world to find the place that's currently at this very moment growing corn.
Which by the way is totally different parts of the planet at different times of the year. That's not gonna happen because it doesn't make any sense because society cannot exist without the job of those intermediaries. And this is one of those things. It's like, it's why people are always like, oh, LSPs are centralized and lightning is hub and spoke. So it's way too centralized and it's gonna, it's gonna fail or it doesn't solve anything. We're not trying to fix banks, we're trying to get rid of banks.
Like, yeah, I'm sorry, but that's stupid.
Like you're, you're literally never. The purpose has nothing to do with getting rid of intermediaries. It's about removing the control from intermediaries. It's about making them, it's about isolating them down to the very thing, the very purpose and service that they actually perform without the power to abuse or corrupt.
That's the point of fixing networks. This is exactly why peer to peer without servers doesn't work. Or more importantly, that it's always beaten by something that's, that's centralized and very curated. It's very simple. It's a very simple reason. Because it's worth it. It's worth it. It's just a better experience.
It comes with trade offs and costs though. The very reason we need the Twitters and the banks and the intermediaries of the world is the very same reason why you don't want to host Twitter at home. Why even so, few people who use the Bitcoin network actually run a full node. That could not be a more perfect example of Something that's free to do that doesn't cost a lot, it can be done on very cheap hardware. And that has a very ideological and crucial meaning to what you are doing. You get a lot of privacy, you get a lot of security in running and using your own node. And there's nothing stopping practically anyone who's listening to this podcast from running their own node and using their own node. And I guarantee you day after day, 90% of the people listening to this podcast rail about how we gotta get rid of the banks and we gotta get rid of intermediaries and we gotta screw the algorithm and all of this stuff. But I bet not 90% of the people who listen to this show run a node. If it is 90%, then holy shit, I'm doing a really, really good job. But I bet it's not. You couldn't have a more perfect example of performing the function of intermediary in the lowest. Like we're not talking about hosting a freaking retail store and owning literal land and having an investment and taking this huge risk on having products and services on the floor that you're not even sure if people are going to purchase or not. And you've already paid for them upfront and you have to clear them off your shelves if you find out that you're wrong or that you have to know and suspect exactly how much corn you want to buy. And if you over purchase, you're going to have to throw a ton of it away and then figure out what price to charge for it so that you're actually meaningfully competitive in the market and people aren't just like, why is your corn so freaking expensive? And figure out the logistics of getting it from one corner of the earth during the winter and another corner of the earth during the summer. Like we're talking about none of that, none of that complexity. Literally, like it could not be. We're talking, we're talking about like if the scale is from 1 to 10,000, on the difficulty of removing your intermediary and not having to trust anyone and doing this job entirely yourself, then a retail store with, you know, manufacturer like, like the whatever, whatever you want to call like the worst possible scenario where you're having a full on investment. There's no reverse, everything's a sunk cost, et cetera. You've got like the 10,000 more running. A Bitcoin node is like a number seven. If we can't get everyone to run that for themselves just to. Not just so that they are their own intermediary, they're doing the job and that's. They don't even have to leave their house to do this, then there is no world without intermediaries.
0, 0 chance. Because literally everyone who doesn't run a node is just using other people's nodes as intermediaries.
But why is that better?
Why is that actually a more optimal scenario?
Because we've separated the job, the verification, the custody, the keys, the identity, the actual provision of the service from any individual intermediary. If you're connecting to Mynode to find out your Bitcoin balance and you know, download blocks and stuff. I'm not your custodian, I don't have your keys, I don't. I'm. I barely do anything. You trust me? Almost none at all. Because you're also connecting to a bunch of other nodes at the same time who are literally performing the exact same function at the exact same arm, arm's length, degree of trust. And there's very little damage that we could even do by attempting to lie to you. And there's almost nothing to gain if we did. It's not a world where we got rid of intermediaries, it's a world where we've detached the service, the function that you get from it, from any particular intermediary. It would be as if Amazon was actually run by anyone who wanted to host the Amazon index rather than only Amazon closed sourced and rate limited so that nobody else could access it and only Amazon had control.
That's the difference and that's what we need to fix. And this is also why I think the being scared of intermediaries or trying to get rid of banks is such a lost cause. It's a completely. It's a literal wild goose chase. It doesn't. It's not a world that exists. It has nothing to do with reality. It has nothing to do with a functioning society. You need intermediaries. The question is how do you make your business bank serve the function of transmitting payments without it being a custodian and without it being able to see where you're paying or who you're paying to? How do you separate the service and the value and the control from the intermediary's job? And you make the intermediary just an intermediary, not an owner, not a controller, but simply a facilitator and nothing more. And if they stop facilitating, then we can simply switch to someone else and there's no resistance, there's no great barrier, there's no enormous cost to exit. It is just move from one Go to the other. Because one stopped facilitating and the other one now is that is the world that we have to get to. And that's also why serve. We can't be afraid of servers because the Internet only works because of servers, because of the few people who are willing to have uptime on their networks. And this is one of the things that I think peer to peer and like and decentralized tech completely misses is that we. It's not about.
I really think it's a dumb idea to try to get rid of all servers, to try to get rid of all, have everybody entirely peer to peer and everybody hosting everything all 100% themselves. Like, I do think there's an architecture where that's almost workable, but I think it's going to work a hundred times better if you have servers in the mix. The question is how you can you separate servers from the control of the information? How can you make it so the information is verifiable? The information can be delivered with or without any particular server, with any server that you choose. How can we make it so that we own the information with or without the server? How can we lower the barrier to entry for someone being a server? How can we make being a server as easy as running a bitcoin node? You just install the software and voila, you can be a surveyor.
That's the solution, that's the target, is how do we separate the underlying information integrity, the underlying ability to find and build a network. This is exactly why the things like pubkey, why Nostr, why Keat and the way that we're designing and thinking about Pear Drive, I think is actually the direction to go. Because Nostr doesn't shun servers, it turns them into relays. Now, I do think it's got a problem with trying to figuring out how to monetize them, but it has separated the integrity of the information from the person who relays it to you. And that is a critical step because I can get a note that my brother Agoris view on Noster has noted, has tweeted out or note done, done a note on Noster. I don't know what the hell Nosted it. I can get it from you, I can get it from Primal Relay, I can get it from Amethyst, I can get it from Thomas. Doesn't matter where I get it from, who I get it from. I can get it from Divine Video. I know it's his because it's signed with his public key. We have separated the integrity of the data itself from the Intermediary that is delivering it to us. This is exactly what lightning does. Everybody who says that lightning centralized because people will use LSPs, or that it's too centralized because it's just hub and spoke and it's not decentralized enough. You're not going to undo the fact that everything in the universe evolves into a Pareto distribution. Like it's going to be a Pareto distribution. I'm sorry, but you're not arguing with Bitcoin or the lightning network or crypto or any stupid thing, the Internet. You're not arguing with any of that. You're literally arguing with some sort of bizarre fundamental association of all things in the universe. The Pareto distribution is everywhere. And yes, it is extremely likely that we'll see, we will see the exact same sort of behavior and distributions and level of flows through certain nodes on the lightning network, because that's just kind of something that freely associating networks do. But guess what? None of those nodes control the Bitcoin. They are intermediaries without being custodians.
They are literally, if you are running a lightning node, you are the future of a bank. You are a liquidity provider on an open global payments network who facilitates transactions for any and all people who go through your node or need your liquidity. You do so where you do not know who it is that you are facilitating a payment for or where that payment is going to, and you are getting paid for that service as an intermediary without any ability to meaningfully abuse, corrupt or stop those transactions from occurring. Because if somebody, because if you stop facilitating that transaction, you simply become a hole in the network. You just become a bug that people have to route around using one of the intermediaries that does do a good job. And then you stop getting paid. So you suck. You're a crappy lightning node. Why do you even have a lightning node? That is the solution. Lightning network is literally the solution to intermediaries. NOSTR is the solution to intermediaries. Pub key and local signing and having your key and your network to be able to find your people separated to stay connected to your network outside of the intermediary who delivers it to you. The dht, that is a solution to intermediaries. Bitcoin, that is a solution to intermediaries. And it doesn't get rid of rid of them. It puts them in their proper place and isolates the one very critical job that they do to only that job and creates protocols for assessing and verifying everything else that they are delivering. Outside of needing them. And this is exactly why pubkey, Nostr and the Pear stack, that's why these things interest me so much, is because I think they all in their own little way are trying to solve this same issue. Is that okay, if we are trying to do that, if we're not exactly trying to get rid of servers, but we're trying to get rid of the server's control, the server's kind of godlike capacity to own and control all the networks so that the cost of exit is literally on the user rather than the intermediary, that the intermediary literally owns the network that the users build. That's crazy. That is a huge flaw in how the design works. And it turns the intermediary, which is supposed to be a facilitator, into a literal godlike owner of the entire structure of the Capitol. And that is not optimal because you immediately turn. The bigger that gets, the more you have a principal agent problem where it's good for them to do things that aren't good for the consumer because they, the very fact that they just have so many users makes them an incredible facilitator without actually properly doing the job of being a facilitator simply because they, they're living off basically the, the shoulders of the network value itself. In other words, every intermediary that is actually controlling the network that they are intermediating for, if they grow big enough, they will become corrupt abusers in the absence of the ability to easily establish or bootstrap alternative networks. And this is what I think, I think it's pubkey because pubkey has like the home server stuff and their, their like Nexus protocol. It's kind of the back end of a lot of what they do. And one of the things they talk about is credible exit is that essentially you always, you want to be able to design those, those underlying tools so that it's easy for anyone to just walk away with their information and just like think about how many intermediaries have popped up and tried to prevent this. Like, how easy is it to export your stuff from medium and just have it anywhere that you want it? How easy is it to export your bookmarks and your entire Twitter feed so that it's with you in a meaningful sense or everything that you've interacted with or wanted to save off of Twitter? I find myself just the utter pain and just endless frustrations of trying to do anything with digging through my history of anything social. It just, it might as well just not be there. And the amount of great Stuff that I try to save that I find that I think is really useful but just disappears. It just. It's never. It's like, it ought to be this great collection, this thing that always provides me with some piece of content or some piece of data related to the things that I'm looking into or looking for. And it all. All just seems so disconnected and so distant and so.
So siloed from each other and from all of the other things that I'm doing. And every single time I touch one of these networks or what, I can't tell you how many times I've started this, like, attempt to, like, save bookmarks and articles and. And links to stuff. And I start creating this database in some app like Notion or Pocket or something. I do this for a year because I kind of get in a workflow that I think works really well and then find out that you can't really get it out of there, that it's stuck on the platform and if I'm not using their subscription to sync between the devices, I can't get it from my phone to my computer. Or I found out, find out that it's only on Android and It's not on iOS because of some stupid thing. Or they can't. You can't pay for the service inside of it because they don't want to share it with Apple because they control the platform, they're going to tell you everything that you can do about it. Inevitably there's some sort of a stupid restriction or limitation or some way where I find out I don't actually own the information. This is. This is the one that.
And I've talked about this a couple times on the show, but this is the one that, like Notion just utterly just made me so mad. And I still have not gone back. I don't even. I don't even think about it until I'm talking about it on the show.
But it made me so. It pissed me off so much. I have a couple of.
[00:32:03] Speaker A: Like, I guess, spreadsheets, tables, you know, whatever you want to call it, of links that I saved inside of Notion for years because I'd found a cool way to make it part of my workflow, to easily save stuff.
And then when I finally was actually moving away from Notion, I wanted to export a ton of my notes and pull them into Obsidian, which is one of the ones. I'm largely used for this sort of thing now, even though it's not really great for bookmarks, but I use it for my notes and everything because it is Something that I can take. Well, I've. I've switched over almost entirely to dot IN the like notes because Obsidian logsec, COT Editor. Like, just a bunch of different things that I use. Can I could just jump them in and out. I love it. I love it because all my stuff is universal reversal. My. I finally feel like I have this collection of notes and thoughts and projects and writing and guides and troubleshooting breakdowns of. After I've worked on some stupid thing for a really, really long time, I get LLMs to, you know, write me a thorough breakdown of all the things I tried, why this worked, what, what this changed, what didn't work, and then what was ultimately the solution. And because of a handful of the apps I use, it's. It's finally free. Those notes are free from the service and the application, the software that I'm using it in. But so much of the web, so much of software has literally gone the opposite direction. If you write an article on their platform, you can't even export it, you know, like, it's just. It's now here on our platform and if you want it, you have to come get it. But Notion was the one that just infuriated me because I had such a collection with like tags and like category. Like, I'd spent time going through the spreadsheets to have to really help, like pull information together from some of the links. It's the closest I had to like a good database. And literally since I stopped using it, I've never actually found a replacement. So my collecting of links and stuff just now sucks. But I'm not going to go back. Notion.
But when I. I finally, when I was like exporting lets you export the whole spreadsheet. So I thought I was just gonna get like a big CSV with all my links and all the data and tags and everything. And I find out that if you have an HTML link in it. So if I link to Twitter or I link to Medium or I link to, I don't know, whatever, just anywhere on the Internet. Bitcoin, audible.com When I export the spreadsheet itself, it creates a link of notion.
So.
[00:34:38] Speaker A: And like some just gibberish, you know, a hash or something that actually when you click on the link, it takes you to the Notion page, to that place in the spreadsheet so you can see the link, which means I don't have the link. Notion has the link and I cannot export it, even though it's right there in the spreadsheet. And obviously they don't Change it in the spreadsheet. It's not a Notion link. The link is to a freaking place on the web. It literally altered the data so that my spreadsheet is only useful as long as Notion has their servers up and I cannot get the link otherwise.
Oh my God, I wanted to choke somebody. I've spent hundreds of hours saving those links and putting all of that stuff together and I am going to go back and get it. But, but it's just, it's, it's hard. It's going to be something that I have to figure out and it's like they're reaching into my life and saying you're going to be forced to come back to us to get all of the time, invest and investment that you had. It's very much like saying I want to close my lightning channel and then find out that all my bitcoin are just on their servers and when I close my channel I just don't have my funds and then I have to open my channel back up with them to get my funds back and then I can spend it only if it's through them. My time and investment went to their benefit, not mine. In fact, somebody just the other day in the dank bank in the key meme room, I thought had something that was really relevant to this and I thought it was hilarious.
I think it was a Medium article, but it's a screenshot of somebody went to a Medium article and the article is titled how the Web has or why the Web has become Unreadable. But then it's like grayed out. And just as the article starts there's a big pop up over it. So you can't read. Read it and it says you've, you've read the last of your free thing in Medium. You have to subscribe, punch in your email.
And I just thought it's a perfect like, like you don't even have to read the article. They demonstrate it. They were like, like the article could have been empty because they just knew that that's what was going to happen. But I genuinely believe that the problem with the Internet that the major flaw that we have instituted that is actually fixable is the fact that. And that we're not now feeling the heavy cost of is actually the same one that we had in the kind of the record and music like distribution networks and film and television and these things is that the content creators aren't the content owners.
We have allowed intermediaries to take control of the content itself, of the production of the actual, of the actual value underlying it. Because the value is so much more valuable with the network. You know, Audible, I love Audible because it's a great network and it does a fantastic job. It gets access to tons of different people. It's a huge market. And if you want to sell an audiobook, you're going to get way more sales on Audible than you will anywhere else, literally. But do you know who gets the largest split between the author, the narrator, what the split is between the author, the narrator and the platform.
The platform takes 60% and the author and the narrator split the other 40.
And the only reason they are able to get away with that is because they control the network. They control the payments, they control the connection between the author and the listener. They are no longer facilitators, they are owners. And I don't really hate them for it. It's a technological problem and it makes no sense for someone to not take advantage or to.
To. To basically use the fact that they have this valuable network to actually make other great stuff. But that means that they will charge and take as much as they can out of that network, obtain as much value as they can from the ownership of that network before people just get so infuriated that they just throw their hands up and leave that it's worth it to just have a network that's a hundredth the size or a thousandth of the size simply because you don't have to share or deal with the pain and idiocies of the other platform. Before I hit my final thought, I just want to shout out to Leden IO for supporting the show and for offering a really great financial service for bitcoiners that is actually built the way it ought to be for bitcoiners. And don't forget that I have a discount with the interest rate right down in the show notes. A shout out to PubKey and synonym and what they are building for re decentralizing the web. I'm actually working on a vibe coding project that I want to share because I think their platform is actually really really cool for this. So I'll let you know. Stay tuned. A shout out to Gitchroma Co.
They do really great stuff on Red Hot lighthealth. I'm. I'm a huge fan. My two things in particular are the nightshade glasses and then the skylight Mini. If you are trying to get your hormones, your energy levels, your light health in order, these guys are a no brainer and they've got some really awesome discounts right now for holidays and lastly, the HRF and the Financial Freedom Report and the Oslo Freedom Forum that they put on the incredible work that they do.
Their, their newsletter is one of my most valuable for keeping up with the fight for freedom around the world. And then all of the tools and stories to of how to fight against it. Check them all out. Links, details, goodies, discounts, all in the show notes. But imagine if you could connect to Audible and you could pay your facilitator, you could pay the host of the content and it could be anyone, it could be like a Nostra relay or any peer and the content itself was signed by a public key and therefore the payment specifically went to to that person and to that facilitator specifically for offering up that service or that front end to you, or curating that book or that audiobook or that music or that podcast or that product or service, curating it for you in such a way that you like the experience, that it actually benefited you for them to be your intermediary and you simply paid them for the value of that service.
But if they ever stop providing that service or their service sucks, your network, your content, your Bitcoin, your feed, your audio, your music, your whatever goes with you, not with the intermediary.
That is, the solution is to isolate the job of the intermediary explicitly to the facilitating of the connection, not the ownership of the connection. Because that is a balanced division of labor without the principal agent problem. A society without intermediaries is just not a society, but a society where intermediaries control all of the network and all of the content and all of the value that flow through them is a society with a lot of problems, but one where you can separate the jobs, you can separate the content, the network, the people and the capital from the role of the intermediary itself is one that can correct all of these problems and put the disincentive back in its place so that the intermediary just wants to facilitate payments and content and music and storage and whatever else. And if it stops doing that, it dies. And the cost for everyone to exit and go to any other that they wish is of barely any consequence.
That I think is what we should build for. We should not obsolete intermediaries. We should obsolete any individual intermediary from having control. And I think when we find the right recipe, there is no telling what the market builds on top of that.
So with that, don't forget to subscribe to Bitcoin Audible. I am Guy Swan, and until next time, that's my two cents.
[00:43:29] Speaker A: If the natural tendencies of mankind are so bad that it is not safe to permit people to be free.
How is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they belong believe that they themselves are made of a finer clay than the rest of mankind?
Friedrich Bastiat.
