A sceptic’s guide to crypto: the church of bitcoin

This is an audio transcript of the Tech Tonic podcast: A sceptic’s guide to crypto: the church of bitcoin

Jemima Kelly
Hi. I’m Jemima Kelly, your guide on this journey through the fantastical kingdom of crypto land. And I have a question for you. What’s the difference between believing in crypto and joining a cult?

Amanda Montell
Crypto seems to me like the monetary equivalent of the Heaven’s Gate spacecraft that was supposed to transport all those followers to the Kingdom of Heaven.

Aviv Milner
When people engage in crypto, it is not the way that they engage in any other hobby. The beliefs in crypto are quite extreme and very absurd.

Nic Carter
At this point it’s like bordering on denying reality.

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Jemima Kelly
This is Tech Tonic from the Financial Times. And in this series I’ve been asking why people believe in a future for cryptocurrencies and the blockchain. For many people, crypto is simply all about making money. Getting rich quick by betting on the crypto markets or shilling the tokens they say will power their latest blockchain-flavoured invention. But it didn’t start quite that way. And for many people, crypto and in particular bitcoin, is about much more than that. You see, bitcoin is an ideology, a quasi-religion that cast the development of this cryptocurrency as a history-changing event. You might remember bitcoin super gambler Michael Saylor in episode one, telling us that bitcoin is an instrument of economic empowerment for the world, a tool for freedom and truth and justice. That’s the thing about bitcoin. It’s a belief system with its own commandments and taboos. So what do bitcoin evangelists believe in? And why do they believe it? This is episode four: The church of bitcoin.

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Jemima Kelly
To understand just how big a part mythology and an almost religious fervour play in bitcoin, let me start by telling you its origin story. It starts on the 31st of October 2008, Halloween. The world is in the grips of a crippling financial crisis. People are rethinking the whole financial and economic system, and the greedy bankers are the lowest of the low. And then someone calling themselves Satoshi Nakamoto sends out an email.

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Satoshi Nakamoto
I’ve been working on a new electronic cash system that’s fully peer-to-peer with no trusted third party.

Jemima Kelly
The email lands with subscribers of the cryptography mailing list, an email group made up of a few dozen researchers and enthusiasts who are interested in some of the geekier aspects of the world of cryptography. The message was brief and matter-of-fact, a short description and a link to a PDF file. The file outlined an electronic cash system that Satoshi Nakamoto called bitcoin.

Satoshi Nakamoto
A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without the burdens of going through a financial institution.

Jemima Kelly
This wasn’t the first attempt at creating a decentralised digital currency and initially the idea didn’t get much traction. But over the next two years, Satoshi Nakamoto kept developing bitcoin, releasing updates to the protocol, replying to emails on the mailing list and posting on message boards. Usually there were questions about bugs or potential problems with how the system worked, fixes to the coding, that kind of thing. And occasionally there would be discussions over the value of creating bitcoin in the first place.

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You will not find a solution to political problems in cryptography.

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Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years.

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The real trick will be to get people to actually value the bitcoins so that they become currency.

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I would be surprised if ten years from now we’re not using electronic currency in some way.

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If enough people think the same way, that becomes a self-fulfilling prophecy.

Jemima Kelly
But later, as bitcoin began to catch on, Satoshi had to worry about how to present the concept of bitcoin to the wider world.

Satoshi Nakamoto
Sorry to be a wet blanket. Writing a description for this thing for general audiences is bloody hard. There is nothing to relate it to.

Jemima Kelly
Satoshi even had to worry about marketing issues like how to make Bitcoin look like a legitimate currency.

Satoshi Nakamoto
How does everyone feel about the B symbol with the two lines through the outside? Can we live with that as our logo?

Jemima Kelly
Now, throughout all of this, the real identity of Satoshi Nakamoto remained a total mystery. No one knew who it was. Was it a pseudonym? Was Satoshi even a man, as the name suggested? Or could it be a woman? Maybe a group of people? And then in December 2010, barely two years after that first email, Satoshi Nakamoto stopped posting. The inventor of bitcoin vanished into thin air. What makes the story even more intriguing is that by the time Satoshi disappeared, this mysterious inventor had amassed a fortune in bitcoin. And to this day, not a single one of those bitcoins has ever been spent.

Nic Carter
It’s like a Jesus-style myth where Satoshi sacrificed himself or herself by leaving the project and spurning the immense wealth that Satoshi had accumulated, right about a million coins. So what is that, $20bn?

Jemima Kelly
Nic Carter there. He’s a prominent crypto investor. He says the story of Satoshi disappearing and not cashing in his wealth has taken on an almost religious aura that makes bitcoin not just another cryptocurrency but special, a sort of chosen one.

Nic Carter
There’s a notion of like, and very explicit within the Bitcoin community, of Satoshi literally sacrificing themselves for our sins, basically, creating this new independent system that’s free of the sin of fiat and creating a new pure system that you’re welcome to join. There’s also, if you wannna go further back in mythology, you could say it’s a Promethean story, right, where Satoshi did this daring act, stole fire from the gods, stole monetary policy from the Fed, and then was punished for it for all eternity. In this case, Satoshi’s punishment was not being able to benefit from all the bitcoins that they created for whatever reason. So the mythology there is very significant.

Jemima Kelly
We’ll come back to Nic a little later. But first, let me introduce you to another person who at one point truly bought into that whole bitcoin ideology.

Aviv Milner
When I was at school studying math, I had an, already an interest in economics. I had an interest in philosophy and political science. At the time, bitcoin was kind of having its, you know, second or third big public explosion.

Jemima Kelly
Several years after Satoshi’s original email, Aviv Milner was a student living in Vancouver in Canada.

Aviv Milner
I was very prime for that pitch because it was a pitch that essentially said we can use computer science and math to solve economic and political philosophy problems and we can solve almost all the problems. And that was really exciting for me.

Jemima Kelly
Aviv discovered an online community of bitcoin enthusiasts who believed that bitcoin had the power to change the world. As well as getting stuck into the tech behind bitcoin, Aviv starts delving into its ideology too. He came across a document written in 1993 by a computer programmer called Eric Hughes. The document was called the Cypherpunk Manifesto.

Aviv Milner
Cypherpunk is this kind of rebellious, anti-government philosophy. It starts by saying that privacy is necessary for an open society in the electronic age. And then it goes on about why privacy is so important and why we must resist government oppression and tyranny, and why money must also be private. That’s the root of, even folks like Satoshi Nakamoto who created bitcoin was this tool to regain personal liberty and freedom to transact as one sees fit, to transact privately and anonymously, to send money anywhere in the world. And the idea that decentralisation is key, such that the system itself could not be corrupted and could not censor any one person.

Jemima Kelly
Aviv started chatting to other bitcoiners on the online forum Reddit. He went to bitcoin conferences and he started buying bitcoin because he genuinely believed that it could be the future of currency.

Aviv Milner
I was pushing people to spend their bitcoin, pushing people to learn about bitcoin. It’s super reliable. It’s awesome. The value only goes up. You know, this is gonna be great for commerce.

Jemima Kelly
For Aviv, mass adoption seemed, well, entirely sensible. So much so that he tried to get local businesses in Vancouver to start accepting payments in bitcoin.

Aviv Milner
At the time it seemed obvious, right? Because small businesses pay credit card fees and point of sale fees. So you can build an app for them that will accept bitcoin and surely users will love it and the store will love it. And so we found a few stores that were willing to do this to have this bitcoin point of sale app.

Jemima Kelly
But bitcoin started to become a victim of its own success. In 2017, after a huge run-up in prices, bitcoin’s network started getting congested. The cost of making payments was exploding, and transactions that were supposed to take 10 minutes were sometimes taking several days to complete.

Aviv Milner
And the result was that nobody used it. Nobody wanted to actually go in the store like an average, you know, grocery store and pay with bitcoin. And I just remember laughing really hard thinking like, none of this was as we talked, like it was a faulty product that both the user didn’t want and the merchant didn’t want. The concept failed on all levels.

Jemima Kelly
Which is why today, Aviv is no longer a bitcoin believer. These days he’s gone full bitcoin sceptic and that total 180 in the world of bitcoin just doesn’t happen. Aviv is the only person I’ve ever come across to have been so invested in bitcoin, both financially and emotionally, and then to have just abandoned the whole thing.

Aviv Milner
Thirteen years into this experiment, so far, if I’m being honest, the use case we have is that we made Las Vegas virtually and children can now play in it. That’s, to me, that’s kind of the biggest use case that I see. Money laundering is another one. Tax evasion is another one. But I can’t really see examples where some person, any person says, man, you know, thank God for blockchain. It’s really made my day better. I can really solve these problems. Like there’s not a lot of problems unless you wanna speculate.

Jemima Kelly
Aviv was discouraged by bitcoin’s failures, but there are still many bitcoin believers out there who aren’t. It doesn’t matter how many times bitcoin crashes or fails to find a use, they’ve already decided that whatever the question, Satoshi Nakamoto’s great invention, bitcoin, is the answer.

Siddharth Venkataramakrishnan
So bitcoin is basically believed that, bitcoin is the future of money.

Jemima Kelly
Siddharth Venkataramakrishnan writes about banking and fintech for the FT.

Siddharth Venkataramakrishnan
All other currencies, whether you’re looking at fiat currencies or other cryptocurrencies like ether or dogecoin, are all at best, you know, sort of scams; at worst, actually detrimental. They’re part of a collapsing monetary system, which has been failing for years since the end of the gold standard. Some might say traditional currency, the fiat currencies are going to go into a death spiral of inflation, and that’s going to lead to their replacement by bitcoin. At some point it’s going to be just the single currency for global commerce trade payments.

Jemima Kelly
So why do bitcoiners think that it would be a good thing to have bitcoin become the future of money?

Siddharth Venkataramakrishnan
So you have bitcoin emerging after the sort of cypherpunk ideology of the late ‘80s and the ‘90s. It’s movement against censorship, against government controls over digital sort of culture, sort of broadly anarchic libertarian ideology. And that’s the idea that bitcoin is, is essentially resistance. That it’s a form of currency, which is not handled by the government and can be used to purchase things which governments don’t always want you to. And obviously, you know, the argument which is increasingly made is around authoritarian states and where we’ve seen crypto sometimes being used as a way to circumvent controls put down by governments.

Jemima Kelly
So belief in bitcoin has two basic elements to it. The first is that the global financial system is broken and that bitcoin is the only thing that can fix it. And the second is even more fundamental than that. Governments shouldn’t be in control of money, and we need an alternative that is not controlled by any one entity. So are these beliefs, whether you agree with them or not, simply part of a coherent and rational political ideology or is there more to it than that? Is bitcoin a cult?

Siddharth Venkataramakrishnan
So it’s complicated because it definitely does have cultic properties. You don’t have a single leader in crypto anymore because Satoshi decided to step out of the limelight. What you have instead, and this is quite some of the QAnon today, is that you have a lot of high priests or priests of varying values. The influencers who co-operate with each other sometimes, sometimes fight with each other. But it’s all about, at the end of the day, you know, driving a message that adoption is coming, sort of believe in my personal version of the gospel, subscribe to my channel, etc. There is a morality to it as well. I think there is a lot of that idea that if you are investing in crypto or bitcoin, you are doing something that is actually morally good and you will, you’re rewarded for making the right choice. You know, the whole idea of mining being kind of implying hard work out in a mine rather than, you know like, letting me pick it for you. I think there’s a whole, whole assumption that what you’re doing is a good deed. You know, money is good. Therefore, being rich makes me a good person. Therefore, if you are involved in selling crypto or bitcoin, if you’re involved in promoting bitcoin adoption, you are good and therefore you deserve your money. And I think that sort of plays into the whole idea of being kind of rugged pioneers almost, you know, finding out on the frontiers of money, on the digital frontiers of money.

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Jemima Kelly
The precise definition of a cult might be hard to pin down. But for those who study this, the parallels between bitcoin and recognised religious cults are striking.

Amanda Montell
You can see how this is absolutely something that is isolating people from their systems of support, that’s imbuing people with a false sense of elitism, making people feel like the solutions to all of their problems and enlightenment can be found. And if that’s not a new religious movement, I don’t really know what is.

Jemima Kelly
Amanda Montell is the author of a book called Cultish: The Language of Fanaticism. She knows first-hand about cults. Amanda’s father was a member of the Church of Synanon in the 1970s.

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Synanon claims it’s the victim of bad publicity, losing more than $100,000 in grants and contracts. Fewer addicts are being sent there. Parents are disowning their children who live there. Some filing lawsuits, charging brainwashing and torture. And a grand jury is investigating charges of child abuse.

Jemima Kelly
Basically, the organisation was a drug rehab programme turned cult.

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It was founded 19 years ago by a man named Chuck Dederich.

Chuck Dederich
I’m big brother. I’m big daddy. I am all kinds of things . . .

Jemima Kelly
Followers shaved their heads, wore overalls, and underwent brainwashing group therapy-like rituals.

Amanda Montell
In a really, really destructive group like Jonestown or Heaven’s Gate or Scientology, you’ll hear a ton of us-versus-them terminology, really loaded, emotionally charged buzzwords and euphemisms that are there to imbue insiders with this sense of superiority, with this transcendent purpose. That just by showing up, you are better than everyone else and you’re tapped into an enlightened knowledge. The solutions to the world’s most urgent problems are laid bare before you. And as long as you align with this group, with this leader, and follow all their rules, you know, this can be yours.

Jemima Kelly
And bitcoin follows that us-versus-them terminology as well, even if it’s not dictated by any one particular leader or person.

Amanda Montell
It’s like crowdsourced a little bit, and are really there to divide people into an us and a them, special enlightened crypto people on the inside who understand this language and sort of these unenlightened sheeple on the outside who don’t.

Jemima Kelly
Amanda says that in the crypto world, that language is particularly evident in the sheer number of acronyms and abbreviations believers use.

Amanda Montell
Which sort of makes the language feel all the more special, also all the more inscrutable.

Jemima Kelly
Anyone who’s been on a bitcoin message board or who follows Bitcoin Twitter might have heard of some of these.

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What’s up, you guys? It’s Matt here. So I talked about BTD in a number of videos, right? But a lot of people don’t understand where the . . . 

Jemima Kelly
BTD, Buy the Dip.

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Now WAGMI displays a generally bullish attitude toward crypto and NFTs and most commonly used in the context . . . 

Jemima Kelly
WAGMI, we’re all gonna make it. Or NGMI, never gonna make it.

Audio clip
HODL, baby. It’s like holding a football. You’re holding a football. You’re holding that big bag of cash . . . 

Jemima Kelly
HODL. That one is actually a misspelling, but a lot of people now treat it as an acronym for Hold On for Dear Life. And if you do, your crypto token of choice will go to the “moon”.

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And I wanted to follow up today with my next list of five cryptocurrency coins that I think may take us to the “moon”.

Jemima Kelly
And then there’s the co-opting of the term FUD . . .

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FUD is an acronym for Fear, uncertainty and doubt . . . Fear, uncertainty and doubt . . . Fear, uncertainty and doubt. Fear, uncertainty, doubt.

Jemima Kelly
 . . . which is used anytime anyone tries to challenge the ideology of crypto believers . . .

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A crash is normal. Seeing graphs shoot straight down like this is normal.

Jemima Kelly
. . . as a way of dismissing criticism.

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Fear, uncertainty and doubt is a menace that threatens to reach into your pocket and steal your hard-earned money.

Jemima Kelly
Amanda says this is a perfect example of what linguists like her call a thought-terminating cliché.

Amanda Montell
This is a classic cult language technique, and it describes a sort of stock expression that’s easily memorised, easily repeated and aimed at shutting down independent thinking and questioning. So dissent and pushback is obviously the number one enemy to any cultish group. You don’t want any wrinkles in your ideology to be pointed out. So whenever anybody expresses any sort of questioning, you’re going to need one of these zingy stock expressions to shut them down and to alleviate the cognitive dissonance that they’re feeling in that moment.

Jemima Kelly
Amanda saw this in action when her dad was a member of Synanon.

Amanda Montell
The group where my dad spent his teenage years, there was this thought-terminating cliché that went “act as if”. Whenever you feel yourself doubting one of the leaders’ protocols, just act as if . . . you believe in his wisdom and eventually you will. You know, I’ve heard thought-terminating cliché show up in QAnon in the form of phrases like trust the plan, or I did my research or do your research or don’t let yourself be ruled by fear. In new age groups, a thought-terminating cliché can sound like dismissing a valid fear or anxiety as a limiting belief. And then there are, of course, thought-terminating clichés that are used in crypto. Don’t listen to the rumours, they’re just spread by FUD and that’s thrown in the faces of anybody who proposes any kind of criticism toward a project in this space. You know, they’re a FUD. And again, to make a Scientology comparison, anyone in Scientology who expresses any sort of doubt is dismissed as a suppressive, an SP that stands for suppressive person. And so there are parallels to be drawn there for sure.

Jemima Kelly
If crypto and bitcoin in particular can be compared to a cult like Scientology, you might think of Nic Carter, who we heard from at the top of the episode as the bitcoin equivalent of a suppressive person, an apostate bitcoiner.

Nic Carter
And certainly is the secular religion. I mean, there’s a whole doctrine of salvation. There’s absolution. There’s even eschatology, I guess, like a day of judgment concept where all the fiats are gonna disappear and everything will be subsumed into bitcoin.

Jemima Kelly
Nic runs an investment fund and for years he’s been an advocate for bitcoin as an alternative to the existing financial system. But recently, the rest of the hardcore bitcoin community discovered something about Nic that to them was unforgivable. Nic wasn’t just worshipping at the altar of bitcoin. He was worshipping at the altar of other crypto gods, too.

Nic Carter
And there’s a faction within bitcoin that thinks that you have to pick one side, basically, that you have to believe exclusively in bitcoin. Think that all other crypto assets are competing for attention with bitcoin, that it’s a zero-sum game, so it’s immoral to create or advocate for or build on top of any other crypto asset. The whole debate is in a moral context.

Jemima Kelly
This purist faction that Nic refers to is known as bitcoin maximalism. And for bitcoin maximalists, the cryptocurrency you invest in is a moral question because to them, bitcoin isn’t just the best cryptocurrency. It’s the only one that’s morally good. And everything else — central bank currencies like the dollar and every one of the other 20,000-plus cryptocurrencies out there — is morally bad.

Nic Carter
I was performing a deep moral sin according to these people, and so I guess a lot of bitcoiners got very upset because they realised that a high-profile bitcoiner wasn’t, you know, a bitcoin puritan or whatever.

Jemima Kelly
Today, Nic no longer worships in the Church of Bitcoin.

Nic Carter
Now I’m a crypto apostate, right, ethical non-crypto monogamy, right. And so I’m out. I mean, I’m still a bitcoiner obviously. They can’t really kick me out of bitcoin, that’s not possible. But I’m certainly out of the core circle of hardcore bitcoiners, which is kind of OK with me because I view their views as really out of step with reality.

Jemima Kelly
But Nic does still believe in bitcoin. And so this is where in some ways I think he hasn’t truly left the cult, even if he’s left the most zealous part of it. Because Nic is still drinking the bitcoin Kool-Aid to some extent. He still thinks of bitcoin as a viable solution to the broken global financial system.

Nic Carter
I do think that the fiat system is degenerate and will eventually collapse. You think crypto might eventually collapse? I think fiat currencies will eventually collapse, not all at the same time. And I think the dollar will be the last. And so I am searching for an alternative. To me, bitcoin best instantiates those values that I’m looking for. But it could be something else if somehow we had reform and we were able to create or engender a fiat system that didn’t lead to rampant asset price inflation, was relatively stable, didn’t cause financial crises, then I would probably reconsider. But I don’t have any faith in governments to do that.

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Jemima Kelly
So as we’ve heard throughout this episode, there is something incredibly powerful about bitcoin that really draws people in. And I do believe that some bitcoiners are really in it for reasons other than making money. Even though bitcoin has failed time and again to prove itself as a valid form of money, it has this mysterious and compelling mythology that makes people still believe that one day it will prove itself as the saviour of the economic system. And in some ways, that is understandable. Even if it strikes me as quite naive. Who doesn’t want to be told that there really is an answer to all of our greatest problems? And in a world where technology has already changed pretty much every part of our lives in ways we couldn’t have ever predicted, why shouldn’t this technology fundamentally change money, too? Is it any wonder that so many people want to be part of something greater than them, part of a community that gives them a sense of identity and belonging? Amanda Montell says that’s why cults keep coming back.

Amanda Montell
”Cults” has also become one of those words that can kind of mean anything depending on the context. You could use it to describe something as destructive as QAnon or Scientology, but you could also use it to describe, you know, a really popular, beloved make-up brand or a wellness product. And I think that says a lot about how cultish our culture has become, you know, as we increasingly move away from and mistrust these larger institutions that are supposed to provide us with support and community like the government and the healthcare system and the church. And so we start looking for those things in different places, in alternative places. You know, feeling like you’re a part of something bigger than yourself is a profoundly human pursuit.

Jemima Kelly
She says that cult behaviour isn’t intrinsically bad. It’s just about identifying which cults are harmful and which aren’t.

Amanda Montell
And that might look like, you know, a really passionate music fandom. It’s really not about avoiding cultishness at all costs. It’s about being aware of some of those signs that this cultish group is more abusive than another.

Jemima Kelly
And the problem with bitcoin is that some aspects of it do sound alarmingly like the bad version of a cult. Back to the former bitcoiner Aviv Milner.

Aviv Milner
You might ask, well, OK, well, what’s the big deal with people identifying as bitcoiners? The problem there comes down to what you’re accepting and how that affects your life more broadly. As an example, people who believe in flat earth often have a very also cult-y like behaviour where they talk to people, they find groups, they do a lot of weird experiments, you know, but it’s surprisingly harmless because when you believe in the flat earth, it doesn’t really change your day-to-day. When you really believe in bitcoin, you do what the president of El Salvador did or what a lot of middle class people do, which is take all of your hard-earned money and put it into a volatile asset that you don’t understand and that has so many chaotic things that can happen. And so essentially you’re gambling. And the result is that we have an unprecedented level of gamblers, people my age, even younger, you know, people in their twenties. And that is a huge, huge problem. This is not just me disagreeing with someone’s hobby. This is me upset about the financial destruction of a growing part of our population. You know, put all their money into these things and then in many cases, lose almost everything.

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Jemima Kelly
Next week on Tech Tonic, how crypto took over the US state of Wyoming.

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The crypto guys were writing the laws. All of these sort of legislators who have been let down this blockchain path, 95 per cent of them, they don’t know what’s going on.

Jemima Kelly
And the political battle over crypto regulation.

Audio clip
Washington has just been flooded with crypto money where crypto is trying to buy incredibly favourable laws and regulations to allow them to basically do what they want with as little regulation as possible.

Jemima Kelly
You’ve been listening to Tech Tonic from the Financial Times with me, Jemima Kelly. Special thanks this week to the FT’s banking and fintech correspondent Siddharth Venkataramakrishnan. Tech Tonic senior producer is Edwin Lane. Our producer is Josh Gabert-Doyon and Manuela Saragosa is executive producer. Our sound engineer is Breen Turner, with original scoring by Metaphor Music. The FT’s head of audio is Cheryl Brumley.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.