21 Futures #13 — Are We, or Are We Not? — Alex Gurevich

That's, that's great to hear. Yeah, I think this book has been like a car that just needed gas. It was like this book is sitting there ready to be filled up with all these awesome ideas that the whole community has. And a lot of the other authors have said the same. It's like, well, sort of the idea was the easy part, you know, I have I have tons of them and we, we are thinking about this all the time. So yeah, it's, um, interesting to hear that was the same case. Uh, yeah. Tell us a bit more about your path into Bitcoin or your sort of, uh, interaction with it.

Well, as I've mentioned, my background is I have a PhD in mathematics and I've been a Wall Street investor for now quite a bit, almost embarrassingly long time, over 25 years.

Wow.

So I worked for JP Morgan for a while and then I moved, moving from client trading to eventually managing a proprietary portfolio then. And then since then running, then I left and was doing various things on my own, including for the last several years running my own hedge fund, Haunti Investments. I, and for those people who don't, for viewers who don't know about global macro trading, What you really do, you make directional bets on various assets around the world, currencies, commodities. It could be stocks too, but it's not necessarily focused on stocks. I'm not focused on stocks. I'm more focused on interest rates and currencies and commodities. But one of the most important things for a macro trader is to understand the interlink of all various assets. On a given day, I'm caring about inflation numbers. For example, this morning I care about inflation numbers from England and UK, right? I'm also caring about Federal Reserve this afternoon, but also news about property markets in China, copper production in Chile. All of this becomes part of one picture. I started to be interested in Bitcoin in 2015, even though I've heard of it prior. So people into Bitcoin know that it had a big price correction from 2014 to 2015, and people were calling it being a bubble. And then when I started to look at it, at the charts, just as a purely as a financial person, not at all as a technical, technical person, I realized that not trading and not behaving at all like a bubble. It's behaving and trading as a precious metal. Yeah. Just with more compressed timeframes. I wrote an article, I think it was in 2017, called In Quest for Digital Gold. I actually don't know when the digital gold term was first introduced. I'm not claiming that I was the first one, but I didn't know it before, and I was one of the people who popularized this term. I said, and in this article I discussed how gold became gold, and I was arguing how can potentially Bitcoin become digital gold. And to me, that was the interesting part. We can go, I've talked on other media about like why people are confusing sometimes the bugs and the, and the features on Bitcoin. Like for example, transactions are not so easy to execute. People think of it as a bug. I think of it as a feature for store of value. It's never been meant to be a medium of exchange, something you pay for coffee with. And We can go into those details, but I've just also, it's volatility against dollar. For example, one of the points I've been like pounding my fist in the media about is you wanted something that does not change in price in dollars, you would have stablecoins or just dollars. The whole point of Bitcoin has to be volatile against dollars so it would actually act as dollar.

I'm sure our listeners will have lots to say on this and they probably know more about it than me cuz you know, I'm quite, um, I'm a fiction guy really first and a Bitcoin guy second. So, you know, I'm quite new to all this, but yeah, a very interesting time to be talking about Bitcoin assets and all this financial stuff. And yeah, one of the things is I think it helps people learn about what money is. I mean, that's not really taught in a lot of educational systems, and unless you really go after it and study it, Money's just the, the notes that are in your wallet to most people and the, the plastic credit cards that you do buy coffee with. So it, it's a, it's a big rabbit hole to go into, but one which is beneficial, I think, for people to, to know about.

It's complex. One thing I can say, like, is I've been doing it all my life and I still don't fully understand it.

That's good to know. 'Cause yeah, I haven't been doing it all my life and I understand very little. But, uh, yeah, moving on. Tell us more about your writing. So you said you're a sci-fi writer and a nonfiction writer. What are you writing at the moment? Anything?

So I,

oh my God.

Yes, I was, I was writing in parallel, uh, investment writing. I have 2 investment books out and the last one, The Trades of March 2020, was actually a Wall Street Journal bestseller in which I discussed or wrote about financial history of financial markets. descending into the pandemic crisis and like, okay, day by day, kind of a blow-by-blow story of the crisis of beginning of the pandemic. I wrote the previous book, which was more like a professional trading guide, The Next Perfect Trade. I've also written a bunch of articles like the one I mentioned about digital gold for Yahoo Finance and just general information for my investors. So it's been a lot of investment writing for me. Uh, but I, since I was a teenager, I had an absolute passion for speculative fiction, fantasy and science fiction. That's 90% of what I read. I read other things, but predominantly it's either read finance books or research reports, or I read speculative fiction. Yeah.

I can see why this is the right marriage of, of everything. All of your—

Yeah, it's, it's a right marriage. So this is my passion, right? Yeah. So I, and, uh, I always had ideas in my head, like this example, for example, ideas about having a Bitcoin story. I had a multitude of ideas since I was again in high school. And at some point when I was a little later in my life, I started to decide to write them down. I had to master writing in English as it is my second language. I had to take a bunch of writing classes to do that, but I just kind of slowly persevered and over maybe a decade got myself from a beginning writer to a person who can write publishable stuff.

Yeah, that's, that's great to hear cuz you know, that's what I do in my professional work as well is help, um, you know, second language writers of English. And that's great to hear that, you know, there, if there are people listening out there who want to who think, you know, am I good enough? Is my English good enough? Could I be published? Yes. The answer's yes. Like, take classes, learn, do your best, keep trying. And there's absolutely no reason why, you know, anyone's stories and voices shouldn't be heard. Yeah, it's been another great feature of the book. I think we've got authors from, I don't know if I can say all continents, but Certainly a lot of different countries and a lot of different first languages. And, uh, we will be translating the book into various languages, I think. Not sure when that will be, but it will come out in English first.

Good to share. Yes.

Uh, yeah. So your story starts with this conversation, a coded conversation, we, we could say. Um, between friends. Is that something that you're interested in, the security of digital conversations? Do we need to worry more about our security of what we are saying and, uh, recording?

Well, I do worry about this a lot. I generally have made a decision That I have to live my life as if every electronic form of communication I'm making is publicly available, like it's a matter of public information. We're all enjoying mostly security by obscurity. If someone does want to hack us, they probably can get in. Yeah. If there's a concentrated attack by a highly sophisticated agent, they probably can get to any form of digital communication we have and either record it The only hope is that some things are just not recorded, then they probably cannot get to it, right? But, uh, yeah.

Sorry, go ahead.

Uh, my biggest fear is, is kind of going forward, kind of the fear that of complete loss of digital trust. And that is what my story is about. The world in which with rise of AI, you actually don't know who you're talking to. You don't know if you're talking, if you're Zooming with a friend, if it's a friend or if it's just an agent posing like a generative intelligence agent posing as your friend. If you're getting an email, you don't know who you're getting. I'm already like always extremely cautious when I'm getting an email with, I'm, I don't know who is this email from, even if it looks totally legit.

Um, true. I mean, yeah, there's so many things that we are always looking out for, just little visual signs and Linguistic signs and, and everything else that, yeah, it can be quite tiring to, to keep up with. And there's a tie-in with, with Bitcoin too, of the sort of, you know, verify, don't trust, isn't it? It's like, you know, it, it, we may lose, lose all kinds of trust in communications.

Well, the thing with Bitcoin is that it's a little bit, has a little bit of characteristics of having cash in the wallet. Because you think your Bitcoin is secure, but for example, if you're having a USB with your password, that's equivalent and you're carrying it with you. You, it's like you're carrying cash in the wallet. If you are car— if you just know, like for example, a little poetic passage, which is your password, which some people do, that's also you're carrying something in your head. So you could be coerced somehow or I don't know in which way, but it could be found out. And then it's very hard to reverse any transaction if someone hack, social engineers or hacks into your accounts and takes your cryptocurrencies. So to me, this is just, uh, it's kind of replacing one type of insecurity about the world that's being replaced with another type of insecurity. Yeah,

there's definitely a lot of challenges that sort of, um, Face all of this and face us. But again, I'm sure our listeners will have a lot to chip in with there on the security aspect. Uh, yeah. So in, in this, uh, story, Are We or Are We Not, in this world you've created, there's been an insurrection, um, similar almost to what happened in, in real life. Yeah. Uh, that leads to the fall of the White House. What role do you see finance playing in the fall of politicians or the fall of systems? Is it gonna play a key role?

Well, historically, um, historically when economic woes lead to falls of financial systems, I mean, it could go from either really extreme or to kind of obscure, but could still, like, for example, in the middle of 19th century, British government almost fell. The Tory Party almost fell because of the trade imbalance with China. Who knows about that, right? Yeah. But we all know that French Revolution was followed some economic woes. Same with Russian Revolution. The Soviet Revolution also followed First World War and related suffering. So when people are feeling unsure and they're not, don't have economic security, they start being restive. And, but I also wanted to overlay it with the idea of what we're seeing right now, that with the loss of digital trust, there is no even consensus in the society. Who is in charge. We already experienced it a little bit when one side is saying they won the election and the other side is saying they won the election. I'm not making any political judgment right now. I'm just saying that that's what we observed. That's objective fact. We had objective disagreement about who objectively, we saw the disagreement about who won the election, something which is really kind of new to the society. But then when, if you imagine that all news are just All news outlets, all sorts of information are compromised, then I can imagine the future. People cannot even agree who is the president, and then that is kind of a recipe for violence.

Sure. And I mean, like with many things, there's no hard line. There's no tipping point, which is the same for everyone. How these movements spread and develop is, is gonna be Something, I don't know, we're all keeping our eye on, I suppose, but it seems to be something which is perhaps coming closer. Right. Yeah. So let's listen to a bit of your story in a minute. First, one more question. Without giving away the ending of the story, there is a contract used to access funds. Um, it's a special kind of contract. What led you to explore this?

Well, it goes back to security. I'm thinking of like the old spy movies that sometimes they have like a comb and they break the comb and 2 people hold like 2 pieces of the comb and when it matches, they know that it's the same, that it comes from the right person. Or like you tear like a $50, $100 bill and then you have 2 parts of it and they have to match exactly. So I was thinking of people adding layers of security by effectively creating escrows, which could be both related to currency or just fulfillment of contracts. I think that there might be a lot of future, which is not all negative. There could be some positive stuff about attaching security to various contracts, which are very unique. For example, in this case, again, without giving it away, the contract is something very unique to these specific people involved, so they could attach security to this contract and kind of use it as a comb that matches to access the funds. So to me, this is a lot of, um, possible future in the event when digital trust dissolves.

Yeah, really interesting stuff. And, um, definitely recommend to everyone out there listening that you check out this story if you're interested in security and this kind of digital trust issue. Uh, yeah, there's a few stories in the book which probably touch on that, but Alex's definitely features that as a main aspect. Let's hear some of it. Um, over to you, Alex. Uh, could you treat our listeners to a few lines from, uh, from your— Great story.

Great. I'm delighted to. I will read from the middle of the story so I don't give away, give away much of the plot. It's, um, just the background as the person just needs to go to another city.

Okay. Take it away.

Rhonda scooped a few gold and silver coins and a USB drive from the safe, leaving the green folder untouched. Driving across the country was not an option. She'd never dare to plug in her car at an unknown charging station. Trying to search for airplane tickets on the internet was useless as well. The Malberts were now aware that she was in the market for air travel. She would just run into more scams like fake Emily leading her to Associated Airlines website. Rhonda had to go directly to the airport kiosk. There was nowhere safe to leave her car, so she asked her neighbor to give her a ride in exchange for permission to harvest produce. From Rhonda's porch garden interruptions. It took Rhonda hours to make it through the ticketing line at the airport. The clerk had a mass spectrometer to verify her metal coins, but still wouldn't accept them. He sounded apologetic. Sorry, I can't be sure of the price of gold now. Normally, we're allowed to take some risk, but these days, everyone is talking about the government selling precious metals. To make up for the lack of Bitcoin reserves. All the quotes we get are like 10 times apart. Making a Bitcoin transfer in public was dangerous. Taking, taking a furtive look around, Rhonda tried to spot anyone who might intercept her transaction. Eventually, she dug into her pouch for her USB. Fortunately, the airport kiosks were still secure. She finally made it to the red-eye after sending the, spending the whole day in the airport. The attendant on the plane did accept a silver coin in exchange for a stale bagel and an overcooked egg. Later, she wished she had skipped the meal. The next morning, Rhonda awoke disheveled and exhausted. Fighting bouts of queasiness, she pushed through the throngs of Pennsylvania Avenue. Entry to the White House was closed. Rhonda contemplated climbing the fence. However, despite what Emily had said, there were in fact a bunch of people on the White House lawn. They wore uniform jackets with security and Secret Service printed on their backs and sported fancy earpieces and shiny name tags. Ronda was reasonably certain these people had nothing to do with the government and would certainly not go anywhere near them with a USB in her belt pouch. Thank you.

Great. Uh, lovely. Really nice. Um, really nice reading there. I wonder what happens next. When is this contract gonna come into play? Check it out in the book. Alex's story will be one of the stories in that book, which as I said, is out in December. Before we go, Alex, do you have a prediction for the future of Bitcoin?

I think the future, as any future is, is still not certain. What I think is happening, has been happening over the last, over a decade, that Bitcoin has been accumulating credentials as digital gold. The longer it lasts, the more ubiquitous and more reliable it becomes. So time works very much in favor of Bitcoin. So for every year that Bitcoin does not collapse and does not get discarded, It gains more and more potential for being omnipresent store of value like gold, at least like gold, or possibly even more omnipresent because there are some features which Bitcoin advantage over gold. So I think that there is very easily the case could be made for somehow it could be banned, or maybe somehow governments attack, will attack the network, or all sorts of problems can arise. And I will, I want to very aware of all those risks. But on the other hand, time works in its favor and, and it's on a path of being more entrenched.

Great. Yeah, time will tell and hopefully we'll be able to use it to buy more than stale bagels and overcooked eggs. Alex, thank you so much for coming on the show. It's been great to talk to you. And yeah, really looking forward to seeing your story in the book alongside all the others.

Well, thank you very much for having me. It was a pleasure.

Great. Um, well, good luck with the rest of your sci-fi and financial writing. And, uh, thanks for coming on the show.

Thank you.

All right. See everybody in the next one.

It was nice to meet you in person, by the way. Thank you. Okay.