Welcome to season 3 of the Public Key podcast! New Season, New Hosts, New Look. Cryptocurrency has woven its way into the tapestry of geopolitical tensions, the evolving landscape of national security and the future of strategic policy making. In this engaging episode, Eitan Danon, Content Marketing Manager at Chainalysis, talks about China, Russia and all things national security with Matthew Pines, Director, Security Advisory at SentinelOne, as they demystify the global tensions and cybersecurity implications.
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Public Key Episode 147: Future-Proofing America: Digital Assets as a Geopolitical Tool
Cryptocurrency has woven its way into the tapestry of geopolitical tensions, the evolving landscape of national security and the future of strategic policy making
In this engaging episode, Eitan Danon, Content Marketing Manager at Chainalysis, talks about China, Russia and all things national security with Matthew Pines, Director, Security Advisory at SentinelOne, as they demystify the global tensions and cybersecurity implications.
The conversation covers the intersection of Bitcoin and AI, the strategic implications for U.S.-China relations, and the evolving cyber landscape, including cyber deterrence and private sector responsibilities.
With insights into national reserves, the role of stablecoin, and even discussions on UAPs and non-human intelligence, this episode has never ending twists landing on global power dynamics and emerging technologies shaping the future.
Quote of the episode
” I have it under credible authority that there are countries that are already acquiring several hundred thousand Bitcoin. Moderate sized, say, Gulf countries” – Matthew Pines (Director, Security Advisory, SentinelOne)
Minute-by-minute episode breakdown
2 | Matt’s journey through startups, government contracts and entrance into Bitcoin
4 | Exploring Bitcoin, AI, and geopolitics with the new Trump administration
7 | China’s global influence through techno authoritarianism
11 | China’s strategy for alternative financial systems and global influence
15 | Global financial interdependence and sanctions in geopolitical conflicts
22 | Cybersecurity challenges and strategic deterrence against China
27 | Factoring in Bitcoin in geopolitical strategy and National Security discussions
33 | Strategic implications of potential Bitcoin reserve and global stablecoin usage
41 | Expectation Value: Matt’s book decrypting AI, and espionage activity in a novel world
43 | UAPs, non-human intelligence, and geopolitical implications for 2025
Related resources
Check out more resources provided by Chainalysis that perfectly complement this episode of the Public Key.
- Website: SentinelOne: World-Leading Cybersecurity. Powered by AI
- Article: A “Global Economic Reordering:” US-China Competition and Bitcoin as Tool of US Statecraft
- Article: Great Power Network Competition & Bitcoin
- Book: Expectation Value
- Blog: 2025 Crypto Crime Report Preview: $2.2 Billion Stolen from Crypto Platforms in 2024, but Hacked Volumes Stagnate Toward Year-End as DPRK Slows Activity Post-July
- YouTube: Chainalysis YouTube page
- Twitter: Chainalysis Twitter: Building trust in blockchain
- Tik Tok: Building trust in #blockchains among people, businesses, and governments.
- Telegram: Chainalysis on Telegram
Speakers on today’s episode
- Eitan Danon **Host** (Content Marketing Manager, Chainalysis)
- Matthew Pines (Director, Security Advisory, SentinelOne)
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Transcripts
Eitan
A welcome to public key. My name is Eitan Danone. I study the intersection of digital assets and geopolitics. I’m here today with my guest Matt pines, who is the director for security advisory at Sentinel one. Matt, welcome to the show. Thanks for having me. It’s great to have you here. I was just saying, you know, we chat often enough that we ought to record this and put it on the internet.
Matt
I know, right? Those, those PETA summits, unfortunately, have not been recorded for for posterity, so we’ll have to make do today.
Eitan
Yeah, that’s great. Well, tell our listeners a little bit about your background. You have something of an eclectic background, including kind of how you got your start and how you got your feet wet in national security work, and then, you know, journey to crypto, Bitcoin, etc, yes.
Matt
So I was a physics nerd. Growing up, I went to a university to study physics. I was also interested in philosophy, so I did two majors there, decided against a PhD, went over to London, did a master’s in philosophy and public policy, stalling essentially came back to the states, got a fellowship at the National Science Foundation while I figured out what I was going to do with my life, and then had a chance run in with a college buddy of mine who was working at a startup that was doing some interesting essentially, like war games or exercises for the government. And they had just won a contract that was putting on the first full scale cyber sort of scenario for the government. So that was the national love exercise in 2012 so I sort of was like, this seems interesting. I was at the end of my fellowship, you know, I’ll get a security clearance. I’ll be able to do some interesting work, you know, get some get some rent paid. So I that sort of got, got me into sort of government consulting, and I grew that my career kind of in that, in that domain, for about 10 plus years, where I supported kind of a range of projects for a number of different agencies. Kind of the through line was sort of assessments of sort of bad case scenarios, sort of exercises, as well as sort of more like analytic assessments of national preparedness. I also did a lot of, like field experiments for emergent technology, sort of operational evaluations for the government and sort of, you know, technology requirements. And then I did a lot of you know stuff towards the end, or in sort of cybersecurity, as CISA, the new agency, was getting stood up, helped think about like, how big sister should be, kind of their force structure, etc. So did a range of policy, technology, kind of exercises, that sort of stuff. You know, I survived a number of different government shutdowns over the years. And so the opportunity came about three and a half years ago to jump into the private sector, where I became director of intelligence at the Krebs Stamos groups, which is a sort of boutique consultancy created by Chris Krebs and Alex Stamos to try to deliver sort of traditional management consulting services, but they integrated geopolitical and cybersecurity risk advisory support. So I had been doing that until Krebs Stamos group was acquired by a publicly traded cybersecurity company called Senator one, and we became Pinnacle one, the strategic advisory group, basically, you know, doing the same sort of work. My role is basically the same, except now we’re a part of this much larger cybersecurity company with a lot of additional capabilities. And so we have been with with Pinnacle one, sorry, with sensible one, for about a little over a year now and then, in parallel, I have had kind of this intellectual, increasingly professional interest in the intersection of Bitcoin and national security. So about four or five years ago, I wrote a first white paper for this then sort of very nascent think tank called the Bitcoin policy institute that looked at sort of the broad, more strategic level questions about Bitcoin and national security. And I’ve sort of leaned more and more into that as Bitcoin has become more of a salient policy topic and sort of macro relevant asset class in the last few years, and obviously now is poised to be potentially even more significant, depending on what the incoming Trump administration does. So I’ve been deeply engaged in sort of policy research, engaged in sort of analysis at that, at that fulcrum of kind of these emerging monetary networks, Bitcoin in particular, dollar based stable coins and and sort of the overall macro and sort of strategic future for the United States in a much more competitive global environment, competing against China over sort of digital network dominance in the 21st century. And so that’s that’s a focus of mine, of mine as well. And I think this convergence of these rapidly changing technology paradigms, sort of increasing geopolitical volatility and uncertainty, is sort of a ripe a right field. So this is where they’re, like, the cyber, the crypto, the geopolitics, the macro. I try to, like, you know, pay attention to as much of that as possible. Yes, that it. I mean, that’s a lot to unpack, but it’s gonna be enough to get us started, you know, yeah, I think, you know, there’s a, there’s a lot of meat on the bone there. Let’s you mentioned the incoming administration, which is nominate.
Eitan
It a focal point, or a czar I’ve seen for artificial intelligence and crypto. So that grouping together of crypto and AI has a lot of wonks and pundits speculating about the implications of emerging tech in general and crypto in particular. So for both on the market side and for policy makers, how do you look at that? How are you viewing that nomination and and kind of the posturing for the you know, at least for the immediate,
Matt
yeah, I think that was a fascinating signal. The fact that David Sacks was designated the AI and crypto czar, you know, indicates, at least at that sort of high level sense of how interconnected these two emerging technology fields are. Because if you just look at the industries, they’re not directly connected. I think there is an interesting, you know, emerging more like economic connection in the energy markets in particular, and there’s more speculative sort of analysis about where, for example, if you do have, say, like AI, agents that are conducting economically meaningful tasks, increasingly at a significant scale, but they can’t get bank accounts, well, sort of, you know, all they need is essentially a crypto, you know, address to be able to to conduct transactions, to be paid for services, to pay for their compute, etc. So there’s certain a speculative, maybe not so speculative projection that that links the two, but I think they they indicate also kind of the geopolitical stakes that the incoming administration perceives are are relevant on these two particular technology areas, right? That there’s a sense that an AI in particular, right, that the US needs to maintain its current dominance and increasingly kind of demarcate the global environment. You know, Friends versus foes and the White House diffusion
Eitan
order recently. I mean, where exactly they are, two out from that? Yeah, yeah.
Matt
So I think that’s that. We’ll see what the income administration does with that. But I think that that’s more of like an embedded, almost sort of structural logic as the US is, is, is trying to, you know, keep its its existing advantages while, while mitigating the potential for Chinese sort of rapid catch up. So, yeah, so that’s interesting. I think on the AI and crypto side, the political layer, obviously, it tells me the fact that that’s not just those two conjoined but also just how much political influence those two different industries have now is a shift, right? I think it was, it was building for a while, but I think you’re seeing a changing political economy inside DC, like the Silicon Valley Tech bros essentially, have a lot more say, right? Whether it’s from the Vivek and the elons of the world to the Peter TEALS of the world, the proper Luckies of the world on the defense side. I think there is a, there was a there was a a building political economy shift, and now it’s sort of manifested, right? And we’ll see what that new coalition looks like. And sort of Trump 2.0 you know what? To what extent is a sort of isolationism versus internationalism, a sort of America first versus kind of, Okay. How do we actually, you know, dominate global markets? This will be an inherent tension, but I think it will be a very different sort of ideological orientation than Trump 1.0 and the new factions at play in this power in this power structure, now that they have power, right? It’ll be just see, like, what do they prioritize? How does it intersect with Casey, like the legacy national security apparatuses? Kind of policy priorities say to contain China to kind of hold the line of the g7 kind of NATO structure around the world? Yeah, open questions in my mind, but I think the aperture is quite wide, wider than it has been in a long time.
Eitan
Awesome. Well, on AI, a lot of attention is being paid to strategic competition between the great powers and the middle powers in recent years, focusing on the chip war supply chains and export controls around the semiconductor. Kind of question you have done a lot of writing. If we take a look specifically at the US China relationship and kind of that layer of competition, which I think frames a lot of analysis these days, how do you see crypto fitting into the Chinese tech stack and the digital Silk Road, especially given the position, the evolving position in the People’s Republic of China, on permissionless crypto projects, and kind of more of an emphasis on permission networks and blockchain, how do you kind of put the puzzle pieces together?
Matt
Yes, so I think on a this is where a lot of different threads come together. But I think on the strategic level, right? It’s first to step back and say, What is trying to trying to achieve, right? And I think, you know, Rush Doshi has written a good book. He was the China director for Biden administration that he laid out
Eitan
kind of the, yeah, the long game for listeners who are not familiar, right,
Matt
right? So it’s like China sets true grand strategic plans, and then. Filters through into all these different kind of different policy domains where they want to, in a sense, block, build and expand their their their influence and their power and their security across all these different domains, economic domains, cultural domains, monetary domains, you know, space, underwater, etc, right? So they have sort of an all, the above approach to sort of reinforce their national security, to sort of grow their their power in their in their original sphere of influence, and then to project global influence, to become, you know, a peer competitor to United States, to sort of stand on their own two feet against the US, kind of led international order to sort of be able to to be a rule giver and not a rule taker in the global system. So that’s kind of their overall long term objective, right? And they they’re building up their sort of enduring sources of national power, technological scientific strength, as well as their own national champions across these emerging fields of technology, to act as sort of the platform on how much they’re going to project that strength in the next 510, 20, plus years. And so they have adopted, you know, a strategy in these different domains to do that in a particular domain of sort of what you might call information communications technologies, which are essentially the digital substrate upon which, like all of our civilization now runs, right? So there’s the hard structure of that, right? The fiber optic cables, the Huawei 5g the ZTE surveillance systems, hikavision. So they’re deploying around the world and sort of offering essentially a techno authoritarianism stack to, you know, willing subscribers around the world, in the Global South, in particular across Eurasia and the Middle East, even in South America, where the sort of the deal is you get, essentially to upgrade your sort of digital economy infrastructure with Chinese kit. It comes with all these sort of inbuilt advantages for regime stability, political dissent suppression, as well as you know, these other modules, right? If you want to hook into the Chinese economy, you can get Alipay, you can get sort of WeChat, you can get kind of these digital payment platforms along for the ride. And that sort of stitches together wide swaths of the globe into this kind of techno authoritarianism platform that or stack that China is trying to, I think
Eitan
you’ve called it techno authoritarianism as a service, right? Or something. Yeah. That’s
Matt
sort of my, my little glib way of kind of talking about is, yeah, there, and is there examples of this where you see this political and sort of technological dynamic play out right in the in the Horn of Africa, about five countries. They’re all sort of one party, regime states, they sent most of their kind of up and coming regime, partly, sort of party officials, like sons and daughters of the elite, to this sort of CCP training academy in Tanzania. Was the only CCP party school outside of outside of China. They sort of get trained in sort of the Chinese political model of governance. And then all those, you know, sort of cadres went back to their countries. And within about a year or two, they all started, they all signed up for for Huawei cloud deals, essentially. And you can kind of see this, this political and technological kind of paradigm, kind of, kind of playing out and so to that’s like now, just the basic sort of infrastructure layer, obviously, AI is a part of that now, as well, on digital currencies right? China has a strategy of trying to export right kind of their their model of central bank digital currencies around the world, and they’ve been using something called called Enbridge, which was incubated at the Bank of national settlements, has now kind of been spun off and is now kind of its own initiative after us, pressure came to bear on bis, but it’s effectively an operational kind of cross bridge, cbdc platform that is really meant to link kind of central banks of Asia and the Middle East into a clearing and training, into a sort of clearing and settlement system that’s kind of like a hub and spoke between central banks and sort of The major banks in those, in those those countries that by essentially acts as like a bypass failover network alongside sips, which is the cross border interbank payment system that China has been exporting as well that has mostly grown in the Middle East and South Asia. And you can see these are like both traditional financial rails as well as new digital currency rails that are designed to create kind of alternative financial Clearing and Settlement Systems for China, you know, around Eurasia, with its main training partners that acts as like a system bypass to first order to act as like, you know, redundancy in case they get Swift, you know, de swifted, so that, in of itself, acts as a bit of a deterrent against us coercion, because now they have a credible alternative, sort of failover network that they could use, or set of networks that they could use. And so the threat of us, de swifting them, or swifting Some Chinese banks, is less. It bites less and then more in the medium to long term, it acts as a platform to sort of build and expand their influence. Months right now, it could potentially take more, marginally more volume of those sorts of of that sort of trading activity or or trade finance activity that that routes around traditional sort of Western financial sort of institutions and infrastructure, right, like the chips clearing system in in New York, and so this is all on the margin, like, not like an overnight, like, okay, the dollar is dead, or anything like that. But this is a a process, because the dollar is both a unit of account, immediate exchange and a system, right as a sort of a corresponding banking system. And, you know, sometimes people conflate de dollarization, as, you know, the overall sort of percentage of global trade denominated in dollars, versus thinking about the network topology of the global financial system. And I see very clearly the network topology of the global financial system is undergoing pretty radical change, right on a timescale that’s relevant for great power competition, even even as the overall kind of percentage of, say, dollars being traded or being used to denominate global trade is only sort of marginally coming down, right, not kind of like any sort of crisis. And so this is where, kind of, yes, this sort of global network, you know, digital network competition has like a core monetary element to it, because monetary networks are not just, you know, figments of people’s, you know, whatever they want to think about what sort of symbol they have on their bank account, but like hard networks of power and infrastructure and institutional relationships, right? And China’s building a different type of institutional structure for the global monetary system. The 80 years the US kind of led the sort of organic development of correspondent banking networks around sort of trading centers in the world, and sort of became offshore, sort of, sort of dollar dollar centers, that has become a major platform for us power projection, right? The extra territorialization of our sanction regime only works because most of the world relies on these dollar clearing centers and offshore offshore banks, essentially, to route their dollar payments for trade, right? And that has been a network effect that’s been really useful to us. China is not trying to reproduce that whole sort of organic, hierarchical banking system. They’re trying to leap ahead, using digital currency sort of systems to kind of just create this sort of bilateral, almost peer to peer at the Central Bank, national bank level. So that’s kind of China’s China’s role here. And so they have their their digital currency, digital Yuan, but it’s less okay just trying to extraterritorial, extra kind of internationalize their RMB, which is probably going to run into some deep economic constraints about the nature of their their closed economy and their surplus. There are massive surpluses. It’s hard to create an international unit of account when, when you’re running such massive surpluses. It’s why the US has this issue with we. We are the, you know, the dollar reserve currency, but we have to then generate these massive structural deficits in order to supply dollars for the rest of the world. And of course, that has led to all these friction, all these, all these issues now, right? So there’s a lot of again to summarize. There’s like, both the traditional economic and monetary competition playing out, the sort of legacy, um, sort of imbalances in the global trading system that we’ll see if the administration wants to, you know, do some shake up there. And then there’s just this technological competition for what is going to be the platform of the 21st century, for for digital commerce and trade, and, yeah, there’s, I think US and China are taking very different approaches to that. China has, like a top down directed, very specific strategy. The US has mostly kind of, you know, rested on its legacy laurels. And then there are these emerging, kind of private sector, open source digital currency projects. You could say Bitcoin and dollar based stable coins are kind of the two most important ones that are kind of emerging, or more organically on the bottom up around the world, and it’s kind of, this is the, you know, and that area, this is kind of the interesting kind of dynamic playing out absolutely
Eitan
well. A few weeks ago, we had on the pod Tom Keating, who is the head of the Center for finance and security at Rusi, and he spoke to us about the national security implications of, you know how countries store their national wealth, as well as settlement and clearing systems in the context of alternative payment systems, a lot of what you were just describing, you have written, I have a quote here that the the the blade of sanctions might be growing dull, and that the world is, quote, rapidly vaccinating itself to The threat of US sanctions via alternative national settlement systems that bypass us clearing infrastructure so with the prospect of a possible scuffle, if we want to be euphemistic, or a conflict in the Strait of Taiwan. How? How do you kind of view this conversation, and is it through CBDCs and that central bank linkage that you see power being and leverage being exercised, or are there other kind of financial, digital and and blockchain based or other kind of mechanisms that you see playing out in that space?
Matt
Yeah, this is where I have to separate. Analysis from like, I’d say, non conflict scenarios where we just sort of continue to compete for dominance and influence in these in these technologies. And China has something called the blockchain surveillance network, sort of a, again, more of a permissioned, state sponsored kind of consortium to kind of support blockchain innovation, Blockchain projects, and that’s do part of their overall they want to make sure they’ve got irons and all the different fires. But their strategic initiatives are about creating kind of their own redundant and sovereign, sovereign payments and clearing systems with with as much the world as possible, right? That that are, that are alternatives to Swift like, sort of are there just in case, and then can become for networks that they can sort of marginally try to reinforce over time, to sort of take, take market share, essentially away from the legacy system. Then there’s the crisis scenarios where there is, okay, you know, no kidding, conflict in South China Sea or over Taiwan, we sort of start to climb this escalation ladder. And the financial domain, the financial component of that conflict, is going to be extremely important. And there’s been some war games to think through that as to see who has the upper hand in that, like, who’s got the glassiest jaw? And it’s not clear to me that, like, there’s an obvious answer to that question, right? It certainly will be very different than, like the Russia, the Russia example, right? I think people there, if your first thing is, oh, just to look through the Russia sanctions is like a template that will fail you. For one, it’s just China is so much more integrated into the global trading system and also such a massive source of dollars in kind of the in the Euro dollar system, right? They have such massive surpluses of dollars that there’s just such a massive interpenetration between the Chinese banking system and, say, the Japanese banking system, the South Korean banking system, as well as all this sort of dollar debt in Eurasia and Africa, that the idea that you’re just going to, like, cut that off without creating, essentially, a complete global financial collapse, is just, it’s just not happening, right? So you would have to combine that with, you know, trillions and trillions of dollars of Fed liquidity, swap lines, etc. It would be, it would be a disaster of, you know, COVID Times said, you know, times, several orders of magnitude, right? So not something you just would want to walk into kind of wildly, right? And, and, and, yeah, and that’s just in the financial dimension. There’s all sorts of considerations on the cyber side, right, which is obviously we’ve gotten, you know, disconcerning reports like every few months about another part of our critical infrastructure that Chinese cyber actors have have compromised, and probably still continue to compromise across our entire critical infrastructure right, including our financial system, right, but also, maybe even more importantly, our ports, our water, our energy, our dams, our traffic control, etc, have gotten access to, you know, sensitive sort of Treasury Department networks as well, including CFIUS, our economic research. So we would have to be concerned that if we got into this escalation in a crisis, that there could be actions the Chinese could take that could create very severe financial instability in the US or around the world, and there’s kind of a mutually sort of destruction in there, right? Because we’re so interdependent, so intertwined. It’s, it’s like that sort of the it’s like this sort of sanctioning of training of Russian oil, but again, like 10 times the magnitude, right? It’s at least oil somewhat fungible. And even then, we didn’t really sanction the oil early on, right? We only, I think, just last week, have sanctioned the dark fleets and sanctioned the real crude, and you saw, you know, Brent, I think, go up by like 6% Yeah, and, you know, that’s probably accounting for the fact that it won’t be, you know, completely, universally enforced you have. I mean,
Eitan
if we look to the Cold War, you talked about mad, mutually assured destruction. Ultimately, without a few speed bumps, cooler heads did prevail, but there were some close calls. Is there? You know, it sounds like Matt pines. Prediction is that we may be in for it if there is a conflict in the South China Sea or some kind of flash point in the coming years, but the level of interconnectivity might cause people to think twice, or at least introduce different frameworks than they did ahead of or following the full scale invasion of Ukraine. Is that, am I hearing you, right?
Matt
Yeah. I mean, I think if I would be more, more like, take the example of the Russia invasion, right? So happened in whatever, mid February, that weekend, the g7 you know, finance you know, finance ministers got on the call, you know, Secretary Yellen said, we’re going to block all of, all of, all of Russia’s reserves. You know, by the next Monday, Japan signed on, I think, to that on Wednesday. And so it’s like 300 and some billion dollars of Russian Central Bank reserves were frozen. Then we said we’re going to. Them out of Swift but when we say they we really just mean, like some of their major banks, Gazprom, but we’re going to create a helpful cheat sheet that we give to all the main sort of commodity traders and the major kind of global banks to see, well, this is actually how you still, you know, pay for your commodity trade with Russia without violating the sanctions on the major entities that we’re listing. So we still want to get the natural resources that we need to lubricate the global economy out of this entity that we’re sanctioning and then
Eitan
financing Putin’s war machine. Yeah, without finding questions,
Matt
but it was a it was a recognition of just how, like, you can sanction Libya again, probably not gonna have a strategic impact. You can sanction Iran. And was more significant, they’re a major natural resource provider, but was sort of, you know, the relative power was, was there right to have that and then mitigate the external effects you even then still had, like the Europeans tried to basically create their own shortcut around it, right in stacks. And that was a major geopolitical issue, right? Russia took that up another whole, another order of magnitude. And you saw there just how many countries, including friendly countries like India and others, were more than happy to essentially help the sanction entity, sort of arbitrage, you know, that regime right, and still essentially earn, you know, revenues, maybe not as much as they would otherwise have have been able to accrue. So it was like adding friction to the subject of the sanctions. But I think what we saw in Russia is just the strategic impact has sort of diminished right at each scale of the entity you’re trying to target. And so you would like naturally, then, just without doing any further analysis, have to assume that like that, that ratio of like strategic impact would fall proportionally for in China’s case, and therefore, and also the potential for blowback would be proportionally higher. And so I think it’s it would be prudent for policymakers and strategic planners to consider a conflict with with China in a fun way, different as a fun way, different set of trade offs when it comes to wielding the financial weapon, right? It’s just not going to be off. You probably giving us the same sort of of advantages that we think it has in these in these previous cases.
Eitan
Okay, given that you, you, you know, you mentioned the cyber attacks, and you know, we’re on the heels of, not only the salt typhoon attack in late December, large Chinese bot nets have been disrupted in the United States this, this or last, last year, I should say so, a ton of attention, you know, I think rightly, is being paid to China. I think my question for you here is, is that what is misguided in that attention that is being paid to China at Sentinel one, you’re advising multinationals on cybersecurity and geopolitics. What do you what do you think people are missing or maybe misunderstanding about the cyber landscape, either as it pertains to kind of some of the trade based and find finance based, kind of angles, or even more broadly,
Matt
I think one thing that has struck me over the past few years, obviously, we pay a lot of attention to China. China’s a threat actor. China’s as a threat actor, specifically for multinationals, critical infrastructure companies, critical technology companies, has been the increasing recognition that one the government’s not really going to come and save you, you know. And so that is, that’s a tough pill to swallow, and I think that needs to be factored into if you are a company, if you’re a company, right? Like, again, coming to save you, meaning, like, protect you, right, from, from, from China, right? Like, if things are like, you had a Colonial Pipeline, obviously, there’s certain capabilities and assets can be surged in to help, you know, reconstitute systems, or get a private key from a ransomware crew, et cetera. So they’re saying the government is like completely at the lunch. It just means that the scale of the sectors that are being targeted, the amount of of effort on the Chinese side dedicated to this as like a strategic priority, is just vastly over, matching what the US government can can, you know, feasibly offered to the private sector to protect, right? And so this is the onus is really on the private sector, right? This critical infrastructure owners and operators in particular, to sort of take that responsibility, right? And the issue is, we live in a capitalist system where these risks are hard to price, and you know, the incentives aren’t necessarily to internalize the costs to mitigate that risk, right? Like, obviously these, the Security Leadership these countries takes the threat seriously. But at the end of the day, if you have to prioritize spending 500,000 a million dollars on, you know, a certain project, or threat hunting Initiative, or enhanced logging, or re architecting your network, or ripping out some equipment, putting in some new equipment. These are expensive.
Eitan
There’s a high opportunity cost for and there might
Matt
be other things, you know, putting out MFA to the other half of the workforce that you haven’t gotten it to right. And so I think, you know, one of the lessons I’ve drawn is just while at the same time that the threat is extremely large, and the US government is kind of probably not going to be there to help you. But. These threat actors like China are not exactly like, like, again, like, there’s no one weird trick that’s going to prevent China from getting into your stuff, right? But there’s a lot of, I would say, low hanging fruit, like almost basic security hygiene, things that a lot of companies like still could do that would be, that would be high ROI, right, to mitigate their overall cybersecurity risk, right? But also kind of make it just marginally harder for trying to get into your networks, right, just trying to add friction, right? And, of course, there’s no obviously, we have certain capabilities. We offer, we sell as a service, and a lot of companies do as well. But I think people, just sometimes, I had to come to this realization of to having never these different engagements, just how challenging it is, and this line, this vague line of responsibility, of like, at what point when a nation state is attacking, essentially penetrating a private sector network, does it become a national responsibility versus a private sector responsibility, right? When that company is a critical infrastructure, right? The government has an acute national security interest in ensuring China gets out right? But that’s sometimes a kind of times a tricky line. The government has limited resources, right? And so this is going to be interesting policy question for the incoming administration. How do they balance offense versus defense, strategic resilience versus strategic deterrence, right? Right? Because that’s the whole thing. Is, you want to make your you want to make your jaw like, not as glassy, and you want to make the adversary think that their jaw is glassy, right? And so that’s a mix between making sure your defenses are built up and private sector networks are secured, while credibly telling the other guy like we were willing to our threshold for response for these activities is now going to be different, and we’re going to change your strategic calculations. So Secretary, I mean, National Security Advisor, waltz has sort of described that as, like a shift in sort of tone. We’ll see how that translates, right? Cyber deterrence is a very tricky thing. It’s not like, you know, traditional
Eitan
um, sort of, right, you can’t always measure that you deterred someone. Yeah,
Matt
and cyber is inherently ambiguous. Attribution is hard right. Effects are non linear, and we don’t have, like, Good, well defined strategic doctrine, or strategic communication between the two powers on what, what our red lines are. No go areas are tit for tat, thresholds, etc. And so that is, that’s a source of risk and uncertainty. Well, we
Eitan
definitely see that playing out on chain a lot, I think, raising the cost for cyber criminals and other threat actors, whether it’s in the ransomware space or in mid December, we put out, we released the preview of our stolen funds chapter to our crypto crime report for this year, and looking at some of the TTPs used by North Korean threat actors. And a lot of them are not always on chain, sometimes leveraging it workers and other vectors, sophisticated trade graph to grain access, I think increasing literacy and as chain analysis, motto goes, building trust in blockchains. But a big part of that trust involves literacy and education and capacity and awareness. So you mentioned the incoming administration. I want to, I want to pivot back to that. You have written an article on great power network competition and Bitcoin, as well as a memo you prepared for incoming Treasury Secretary, Scott Besson. And I recognize we have two Americans chatting here, so maybe we can also take a look at the global perspective being that chain analysis. It’s a global company, and you know the markets for these, for Bitcoin, for dollar pegged stable coins and other stable coins. You know, these are global markets, and the blockchain is universal in one way or another. So we’re paying a lot of attention here, and certainly in the conversation to digital assets and national security, what are some of the threats and opportunities you see in the context of great power competition associated with Bitcoin and stable coins, kind of the largest, largest, the largest participants in the conversation being dollar pegged stable coins. But just kind of more broadly, what? How do you see that you could take it us wise, or I’m interested also, kind of globally, how you view the landscape,
Matt
yes, as something I think a lot about, and I think there’s a lot that’s packed in there, um, and I think you need to start with some basic assumptions that you want to like, ground your analysis level very forward looking, right? And I think what a lot of policy makers haven’t yet done, although some have, is like updated to a view of the future where the scenario of digital assets, Bitcoin, stable coins, other things, proliferating and expanding quite significantly is now a much higher probability than it was before. Right? And so you now have to consider, like all these other domains of say, what’s our influence in the Middle East, vis a vis China, what’s our Geo economic leverage? What’s our digital network power? Right in this China competition? How does that play out now, in a world where, say, Bitcoin is five or 10 times the size, or stable coins are 10 or 20 times the size, those are now not side niche questions. Those are now. Up those now have to be centered in your analysis, right? Because you’re talking multi trillion dollar assets that that you know, are global, so anyone can play in them, right? And so some you know, and everyone’s going to try to use them to their own advantage, right? Both, you know, Corporate Advantage, individual advantage, as well as sovereign advantage, right? That’s just you have to now, these are variables you have to, you have to assess. And so, for example, I was, I was in in Abu Dhabi before Christmas, at a Bitcoin conference hosted, this is jointly with the government of the Emirates. And there were delegations sent there from multiple GCC countries, right, with a very serious view of to, like, to first order, like, to first order, like, understanding what the Trump administration’s potential, you know, digital asset Bitcoin policy was going to be. And it was, it was a, it was a had a decidedly different character to any other Bitcoin Conference I’d been to, which are typically, like industry conferences. You got the influencers you’ve got. Maybe you have some politicians that are trying to, like, you know, raise their profile. But this was almost like a summit, like a political, like a geopolitical Summit, right? There were multiple delegations from multiple countries, all with a very serious, you know, question, right to bring back answers to to their national leadership, right to their kings, to their Sheik, to the central bank, head on, on this question of, what is, what is America going to do with Bitcoin, right? So that told me it was not a it’s not hypothetical anymore, right? This is now explicitly playing out at the geopolitical level, right? And countries are still assessing for themselves how they’re going to be positioned and then have their own internal political economy, right? Their own internal considerations, the resistances, etc. But I think, like we are firmly past the era where you could just sort of snidely dismiss Bitcoin as kind of this play thing of crypto bros, right? When you have, like, people in control of countries and trillions of dollars of sovereign wealth, like, I’m sorry, but if you don’t believe that, it’s going to be a serious
Eitan
questions of foreign policy and national strategy, including, yes, you just have to like you might not
Matt
like it, but it is what it is, right? And then, if that’s the world you’re entering into, then the United States has like, a very clear choice. It’s like, what does it do in order to ensure that it maintains its national security and its geopolitical advantage relative to its adversaries? This is an open game. People are going to have different strategies. What’s a what’s how would we like to shape the overall external environment, the development, adoption of these of these networks and assets in a way that favors us versus our rivals, right? That’s got to be like the guiding question here, right, at least from me as an American who wants to ensure that America’s interests are, are, are are are furthered, are furthered, right? And along the way, right, I think also have to commit to liberalism and human rights, and so I think these open systems are inherently better than the closed systems that our rivals are trying to impose. You know, around the world, this is just better for human freedom, you know, on net, but it’s a competition, right? And so competition, you have to have a plan. And so Bitcoin, dollar sample coins, I think, are two of the key most important aspects of this, right? And they have different different flavors of implication for the US. And so that’s where I kind of try to unpack that. In those in those reports. In particular, the one I wrote for incoming Secretary Treasury be sent was to try to help, from my perspective, situate Bitcoin in his larger geo economic sort of strategy, right? So if he’s coming in, he has a certain view of a need for there to be a global economic reordering, that the global trade system is fundamentally unbalanced, that this is working against the US national security advantage, that that there needs to be significant changes made. And so he has thought, and I’m sure a lot of other members of other members of his team and other members of the administration are giving thought to like traditional measures of economic statecraft, tariffs, right, sanctions, even export controls, right? Like changing of dollar policy, you know, more technical tweaks around how, you know, funding markets work, and the Treasury market, etc. So there’s all traditional measures of economic and financial statecraft that they’re looking to put into that toolkit. I wanted to make, you know, a case for thinking about Bitcoin as part of that toolkit, right? Okay, you’re looking at the global financial macro, geopolitical chessboard, and you want to re engineer it in a way that favors America’s interests, just to my, to my, to my earlier point, then if bitcoin is gonna be a serious thing, and are gonna be increasingly serious thing. If you ignore it, that’s sort of strategic malpractice, right, right? It has to be a part of it. You have to think about how it can complement your existing strategies and tools. And, you know, think about what adversaries could do in response. Right? That’s got to be prudent planning. And so Bitcoin, right, is both a neutral reserve asset that functions sort of like digital gold, right? Obviously speculative relative to, you know, the proven asset of gold, but it’s sort of on its way to, sort of, you know, increasingly take on larger shares of institutional, even sovereign portfolios over the next five or 10 years. So that’s gotta be, that’s gotta be factored in, right, the adoption of Bitcoin as a neutral reserve asset, sort of complimentary to gold, right, as sort of, you know, taking up some part of that portfolio. Leo allocation. And there’s Bitcoin the network, right, which is this global, open, censorship resistant, sort of transaction system, right, that that doesn’t, that doesn’t go through any, any traditional intermediaries, right, and that rides on, on ramps and off ramps in different jurisdictions, right, that are obviously to your, to your for your perspective, like the critical locus of this kind of illicit finance sanctions evasion issue, right? So, where those rails exist? Who’s controlling those rails? Right? Is it A, essentially, a CCP front or a Russian intelligence front rail, or a an American company, right? That’s maybe more regulated, that’s more cooperative with you, that’s that’s dominating that on ramp and off ramp, right? So Bitcoin is non state, is non sovereign, is global, but its interface with the existing sovereign systems is definitely not right. And so the construction of infrastructure to plug into the Bitcoin network is inherently a state competition, right? And a private sector competition as well, right?
Eitan
And is that the national security implication, then, of creating a Bitcoin strategic reserve. I mean, you’ve written about at the Bitcoin Policy Institute, you’re a national security fellow, and this, this kind of comes through in your writing, the stickiness of network power. Recently, we put out the introduction to our 2025, crypto crime report. And this is something that comes through in a lot of our research, that there is this broad diversification away from Bitcoin alone. We see that going in the direction of stable coins and alt coins, and yet beyond certain crime types that remain kind of Bitcoin dominated, which we cover in the report. Ransomware is one example darknet marketplaces. We see that a lot. There is still this kind of strategic element that you describe. How do you see, you know, on the on the question of a strategic reserve in the US, which has been discussed. You know, when you look at the pronouncements and statements of the Federal Reserve, I’m reminded of the scene from Team America where Hans Blix says, Well, we’re going to write you a letter in which we tell you how angry, angry we are with you North Korea. You know, are we going to see more statements and letters and kind of studies that are rolled out slowly, kind of the considered and deeply conservative and well but well thought out kind of approach. Are we going to see kind of more traction on the stable coin legislation front? Do you think? Or, how do you, how do you look at the idea of a strategic reserve and how? How realistic do you think it is? Yeah,
Matt
so I think there’s an increasing recognition about the political layer and the strategic, you know, layer, right? The folks that are policy launch and the folks that just are kind of like, you know, going with the vibe, right, that Bitcoin and dollar based stable coins as kind of this emerging aspect of digital asset adoption are highly complimentary to US strategic interests, right? And so just on the stable coin side, it’s kind of pretty straightforward, the expansion of stable coins. Do both, both support, kind of the expansion of the dollar network, right, on digital rails to parts of the world that don’t have access to traditional dollar infrastructure, right? So parts of the world that China is also trying to, like lure into their Geo, economic and digital sphere of influence, right? So this is a way of, kind of pushing back and also expanding the dollar network, giving folks access to dollar essentially, IO use on their phone to sort of dollarize the world. And if those are properly regulated, properly reserved, stable coin issuers, well that increases sort of the structural demand for US debt to reserve those crypto Euro dollars, essentially, and that’s mostly on the front end, right, T bills, et cetera. But if you had, say, whitelisted stablecoins from major banks, maybe you could create a portfolio of debt securities to back that that would allow more term funding for the government. Again, there’s a lot of action on that in the Congress this year for stablecoin legislation to create just such a regulatory environment for that, to allow the US to create a regulatory perimeter, and to sort of then expand that into the world, right? And to, you know, write the rules of the road for dollar stable coins, because a lot of countries are already moving ahead. Dollar bikins issued out of Dubai, out of Singapore, etc, right? So we need to play catch up there, and we’ll see. You know how that gets, how that gets, you know, chopped up in the in the Senate, in the house, but as a clear priority, as a clear national security priority, right? They recognize this is important, and, you know, has this sort of ancillary benefit for helping us government finance. It’s increasingly large deficits, right? We now pay more on interest than our than we pay on defense. So kind of a problem, and that gets in the Bitcoin question of strategic crime reserve, right? Where there’s certain things that could be done you, I’d say, structure the benefits in like three categories that would also, you know, indicate different levels of policy responses. One is okay, if you think Bitcoin is a good thing on net for human for human values and liberal values, and also our sort of hard power long term, then you want to send just a positive signal. You want more Bitcoin to the coming come to United States, relative to Dubai, relative to Hong Kong. So. So at SBR, that’s just kind of like a an announcement that the US government is Bitcoin reserve. Yeah, it’s just gonna, it’s more of like a signal. It’s like it’s sending a a clear, kind of clearing call to the world that, like, America is going to be pro Bitcoin. And we could just draw a box around the existing holdings and say, the US Marshal services kind of seized a sort of crypto and commit not to sell it and just say this is our SBR, and that that signaling function would be quite strong, and that could be done executive order. You would then say you could add to it. That would be even a potentially stronger signal, right? But it would be limited to how much you could add to the SBIR. This would be the US government actually buying it, and that would require use of funds and without congressional appropriation, there’s limited funds that could be used. The exchange civilization fund that’s available to the Treasury Department per the global reserve Act has probably about 40 billion in like a net positive position, since you just surplus couch cushion money that could be used to fund some purchases of Bitcoin. But again, 40 billion would be decent, but it wouldn’t be like, you know, a strategic game changer, right? But it would be, again, adding to this signal. Then there’s this more significant bill that was introduced by Senator delamas in the Senate called the Bitcoin Act, which would, in its latest incarnation, kind of commit the US government to purchasing a total of 1 million Bitcoin over five years. And there you’re really getting to the strategic global discussion of what is the long term objectives for such an SPR and there you’re, you’re, you’re really pointing to a much more foundational analysis of the evolution of the global economic and monetary system right which, right now, relies on on Treasury securities. And so the argument, from my perspective, is the Treasury market is going to be increasing sources of strategic vulnerability as we have to essentially find more balance sheet to absorb ever increasing amounts of treasury security issuance. At the same time that our main adversary is aggressively de risking itself from that legacy monetary system and looking to alternatives. And so the Eurasian power block is marginally shifting their reserve holdings into gold and away from Treasury securities. And so we are having to sort of find other sources of demand for our debt, and increasingly cramming that into our friends and allies is already strained fiscal balance sheets. So we’re heading into this point of both strategic competition, where this function of the Treasury security as a global reserve asset is an increasing source of strategic vulnerability for us, right? It used to be a source strategic strength in the petrodollar system, where we could, like, basically help dollarize The world, recycle, you know, foreign dollar surpluses, mainly from the oil countries, into our debt, into our asset markets. And this sort of flywheel worked, but it had this collateral consequence over many decades of essentially de industrialization and atrophy of our of our defense industrial base, all those surpluses were instead redirected into financial markets, so you had rising inequality, sort of asset prices that sort of were outstripping real economic growth, and our political system kind of then generated that, that instability, right? We can’t have the system run. We can’t be kind of the money laundering capital the world for so long without creating political corruption and defense atrophy. So there’s this record.
Eitan
You also have a situation where the main customer for said oil, even if it’s dollar denominated, has as one of its goals the revision of the entire system on which the dollar trade relies. So that’s kind of a an interesting cherry on top.
Matt
So you need to, yes, you need to hedge against both the risk of a of a strategic crisis in the treasury market, and find ways of, potentially, you know, leveraging Bitcoin to over the long term, kind of reinforce trust right in the treasury. Because right now, like you have this, you know, always this sort of lurking tail risk, right? That requires another several trillion dollars of QE from the Fed, right? Whenever there’s some air pocket in the repo market where you get a COVID or you get a Taiwan crisis, and that involves printing trillions of dollars, and you then have to, usually, force people in to become buyers of your debt via financial repression, capital controls, et cetera. Those would be quite damaging to the like world position of the US and the economic order that we’ve constructed. So any sort of hedge you can sort of structurally embed right in your on your balance sheet that’s like relatively low cost. Now, right? Doesn’t cost a whole lot, but is essentially has. It has a inverse profile with respect to the risk you’re running, right? So if you have to do this all of a sudden debt monetization event, well, guess what? Hard assets like Bitcoin and gold are going to run right? And if you have those on your balance sheet, well, then those are essentially going to absorb right, that, that, that that monetization. And people might even rationally look at that and go, Oh, well, actually, that acts as kind of like a natural, sort of counterbalance right to the debt monetization that could be coming, right? It’s always like, essentially, like an insurance payout, right? It’s like a long term option, right, that most people don’t need to think about, but the government needs to think about 510, 20 year planning and strategic failure modes, right, that they would rather not talk about, because they can be self fulfilling. But this is where I think Bitcoin again, it’s not like the one weird trick, but I think it’s now reached the point where it’s it shouldn’t be sort of laughed off as a potential.
Eitan
All right, perhaps not a panacea, but ignore it at your own peril. Yeah,
Matt
and meanwhile, like, I have it under credible authority that there are countries that are already acquiring several 100,000 Bitcoin, you know, moderate size, say, Gulf countries. And so that is okay. Like, you can say, well, that’s ridiculous, but there’s, there is a, there is a, there is a reflexivity here, right? And if the US, you know, wants to mitigate the risk of of losing that sort of advantage or option, it has to, you know, go relatively soon to to mitigate that, but it can’t go too far, too fast. I think that’s the prudent risk, right? You wouldn’t want to like, be like, YOLO into Bitcoin, right? We’re just gonna like, screw the Treasury market. It’s Bitcoin now, right? That would not be, I think, a prudent plan. I don’t think anyone is seriously considering that. But I think, yeah, if you have to do the scenario analysis, 510, 15 years down the line, and if you consider a scenario where bitcoin is, say, some meaningful fraction of gold, or even reaches parity with gold, well, just look at Gold. Gold is a huge portion of sovereign reserve assets, right? And it’s a geopolitical asset, right? It’s, it plays a very significant role in the structure of great power relations. And look at the history of 20th century, like a lot has been has been written about, stands
Eitan
to reason. The same could be true and will be true for digital gold, yes. And
Matt
so it’s like, okay, well, you have to then plan for a scenario where bitcoin is is reaching that level, and then it’s like, clearly to your advantage to have relatively more of it than your rivals do. That’s right, not that complicated.
Eitan
Great. Well, you mentioned trends, and looking forward to 2025 I have something of a mini lightning round for you just to I’ve a few questions I’ve been meaning to ask you, what are you keeping your eye on in the cyber domain for the for the following year, the upcoming year, and what kind of Nexus, if at all, are you are you tracking on the blockchain technology and cryptocurrency front?
Matt
I’m very excited to see what policy changes the administration unleashes on, say, offensive use of cyber right, or even takes certain gloves off, or winks and nods at private sector hack back, right? Yeah, there’s kind of been this somewhat tongue in cheek idea, like cyber letters of Marc, right, all sorts of ideas thrown around, right? But there’s a recognition that the status quo in terms of the ransomware ecosystem and nation state capabilities, as well as the rapid proliferation of AI, you know, is going to continue to stress private sector defensive capabilities. And so I don’t know what that tipping point is, where the sort of the current way of doing things has to be, has to be radically shifted. But you could get to that point in 2025 you know, all it takes is one or two really bad incidents, right? As we’ve seen, where it sort of wakes people’s, it shakes people’s assumption, to whet people’s appetites, yeah? And so that is, yeah, I think his ideas floating around. I don’t know who, what the income administration, how they’ll, how they’ll take action on that, but that’s where I’m I would focus, right? That sort of change of attitude and risk tolerance around, you know, offensive cyber, both on the official domain and in the private sector.
Eitan
Interesting. Okay, I have two, two less crypto centric topics, but I think, you know, I mentioned your eclectic background, and I think our listeners would be interested. You are also a novelist. Can you tell our listeners a little bit about your first novel? Expectation value?
Matt
Yeah, you know, a long time ago I thought, you know, I have this thing. I need to write it down. And then it turned into this, you know, 140,000 word sort of science. Are you Satoshi? I’m not Satoshi. Okay, I had to ask and state that for the record, if I was Satoshi, bro, I would be, I wouldn’t be talking to you. I’d be on an island somewhere with, like, you know, armed helicopters flying around. Yeah, but no, my novel is it was interesting. I tried to write it. I wrote it basically between 2015 and 2017, I think, roughly. And I sort of sat on it and I said, What the hell I’ll publish it. But it was basically about, you know, emergence of sort of runaway artificial intelligence, as you know, wove it into essentially a traditional espionage drama, right? So, but with private sector groups like mercenaries as well as kind of, you know, these, these cults out of San Francisco that I think have now become pretty apparent, right? The sort of effective altruist like we need to, you know, ensure that the future light cone of humanity is dominated by by aligned super intelligence, as well
Eitan
as sci fi meets Nvidia meets Jen said Wong meets John le Carre,
Matt
Exactly, yep. So essentially, have spies, physicists, sort of sex cult San Francisco, AI, billionaires all fighting for control of over, you know, super AI. And that was that was written. I think I wrote that before it became a thing. So just
Eitan
reads like the business page today. Yes, well, for our listeners, you heard you heard it here first, or if you knew about that book you didn’t, but check it out. I. Don’t mean to blow up your spot, but I do think this is a nice, a nice way to end the conversation. I think this is what way outside the scope of most of our listeners. You’re one of the more knowledgeable voices out there on UAPs and UFOs. So for our unfamiliar listeners, can you please walk us through the issue, The Good, the Bad and the Ugly. You could give us a TLDR, a crash course. And where do you recommend people go for more information on on this issue, which seems to be gaining more attention, not less?
Matt
Yeah, if you’re talking about wild cards, this has got to be your biggest wild card for 2025 here. And yeah, it’s hard to give a TLDR, other than to say that this subject is very real and is and is of acute and intense policymaker interest at the highest levels in the US government, other governments around the world, UAPs, unidentified anomalous phenomenon, is sort of the watch word now, replacing UFOs. But of course, a new term has entered the lexicon the last year or two, called non human intelligence, which was introduced more formally by Senator Schumer and Senator Rounds and Gillibrand and Todd Young and Martin Heinrich in a bill that they introduced and passed in the Senate last year. Or actually 2023, was the first version the unidentified anomalous phenomenon Disclosure Act. So if you just want to kind of get your arms around like an official reference. I would encourage folks to just read the 64 pages of read the act, read the definitions that they have for unidentified anomalous phenomenon, for technologies of unknown origin, for non human intelligence, references to biological materials, and you’ll see just how serious the Senate and those individuals are on the subject, and that bill was the result of multiple years of mostly behind the scenes investigations and conversations with witnesses and whistle blowers coming out of these legacy program activities that the US government has been engaged in for decades, and other folks, maybe more ancillary to the US government have been engaged in for many decades, and this will become more into the public discourse very soon, you’re going to see more individuals with firsthand knowledge of these programs coming out describing their their experience. This will start to enter into the public domain. We’ll see how the administration chooses to act on this as a policy lever. You know, from the Secretary of State, Marco Rubio, he knows a lot about this. The incoming CIA director Ratcliffe knows a lot about this. The National Security Advisor waltz knows a lot about this. You can even look at President Trump’s statements on Joe Rogan, where he talked about looked up the people coming from space. So yeah, this is going to be a very serious conversation. It has now become also a thing that the private sector is is chasing. So this is a pretty radical change in the past year or so is enough of this information has diffused out to enough sources of private capital and have given, given, essentially the the nod to go do things on their own as a way of supporting what the government is sort of postulating as this soft disclosure process.
Eitan
I won’t, I won’t be so brazen as to ask you for the on chain nexus to that. But it sounds like there is, there’s something, there’s something, there’s a there, there, and there’s something that relates, perhaps to some of what you discussed earlier, relating to strategic elements, great power, competition, or maybe, you know, something beyond the nation state level. I don’t know. I mean, I’m an outsider and clearly a noob, but
Matt
yeah, I mean, it’s literally the biggest question you could, you could pose here, right and worthy of analysis, its implications extend across every field that you could consider right of human civilization. So I won’t pretend to articulate all of those, but the geopolitical competition is extremely relevant. You know, China and Russia have, both have their own programs and are making at least China has made significant advances in critical capabilities, and that’s why the US is changing its its security posture and its that sort of tone around the subject. They recognize that the approach that’s been taken for the last 80 years is not sufficient to meet the pacing threat from China, and so they need to bring you know, and this was a quote from legislation, in order to mitigate the possibility of foreign technology surprise, the federal government must broaden awareness of historic, exotic technology antecedents previously provided by the federal government for research and development purposes. Sounds like a helpful in order to mitigate the possibility of trying to gain the jump on us the federal government was broaden awareness, meaning get more people aware, especially more like, say, advanced technology companies and the best and brightest aware of these historic, exotic technology antecedents that had been previously provided by the federal government to certain elements of our defense industrial base. For. R and D over many decades.
Eitan
I’m picturing all the movies, but at least a Frontline special, yeah. And, of
Matt
course, this subject has been stroded in taboo intentionally, right? It was a, it was a counterintelligence function to make popular culture sort of sneer and deride this as a source of taboo and and sort of, you know, push it off the the mainstream discourse, and also, importantly, distract scientists from poking at certain areas that the government would rather not be pushed into the public domain. But that’s changing. So you’re seeing that official change happen on the margin. It’s likely going to accelerate and as a strategic source of disruption, it’s quite significant. I don’t have the answers to the timeline or all those implications how much of this will be managed and controlled and how much will be unmanaged uncontrolled. But yeah, folks that are not paying attention to this should probably start doing some research again, like just you know, YouTube and Twitter is probably not the best source of of radical information on this subject. I would start with official government statements. And there’s plenty that can start with the history of the bills that have been passed in the National Defense Authorization Act for the past four years. Look at statements by senior political officials
Eitan
and read the lines and read between them,
Matt
yeah, and you might not have to even read between the lines, very short, right? So you know, all right.
Eitan
Well, great, great, great power, competition and network power, offensive hacking, hack back and non human intelligence all on the agenda for 2025 should be a quiet year. Should be a good year. Well, thank you for your time. It’s great to have have had you on the pod.
Matt
Yeah, thanks for having me. Thanks, Matt. Bye.