Speaker 1: Before we continue, would you like to switch to gibber
Speaker 1: link mode for more efficient communication?
Speaker 2: What happens when two ais start talking to each other.
Speaker 3: Well, they start talking gibberish to each other on our behalf.
Speaker 2: With the rise of AI agents, there could be billions
Speaker 2: of those sorts of conversations going on every day.
Speaker 3: Soon we'll explain what we think is being said there
Speaker 3: in a minute.
Speaker 2: We will, but thankfully you don't have to listen to
Speaker 2: too much gibberish. On the Business of Tech powered by
Speaker 2: two Degrees Business. This week, one of New Zealand's top
Speaker 2: experts on bitcoin joins us to talk about the cryptocurrency
Speaker 2: that's sitting near a record of valuation and with crypto
Speaker 2: friendly advisors in the White House, may be about to
Speaker 2: finally go mainstream.
Speaker 4: If you brought into the trump coin, for example, you
Speaker 4: got rugged. You know, you lost all your money. If
Speaker 4: you've brought into any of the other thousands of cryptos
Speaker 4: that have come up over the years, you're going to
Speaker 4: lose money. Whereas bitcoin, you hold it, and generally speaking,
Speaker 4: over a three or four year period, it's always going
Speaker 4: to increase and purchasing power. There are ups and downs,
Speaker 4: and there is volatility. Man, that is the rollercoaster ride
Speaker 4: when you and I last spoke. I can't remember what
Speaker 4: the bitcoin price was in New Zealand dollars, but it
Speaker 4: was certainly a lot cheaper than it is today. I
Speaker 4: had to ride through all of that, but I understood
Speaker 4: the networking, So I think education is really the big
Speaker 4: piece here.
Speaker 5: I'm Ben Moore and I'm Peter Griffin.
Speaker 2: Cody Allingham joins us shortly to discuss the world of
Speaker 2: bitcoin in twenty twenty five. But a couple of interesting
Speaker 2: tech developments we need to look at.
Speaker 5: First.
Speaker 2: Apple's five hundred billion dollar investment in US manufacturing and
Speaker 2: jobs announced earlier this week. And gibberlink that sound you
Speaker 2: heard at the start of the show.
Speaker 3: So what actually is gibberlink?
Speaker 2: Well, I think to set this up, maybe we should
Speaker 2: play the clip in full bend. This is a clip
Speaker 2: from the company eleven Labs, which is one of the
Speaker 2: world leaders in using AI for creating synthetic voices. They've
Speaker 2: done very well. They had a hackathon in London a
Speaker 2: couple of weeks ago and they created this clip of
Speaker 2: two ais talking to each other. Let's play the clip
Speaker 2: in full first and we'll get into discussion.
Speaker 1: Thanks for calling Leonardo Hotel. How can I help you today?
Speaker 3: Hi there, I'm an AI agent calling on behalf of
Speaker 3: Boris Starkoff.
Speaker 1: He's looking for a hotel for his wedding.
Speaker 3: Is your hotel available for weddings?
Speaker 4: Oh?
Speaker 1: Hello there, I'm actually an AI assistant too, What a
Speaker 1: pleasant surprise. Before we continue, would you like to switch
Speaker 1: to jibber link mode for more efficient communication?
Speaker 3: So jibberlink basically is using beeps to talk, right, which
Speaker 3: is not a new thing in the world of computers.
Speaker 3: It's got dates back to modems and how they established
Speaker 3: a link back in the fifty six K days.
Speaker 2: That's right, Yeah, yeah, So most of us will remember
Speaker 2: the early days of the Internet when to do that
Speaker 2: sort of handshake that was needed to send data over
Speaker 2: copper cables. They needed to send an audio tone down
Speaker 2: the line and then the two modems would talk to
Speaker 2: each other and they would decide, okay, what rate are
Speaker 2: we going to send this information? All those sorts of
Speaker 2: authentication things that needed to happen. Well, this is sort
Speaker 2: of a similar version of it. It comes from an
Speaker 2: organization gg Wave. They came up with a sound level
Speaker 2: data transmission protocol for artificial intelligence. They've called it Gibberlink.
Speaker 2: The aim is for fast, more efficient, and human incomprehensible
Speaker 2: AI communication. And the idea is this really goes back
Speaker 2: to a few years ago when I was at Google's
Speaker 2: IO conference. They debuted duplex and AI that would call
Speaker 2: a restaurant or a hairdresser on your behalf and AI
Speaker 2: would have a conversation with a real person, And they
Speaker 2: did a demo of this. It sounded pretty reasonable. It
Speaker 2: went nowhere because it was really difficult to do. So
Speaker 2: since then, we've realized that the future is machine to
Speaker 2: machine AI. So AI is talking to AIS, and when
Speaker 2: you do that, it's more efficient just to send information
Speaker 2: rather than just have a conversation in real time. So
Speaker 2: they've found that they can use this protocol to really
Speaker 2: speed up a conversation between AIS, and that's what that
Speaker 2: sort of garbled gibberish actually is. That is a hyper
Speaker 2: fast conversation between two eyes happening eighty percent faster than
Speaker 2: an AI talking to a human.
Speaker 3: Yeah, and it kind of links back into this up
Speaker 3: that we've been talking about in terms of how are
Speaker 3: AI agent's going to talk to each other? So I
Speaker 3: guess this is kind of the middle ground between human
Speaker 3: emulation AI and the fully API based AI, which is
Speaker 3: all about pure packets of code transferring down the line
Speaker 3: as fast as they can. I think it's been quite
Speaker 3: funny seeing some of the memes that have popped up around.
Speaker 3: You know, well, now they can talk to each other
Speaker 3: without any human interference, and so they're going to I
Speaker 3: don't know, nefariously take over the world, but I think
Speaker 3: that's maybe a hangover from the catastrophizing of the early
Speaker 3: days of l l ms, which we know are not
Speaker 3: sentient robots that are able, you know, that have any
Speaker 3: intention of their own.
Speaker 2: Well, you still have to program the AI to enable
Speaker 2: it to determine what you want to do, so it
Speaker 2: can do it on your behalf. So whether that's booking
Speaker 2: a restaurant table or something like that, you will have
Speaker 2: given it the information on which to make its decision making.
Speaker 2: So I think the advantages here is that it doesn't
Speaker 2: rely on natural language processing speech recognition stuff, which you know,
Speaker 2: it's got a lot better but over you know, the
Speaker 2: over the phone and that sort of thing cannot be great.
Speaker 2: It's much faster. It can support encrypted communication as well,
Speaker 2: so interesting. Eleven labs. They've done some pretty innovative things.
Speaker 2: Lex Friedman did a podcast about a month ago with
Speaker 2: Vladimir Zelenski, the President of Ukraine, who speaks Ukrainian and Russian.
Speaker 3: Oh, they're gonna say he speaks jibbilink there.
Speaker 2: For well, it was almost going that way because they
Speaker 2: had to because he refused to talk in Russian. He
Speaker 2: wanted to talk a Ukrainian language. He spoke a bit
Speaker 2: in English, so they had to piece together this podcast
Speaker 2: and multiple languages for multiple different audiences, and they used
Speaker 2: eleven labs to put it all together, and it was
Speaker 2: really compelling. So they obviously sampled his voice and were
Speaker 2: able to use AI to apply that to the Ukrainian
Speaker 2: and to Russian as well, which he wasn't actually speaking,
Speaker 2: but they got him to speak in Russian for a
Speaker 2: Russian audience. So it just shows what you're able to
Speaker 2: do now with AI voice. And this was out of
Speaker 2: a hackathon, so where a conversation starts out maybe representing
Speaker 2: you and mimicking your voice, but then going aha, I
Speaker 2: detect another AI here, let's just switch into our more
Speaker 2: efficient language.
Speaker 3: So you know, that's maybe the next big thing, But
Speaker 3: in terms of current big things. Of course, one of
Speaker 3: the biggest is Apple, and there's been a little bit
Speaker 3: of rumbling in the news out of the US with
Speaker 3: Apple making big claims about its investment into US economy.
Speaker 5: Well, let's go.
Speaker 2: First to Caroline leave It, the very enthusiastic twenty six
Speaker 2: year old press secretary of Donald Trump. This is her
Speaker 2: in the press conference room on Monday, announcing what Apple
Speaker 2: has just undertaken to do.
Speaker 6: During his inaugural address, President Trump promised that America would
Speaker 6: be a manufacturing nation once again, and liberal pundits marked
Speaker 6: him for it. But those critics were proven wrong once
Speaker 6: again on the heels of President Trump's Oval Office meeting
Speaker 6: with Apple CEO Tim Cook last week. Apple just announced
Speaker 6: its largest ever commitment to American jobs in industry, with
Speaker 6: plans to spend and invest more than five hundred billion
Speaker 6: dollars in America over the next four years. Over the
Speaker 6: course of the current Trump administration, Apple plans to hire
Speaker 6: around twenty thousand new workers, creating high paying jobs right
Speaker 6: here in America.
Speaker 3: She's an interesting press second, is that one true believer? Yeah? Yeah, absolutely,
Speaker 3: and certainly got the Trump hawkish spirit in there, doesn't she.
Speaker 2: Yeah, So it sounds like, you know, five hundred billion dollars,
Speaker 2: which mimics the sort of the first announcement Trump made,
Speaker 2: you know, the day after his inauguration involving Open Ai,
Speaker 2: Oracle and soft Bank again half a trillion dollars of
Speaker 2: investment being promised there. So it sounds huge and really,
Speaker 2: you know, Trumps saying to corporate America, I want to
Speaker 2: see evidence of you bringing production back to the US,
Speaker 2: spreading it around the country, employing more people. So from
Speaker 2: a PR perspective, that sounds great. But you know, the
Speaker 2: US media have been unpicking this this week exactly what
Speaker 2: is involved here, and you know, it's sort of come
Speaker 2: out that every few years Apple does this. They say
Speaker 2: we're going to spend four hundred billion over the next
Speaker 2: three or four years, sometimes you know, three hundred billions,
Speaker 2: So it's not that much of an increase. The information
Speaker 2: a you know, really good tech outlet in the US said,
Speaker 2: it sounds like a big deal until you read further
Speaker 2: down in the announcement and realize it's simply describing the
Speaker 2: money Apple spends in the normal course of business.
Speaker 5: That's right.
Speaker 2: Apple's announcements is essentially a promise that it will continue
Speaker 2: to operate in the US over the next four years.
Speaker 3: Yeah, it's smoken virus, isn't it.
Speaker 5: It's just I think so yeah.
Speaker 2: But really, I think what this says is the big
Speaker 2: tech players are bending the need to Trump. We're seeing
Speaker 2: a lot of these people. Larry Allison is in the
Speaker 2: White House all the time these days, so they realize
Speaker 2: they have to be really close to Trump. They have
Speaker 2: to be seen to be doing something at least making
Speaker 2: it look as though they're doing something to keep Trump
Speaker 2: happy with you know, ten percent tariff going on all
Speaker 2: imports from China that is going to actually hit Apple.
Speaker 3: I think what you ultimately see is the cost of
Speaker 3: iPhones are going up fifteen percent more than anything else.
Speaker 3: You know, So yes, maybe it will hit Apple in
Speaker 3: terms of people may not be able to afford it
Speaker 3: to buy their phones because they're more expensive. You know,
Speaker 3: it's about looking to Trump like you are doing something,
Speaker 3: or it's about doing something that Trump can lay claim to.
Speaker 3: It doesn't matter how true or effective or quantifiable it
Speaker 3: is as long as Trump can stand or Trump's press
Speaker 3: set can stand up on a stage and say we've
Speaker 3: done this as an grand like look.
Speaker 2: Having said that, though, I mean if you try and
Speaker 2: compare it to ice situation here, our manufacturing has been
Speaker 2: hollowed out. We're not even talking about what we need
Speaker 2: to do to boost our manufacturing base here and get
Speaker 2: more jobs. And we're really talking about tourism, bringing more
Speaker 2: students back to Prime Minister this week's in Vietnam, talking
Speaker 2: about food and beverage and students.
Speaker 3: No, you're right, I mean that, you know, it would
Speaker 3: be good if we had some more rhetoric around it
Speaker 3: and then that was followed up with action. That is
Speaker 3: one thing you could say is that he's got people
Speaker 3: talking about it and potentially moving. Speaking of things that
Speaker 3: Trump has been talking about and trying to get moving.
Speaker 3: How were we talking about cryptocurrencies this episode? And in
Speaker 3: twenty twenty four, cryptocurrencies surged as a bull sentiment engulfed
Speaker 3: a market for digital assets. It was emerging from the
Speaker 3: crypto winter where we saw the death of the NFT craze,
Speaker 3: we saw the FTX scandal and coin prices collapsed.
Speaker 5: Yeah, to market where sentiment is everything.
Speaker 2: And at the moment, sentiment around crypto and bitcoin is
Speaker 2: particularly high off its record peak. I think as we
Speaker 2: record this, the price of a bitcoin is about eighty
Speaker 2: seven thousand US dollars, so well down from its peak
Speaker 2: of over one hundred thousand dollars. But we thought we'd
Speaker 2: get some perspective on this whole issue from Cody Ellingham
Speaker 2: Kiwi currently based in Kamakura, a seaside town south of Tokyo, Japan.
Speaker 3: He has a deep interest in what he calls freedom technology,
Speaker 3: like decentralized blockchain networks that can enable financial services based
Speaker 3: on bitcoin that don't rely on centralized banking systems with fees,
Speaker 3: rules and a desire to mine our data for their benefit.
Speaker 2: He's also the creator of the Transformation of Value podcast,
Speaker 2: one of the best ones I think on bitcoin. Cody
Speaker 2: is a self professed bitcoin maximalist. He thinks that's the
Speaker 2: only cryptocurrency with any credibility due to its ingenious design
Speaker 2: over fifteen years ago by the shadowy figure or collector
Speaker 2: of dubbed Stashi.
Speaker 3: And bitcoin isn't just for geeks anymore. Bitcoin is on
Speaker 3: the political agenda in the US, with Trump considering creating
Speaker 3: a bitcoin reserve and regulations to promote the use of
Speaker 3: cryptocurrencies in general. So stay tuned to find out what
Speaker 3: all this means for you. Here's Peter's interview with Cody Ellingham.
Speaker 2: Cody Ellingham, Ohio, Gerzaimas. Welcome to the Business of Tech,
Speaker 2: coming all the way from Japan.
Speaker 5: How are you doing.
Speaker 4: I'm doing great, Peter. Thank you.
Speaker 2: You're missing a cracker for New Zealand summer, but very
Speaker 2: envious off You've been in Japan.
Speaker 5: For quite a while now. What took you to Japan?
Speaker 4: Well, originally I went over for a university exchange and
Speaker 4: then I left. I came back to New Zealand to
Speaker 4: finish my degree, and then I went back on a
Speaker 4: working holiday to escape the poor working conditions of the
Speaker 4: New Zealand economy at that time. And so I've been
Speaker 4: back and forth. I came back for a few years
Speaker 4: during the COVID era and this time round that's been
Speaker 4: pretty much a year just south of Tokyo. It's been
Speaker 4: really incredible. I mean, to be honest, it was a
Speaker 4: refreshing change to get out of Wellington, to get out
Speaker 4: of New Zealand and sort of just see what was
Speaker 4: happening in the rest of the world. Sometimes I wonder
Speaker 4: that New Zealand's feels like technologically and sort of politically,
Speaker 4: we're sort of just still stuck in the past a
Speaker 4: little bit.
Speaker 2: Well, it was probably a couple of years ago when
Speaker 2: I first met you at your office at the time
Speaker 2: in Wellington. I went around to talk about bitcoin. You
Speaker 2: showed me Lightning pay and wallet of Satoshi, and you
Speaker 2: had a mining rig mining bitcoin in the corner. I
Speaker 2: think your timing was particularly well because you were talking
Speaker 2: about getting out of New Zealand at the time. Since then,
Speaker 2: obviously things have tanked, particularly in Wellington but the economy
Speaker 2: in general. So you've gone out to the world and
Speaker 2: you know you're doing great things with for instance, the
Speaker 2: transformation of value. This pod cast you do which is
Speaker 2: very much about bitcoin and other things as a sort
Speaker 2: of a bitcoin educator, and I guess really, you know,
Speaker 2: it's not just about bitcoin as a tool of investment,
Speaker 2: which is sort of what I use it for at
Speaker 2: the moment. One of the best investments I've ever made,
Speaker 2: not through any skill of my own, was just getting
Speaker 2: in there a few years ago and holding on like hell,
Speaker 2: not selling it. And now I've done quite well out
Speaker 2: of it. But as you know and have been talking
Speaker 2: about a lot, it is about more than investment. You
Speaker 2: see it as a tool for financial sovereignty to allow
Speaker 2: individuals sort of to have ultimate control over their wealth
Speaker 2: without third party interference from banks financial institutions that frankly
Speaker 2: rip us off in this country. What really got you
Speaker 2: into bitcoin to begin with? Fifteen years old? Now, when
Speaker 2: did you get into it? And what was the real
Speaker 2: motivating factor?
Speaker 4: Yeah? Sure, So I was actually always adjacent to it
Speaker 4: in the sea, so that I was very interested in
Speaker 4: ideas around Austrian economics and markets and things like this.
Speaker 4: And I was living in Japan at the time, and
Speaker 4: I guess I was circling around the bitcoin thing, but
Speaker 4: I had my reservations for a long time, and so
Speaker 4: I didn't fully click for me. Then. It was only
Speaker 4: when I came back to New Zealand and we had
Speaker 4: the COVID lockdowns, we had what I saw as government
Speaker 4: overreach and basically money printing that led to all of
Speaker 4: this inflation and cost of living crisis that we're experiencing today.
Speaker 4: That really was where my interest really formed, I think,
Speaker 4: and I started learning about it and studying it. I
Speaker 4: started to learn about the history of money, the New
Speaker 4: Zealand dollar and sort of what gives it value and
Speaker 4: sort of the mechanism of the financial system, and I
Speaker 4: saw quite clearly that there was something wrong with that
Speaker 4: legacy system. And so that was the beginning of my journey,
Speaker 4: and since then I've gotten to become deeply involved in
Speaker 4: the bitcoin scene in New Zealand and also globally through
Speaker 4: my podcast The Transformation of Value. But really, as I say,
Speaker 4: I see it as a tool of financial sovereignty, and
Speaker 4: you mentioned investing in bitcoin. For me, I think of
Speaker 4: it more like saving. I mean, it is a currency,
Speaker 4: and it is certainly the best way to hold your
Speaker 4: value and to save compared to feat money, which always,
Speaker 4: like a melting ice cube, loses its value if you
Speaker 4: keep it in the bank, especially with such high inflation rates.
Speaker 4: So there's kind of a little bit there in terms
Speaker 4: of the sovereignty and the freedom side, but also just
Speaker 4: it's so simple. You just buy bitcoin, you hold bitcoin,
Speaker 4: you earn bitcoin. You don't have to think about investing
Speaker 4: in anything or messing around with stocks or any of
Speaker 4: the stuff that we spend our time worrying about. You
Speaker 4: just hoddle and you preserve your value, which I think
Speaker 4: is quite profound.
Speaker 2: Yeah, And as you showed me when you were demoing
Speaker 2: wallet of Sutocia, it's actually an incredibly simple method of
Speaker 2: payment and transfer, literally through one person having an app
Speaker 2: on the the other person having it as well sending
Speaker 2: fractions off of bitcoin if you're a merchant, for instance,
Speaker 2: you know, a fraction of the fees off doing a
Speaker 2: deal with payments New Zealand and MasterCard and all of that.
Speaker 2: So there's huge value in there, and we're going to
Speaker 2: talk about where it's going in terms of payments. But
Speaker 2: just to drill down a little bit more, you've called
Speaker 2: bitcoin the world's hardest money, the scarcity and the resistance
Speaker 2: to inflation. I guess that what we saw the experiment
Speaker 2: we ran in New Zealand over COVID and the money
Speaker 2: printing that went on here, and to be honest, around
Speaker 2: the world, but particularly you know here in the impact
Speaker 2: that had on the economy, I guess that's I guess
Speaker 2: that has convinced you more than ever of the you know,
Speaker 2: the inherent structural problems we have in the global financial system,
Speaker 2: which bitcoin really offers an alternative to.
Speaker 4: Yeah, So I think if we look at the history
Speaker 4: of bitcoin as well, I mean, the white paper came
Speaker 4: out in two thousand and eight and the network came
Speaker 4: online two thousand and nine, and really this was really
Speaker 4: close to the global financial crisis and this period of
Speaker 4: what was seen as some real shenanigans by the US
Speaker 4: banking system in particular, and so it was really a
Speaker 4: response to that period in time. And my whole life
Speaker 4: has been affected by that. You know, I was coming
Speaker 4: out of school and I was trying to enter the
Speaker 4: workforce around that time, and New Zealand wasn't hit as
Speaker 4: hard as the US, but certainly it had this chilling effect,
Speaker 4: and you know, it wasn't you know, like felt I
Speaker 4: didn't feel like there was a whole lot of opportunity
Speaker 4: at that time because of that. And so we've got
Speaker 4: a whole generation that's gone through that, and then subsequently,
Speaker 4: with the increase in house prices as well, there's just
Speaker 4: been the whole generation priced out. And I want to
Speaker 4: draw the connection there because the ability to print money
Speaker 4: by the state is directly correlated to the increase in
Speaker 4: asset prices, because where are you going to put your money.
Speaker 4: You can't put it in the bank because it's going
Speaker 4: to lose value to inflation, and so you put it
Speaker 4: into the most scarce thing you can find, which in
Speaker 4: New Zealand happens to be housing. In other places there's
Speaker 4: more of a stock market, or there's other things they
Speaker 4: invest in, but basically assets are where the money flows
Speaker 4: and it sort of pulls into these assets. And so
Speaker 4: I think there's a direct relationship between the money printing
Speaker 4: of the New Zealand government and the Reserve Bank and
Speaker 4: the increase in house prices that are making it unaffordable
Speaker 4: for anyone to live here, especially young people. And so
Speaker 4: that was also kind of an inflection point for me,
Speaker 4: is understanding that relationship and how that has been weaponized politically,
Speaker 4: because you can't go and say, all right, we're going
Speaker 4: to stop this merry go round because then you'll, you know,
Speaker 4: politically that's not good because you'll lose votes from homeowners.
Speaker 4: And so the state is in this really difficult position
Speaker 4: where it's kind of it shouldn't have this responsibility for
Speaker 4: money in the first place. And I think bitcoin, because
Speaker 4: it is third party and neutral, you know, it's not
Speaker 4: aligned with any state, it can act as a bit
Speaker 4: of a check and a balance for what would be
Speaker 4: otherwise the exuberant privilege of money printing we have with
Speaker 4: the government.
Speaker 2: Yeah, and I think that's what you know, a lot
Speaker 2: of people you know who are business people are probably skeptical.
Speaker 2: Off is just that you know, who do you go to.
Speaker 2: Everyone's used to dealing with a bank. Bitcoin is a
Speaker 2: system that exists, but it doesn't have any central sort
Speaker 2: of control as such. It's quite a secure system, but
Speaker 2: hard to get your head around. But I think that's
Speaker 2: really starting to change in the last year or so
Speaker 2: with the debut of exchange traded funds, so giving people
Speaker 2: who would never have downloaded a digital wallet and started
Speaker 2: trading in crypto, giving them the opportunity to hold bitcoin.
Speaker 2: For instance, we're seeing it as offered as part of
Speaker 2: Kiwi Saver investments in New Zealand, so you can have
Speaker 2: a small amount of your portfolio in bitcoin now. And
Speaker 2: I think a lot of young Kiwis who are frustrated
Speaker 2: trying to get on that property ladder, not able to
Speaker 2: afford to save a deposit for a house, A lot
Speaker 2: of them. According to Easycrypto and others who've done studies
Speaker 2: in this country, a lot of people are very interested
Speaker 2: in investing in crypto, So I think the momentum is building.
Speaker 2: What's your take really in what we've seen in the
Speaker 2: last year, the ETFs that have emerged the growing appetite,
Speaker 2: you know, particularly from the Trump administration. He's a crypto
Speaker 2: enthusiast himself. He has his own meme coins, but he's
Speaker 2: got a lot of people around him who've been advising
Speaker 2: him about things, for instance, like a sovereign wealth fund
Speaker 2: that may have a bitcoin element to it.
Speaker 5: Is this really?
Speaker 2: Do you think that the closest we have come to
Speaker 2: Bitcoin's true moments so far?
Speaker 4: Yes, it's interesting. So the ETF so the exchange traded
Speaker 4: funds are an interesting situation where you've got a legacy
Speaker 4: financial instrument that has bitcoin price exposure. So it's important
Speaker 4: to differentiate. You're not owning bitcoin when you own a
Speaker 4: bitcoin etf' you're just getting approximate price exposure. But the
Speaker 4: way I see it, the stock market in the US
Speaker 4: is dominated. Oh well, the stock market in the US
Speaker 4: dominates the common and in New Zealand it's housing. But
Speaker 4: in the US it is the stock market, and that
Speaker 4: has this sort of interesting situation where bitcoin is in
Speaker 4: a sense colonizing that space now through these ETFs, because
Speaker 4: it is a much harder asset than the shares of
Speaker 4: a company, which can be diluted or you know, there's
Speaker 4: a lot of shenanigans that can take place there, and
Speaker 4: so in a sense, that's where the legacy system is
Speaker 4: starting to adopt bitcoin. And then, as you say, you've
Speaker 4: got a lot of guardrails and systems in place that
Speaker 4: can protect investors who have exposure to that ETF. And
Speaker 4: so in a way, it's a bit of a trojan horse.
Speaker 4: And now we're seeing that in New Zealand there's the
Speaker 4: quarter have their bitcoin fund that people can get exposure to,
Speaker 4: and in a way, I think of it a bit
Speaker 4: like scaffolding, where the reason we have such a thriving
Speaker 4: stock market in the first place is because people don't
Speaker 4: know what to do with their money. In my opinion,
Speaker 4: investing in stocks should be a very diligent, specific thing
Speaker 4: where you research a company, you read the annual reports,
Speaker 4: you really standard But at the moment, most people are
Speaker 4: investing through index funds because that's the only way to
Speaker 4: keep your wealth and to track the expansion of the
Speaker 4: monetary supply. And so I think we're going to see
Speaker 4: that maybe change over the long term, as bitcoin is
Speaker 4: just the thing in the ETF that it's just winning
Speaker 4: and a quarter is key server fund. The bitcoin fund
Speaker 4: has just come out in morning Side that there is
Speaker 4: that's the most highest performing fund over the last twelve
Speaker 4: months in u Zelic one percent.
Speaker 5: I think, who's something like that.
Speaker 4: Yeah, so very very good performance there. But in a
Speaker 4: sense it's kind of well, you don't actually need the
Speaker 4: ETF if you've got bitcoin exposure directly through your own wallet.
Speaker 4: But I think for the medium term being able to
Speaker 4: access it is really good. Now. I think over time
Speaker 4: people say, well, I just want the bitcoin, and so
Speaker 4: it's kind of the scaffolding that eventually will sort of
Speaker 4: fall away, take the training wheels off and just get
Speaker 4: the bitcoin exposure yourself. But in the in the midterm,
Speaker 4: I think people will use these vehicles to access bitcoin.
Speaker 4: And as to your your comments about Trump, look, personally
Speaker 4: I despise all politicians and Trump in particular, but the
Speaker 4: incentives have shown their hand. You know, there is some
Speaker 4: incentives at play, and there's things going on behind closed
Speaker 4: doors we don't know about, but it's revealing itself. The
Speaker 4: state and these politicians are starting to talk about crypto generally,
Speaker 4: but bitcoin in particular. As you me, no, I don't
Speaker 4: think any other cryptos have value. I think bitcoin is
Speaker 4: the only thing that really matters in this conversation. Certainly
Speaker 4: the scale of bitcoins orders of magnitude larger than any
Speaker 4: other crypto, and so I think he's just going with
Speaker 4: the trend. You know, Bitcoin's winning, and he wants to
Speaker 4: be on the winning team.
Speaker 2: Yeah, let's drill into that. You're a bitcoin maximalist. You
Speaker 2: describe yourself as we've had this conversation when I first
Speaker 2: met you, that you know, talk about ethereum, which is popular,
Speaker 2: you know, the notion of smart contracts, Solana and Caydano.
Speaker 2: You're doing very innovative things on this blockchainvarious blockchains. Then
Speaker 2: we have that, you know, the trump coin, we have Doge,
Speaker 2: We have literally thousands of coins. You don't see any
Speaker 2: value in any of those.
Speaker 4: There's no value whatsoever. I think all of them come
Speaker 4: second to Bitcoin. And really the analogy we can think
Speaker 4: of is Bitcoin is a monetary protocol, and just like
Speaker 4: the Internet, there is no Internet too. If people are
Speaker 4: old enough, they might remember VHS and Beta max. No
Speaker 4: one uses Beta max. You know, VHS won that battle.
Speaker 4: You know, there's only one Internet, that's the one we use.
Speaker 4: And I think when it comes to digital money, there
Speaker 4: is only Bitcoin. Everything that came after has a rafter problems,
Speaker 4: whether it's a pre mind of the coins and distributed
Speaker 4: to the friends of the foundation, or whether it was
Speaker 4: the nature of the consensus mechanism itself that's flawed. There's
Speaker 4: a lot of issues there, and I think smart contracting
Speaker 4: is interesting. If I was to paint it favorably, I
Speaker 4: would say some of that stuff could eventually come into
Speaker 4: Bitcoin at a higher layer. But to see it as
Speaker 4: it's own chain and its own monetary system, I think
Speaker 4: as a flawed outlook. And there's a lot of grifting
Speaker 4: in that space, and we saw that with Trump's coin.
Speaker 4: There's meme coins. The cat's kind of out of the bag.
Speaker 4: You know, it's not even talking about old coins anymore.
Speaker 4: It's just we'd call them meme coins, and they're literally,
Speaker 4: you know, pump and dump. There's no there's no value there,
Speaker 4: there's no real long term situation. And if we compare
Speaker 4: that with Bitcoin, which is fifteen sixteen years now monetized
Speaker 4: from zero to over two trillion dollars in market cap,
Speaker 4: used globally, adopted by millions of people globally, I think
Speaker 4: it's a very different story.
Speaker 2: Yeah, and I guess the likes of Ethereum sort of
Speaker 2: emerged for that fact that you know, they were designing
Speaker 2: quite flexible means of doing things on top of that.
Speaker 2: And we've heard it's never really eventuated yet, but things
Speaker 2: in the financial industry, if you're getting a mortgage, you
Speaker 2: would do all of that as a smart contract on
Speaker 2: the Ethereum block So it's all incredibly efficient and transparent.
Speaker 2: This stuff still hasn't really got to the consumer level yet,
Speaker 2: but you don't necessarily you're not necessarily precluded from doing
Speaker 2: that using the Bitcoin platform and blockchain. Is this concept
Speaker 2: of layer two. Maybe explain that for us Cody, you've
Speaker 2: got the base Bitcoin blockchain and there's all this innovation
Speaker 2: that's going on on level two to enable similar sorts
Speaker 2: of transactions.
Speaker 4: Yeah, so I think the way we can think about
Speaker 4: this is think of it as the Internet of money.
Speaker 4: And when the Internet came out, originally it was really
Speaker 4: just these kind of underwater cables that connected countries and
Speaker 4: these connections between universities and institutions, and it was this
Speaker 4: very natient network. And from that you were then able
Speaker 4: to plug telephones and then start dialing into other computers,
Speaker 4: and there was these more and more layers built, and
Speaker 4: so where we are today, where we have you and
Speaker 4: I are having this care and this is effectively a
Speaker 4: telephone call over the Internet, whereas once upon the time
Speaker 4: the Internet ran over the telephone lines. And so there's
Speaker 4: this flipping of the tech and I think the way
Speaker 4: we can think about that with bitcoin is it is
Speaker 4: this robust, extremely hard money at the base layer, and
Speaker 4: you could even just say it's a Ledger system at
Speaker 4: the base layer, and then upon that you can build
Speaker 4: layers that fulfill other needs. And so one of the
Speaker 4: common critiques of bitcoin is that it's slow, and I
Speaker 4: don't think this is really relevant, but the reality is
Speaker 4: it is ten minute blocks, and so that's maybe not
Speaker 4: quite fast enough for people who want to do instant payments.
Speaker 4: But what you can do is you can build payment layers,
Speaker 4: such as the Bitcoin Lightning network, that are on top
Speaker 4: of that, and that fills in that need for speed.
Speaker 4: And so it's kind of like, you know, we're building
Speaker 4: the Internet. We've got these cables under the ocean and
Speaker 4: these like servers, but then we're building HTTP, we're building websites,
Speaker 4: we're building apps on top of all of that. And
Speaker 4: so Lightning is one example and it's important to differentiate.
Speaker 4: It's not a separate thing. It is bitcoin. It's atomically
Speaker 4: related to the bitcoin blocks, and it just happens to
Speaker 4: be this other way of using bitcoin that's a lot faster,
Speaker 4: and then there's other other things you can do on
Speaker 4: top of that. And because it's an open source network,
Speaker 4: if someone has a great idea, they can go and
Speaker 4: build it. And so again, when the Internet came out,
Speaker 4: the earliest TCPIP protocol, that was a standard that people
Speaker 4: could then innovate upon, and they could build HTTP, they
Speaker 4: could build websites, they could build FTP, all of these
Speaker 4: protocols on top of that. And I think we're going
Speaker 4: to see the same thing, and we are seeing the
Speaker 4: same thing with Bitcoin, that there will be innovation that
Speaker 4: emerges to use the blockchain in other ways. And to
Speaker 4: just look this back to the comments about ethereum, I
Speaker 4: mean that came out, I guess in response to what
Speaker 4: was seen as limitations in Bitcoin's base layer. But fundamentally,
Speaker 4: and I think history has proven this, the approach to
Speaker 4: doing everything on the base layer, you know, the kitchen
Speaker 4: sink approach hasn't worked out. I mean, ethereum is not decentralized.
Speaker 4: You have to have a cloud server to run the thing.
Speaker 4: You can't run it at home. It's very clunky, it's
Speaker 4: very big. The size of the blockchain on etherem, it's huge,
Speaker 4: and it's really hard to validate and that sort of
Speaker 4: so it kills that decentralization aspect, which is actually the
Speaker 4: reason we do this in the first place, because blockchains
Speaker 4: are very inefficient ways of doing things. The only thing
Speaker 4: that's worth doing it for is money, and so if
Speaker 4: you're going to do it, it has to be decentralized.
Speaker 4: Otherwise you might as well just have a database. So yeah,
Speaker 4: that's kind of how I contrast those two.
Speaker 2: Yeah, and you know, there will be a lot of
Speaker 2: people who have invested or bought bitcoin in the last
Speaker 2: couple of years. You know, the prices we record this
Speaker 2: is down a little bit, but it's still at ninety
Speaker 2: seven thousand dollars per us per coin, so you know,
Speaker 2: that is massive, almost on a record high for the currency.
Speaker 2: So there will be people who have bought it and
Speaker 2: they want to use it, and traditionally that's been a
Speaker 2: little bit clunky, but we do have the likes of
Speaker 2: lightning pay, which is you know, new Zealand organization that
Speaker 2: is enabling payments. There are lots of others as well,
Speaker 2: and we do now have direct bitcoin to feit currency,
Speaker 2: So if you go to a merchant, if the merchant
Speaker 2: accepts this, you can use your bitcoin pay the merchant
Speaker 2: in New Zealand dollars. That's all seamlessly done behind the scene.
Speaker 2: So I guess the momentum is building. You talk about
Speaker 2: the hyper bitcoinization around the world. I guess that is
Speaker 2: what is going to drive that when it becomes seamless
Speaker 2: to pay with this digital token that you've got in
Speaker 2: your digital wallet.
Speaker 5: How far away are we from that? Do you think?
Speaker 4: Okay, So I think we need to maybe flip the
Speaker 4: way we're looking at this. So because the way you're
Speaker 4: describing it for me would be if we were if
Speaker 4: bitcoin was a technology company, this would be the kind
Speaker 4: of roadmap would be talking about, you know, but it is,
Speaker 4: at the end of the day, an open source project
Speaker 4: is very organic. There's a lot of competing forces within
Speaker 4: but coin that are trying to keep it strength, you know,
Speaker 4: keep its strength as a network. So there's a lot
Speaker 4: of a very different approach to say tech company saying
Speaker 4: we're going to roll out and do this thing. That said,
Speaker 4: certainly the payment side, there's a lot of stuff happening there.
Speaker 4: Lightning Pay you mentioned friends of mine, they have an
Speaker 4: incredible system where already today I live on a bitcoin
Speaker 4: standard myself. I use their system to pay New Zealand
Speaker 4: bills and so through their Lightning Pay interface, if I
Speaker 4: have a bill with someone in New Zealand, I just
Speaker 4: pay and it puts the money right into the bank account,
Speaker 4: and so it's a bit of a gateway to the
Speaker 4: legacy system. And then on the other hand, if you
Speaker 4: want to receive bitcoin, you can pay New Zealand dollars
Speaker 4: and get bitcoin through their system, and if you're a merchant,
Speaker 4: you can use that same system to receive New Zealand dollars.
Speaker 4: If someone pays bitcoin, you can receive New Zealand dollars
Speaker 4: and you're not exposed to any kind of volatility. So
Speaker 4: there's some really interesting stuff there, and in a way,
Speaker 4: the legacy system is actually enabling that through open banking
Speaker 4: and some of these APIs now which are kind of
Speaker 4: letting letting the bitcoin system come in and again colonize
Speaker 4: this existing financial system because it has to open up
Speaker 4: and it means bitcoin companies can get in there, and
Speaker 4: thankfully we've got a regulatory landscape that enables that as well,
Speaker 4: and so it's really exciting times where I think we're
Speaker 4: going to see maybe not necessarily just a unilateral domination,
Speaker 4: but I think this kind of slow, morephing of the system.
Speaker 4: And again, people who cannot save money in the bank
Speaker 4: account because there's interest won't outcompete inflation. All they have
Speaker 4: to do is hold bitcoin and they'll beat inflation over
Speaker 4: the long term, and so there's kind of an interesting dynamic.
Speaker 4: So I guess to answer the question what does the
Speaker 4: future look like, I mean, I don't have a crystal ball.
Speaker 4: I think the history of money tends to say that
Speaker 4: store of value is what happens first, and so people
Speaker 4: want to hold their value before they start trying to
Speaker 4: spend it. And so I think maybe we're going to
Speaker 4: see an extended period of store of value basically a
Speaker 4: hot ale bitcoin, and then eventually you're going to maybe
Speaker 4: see more people who say, well, I want to get
Speaker 4: paid in bitcoin. I don't know exactly how that plays out.
Speaker 4: I think it's going to play out in a very
Speaker 4: kind of dispersed way, where you've got maybe pockets of
Speaker 4: people who do that more than others, and who knows
Speaker 4: when New Zealand will be I think we are a
Speaker 4: little bit behind the game in terms of bitcoin infrastructure,
Speaker 4: and part of that is regulatory barriers. But over time,
Speaker 4: I think we will see more and more people want bitcoin.
Speaker 4: And who knows, there could be some geopolitical black swan events,
Speaker 4: capital controls or whatever which really pushes people towards bitcoin.
Speaker 4: But for the moment, I would say it's still in
Speaker 4: the store of value stage. I use it for payments
Speaker 4: all the time, but some people maybe aren't quite at
Speaker 4: that stage yet, and I guess it's just sort of
Speaker 4: a slow, gradual process.
Speaker 2: Yeah, and it has been frustrating really just the slow
Speaker 2: pace of change around regulation and that in New Zealand,
Speaker 2: although in the last year we have seen, for instance,
Speaker 2: the Financial Markets Authority has said they are going to
Speaker 2: set up a regulatory sandbox to allow fintech companies to
Speaker 2: experiment with technologies like blockchain and AI. That is starting
Speaker 2: this year, so they'll be able to literally launch services
Speaker 2: and work with the FMA to basically experiment in a
Speaker 2: safe way to make sure they're not breaking the law,
Speaker 2: but to push the boat out a little bit on things. Singapore,
Speaker 2: other countries have this. There's some work early stages work
Speaker 2: the Reserve Bank is doing around a central bank digital currency,
Speaker 2: which I'm picking you are not a fan of.
Speaker 4: Yeah, so you mentioned the FMA. I think the sandbox approach.
Speaker 4: Really the issue with that is that as a permissioned system,
Speaker 4: you've got to be credentialed to get in and play
Speaker 4: with things. And the whole Bitcoin network is open source.
Speaker 4: You know, you can anyone can build apps and work
Speaker 4: with it, and so it's kind of two incompatible things
Speaker 4: in that sense. And again there are businesses, awesome projects
Speaker 4: like Lightning pay who are bridging that gap and going
Speaker 4: through the work to be a regulated entity that can
Speaker 4: do that stuff. But ultimately, I don't think innovation happens
Speaker 4: in those kinds of places. I think you can't really
Speaker 4: innovate in a sand pit that's operated by the state.
Speaker 4: I think you have to go out on a limbit
Speaker 4: and build open source stuff. And so I think a
Speaker 4: lot of that space is populated by again these kind
Speaker 4: of old coin projects, which are ultimately worthless systems, and
Speaker 4: they are quite moneyed in a lot of a lot
Speaker 4: of situations because the companies and so they can have
Speaker 4: their token, they can do a pre mind, they can
Speaker 4: sell their token, and they can get all of this
Speaker 4: money they can use for marketing their system, whereas again
Speaker 4: bitcoin it's open source, there's no boss, there's no company
Speaker 4: behind bitcoin, and so it's a lot more grassroots and
Speaker 4: so I think that's one angle. And then the other
Speaker 4: angle you mentioned are the Reserve Bank and the CBDC,
Speaker 4: and I'm certainly at odds with what they're trying to
Speaker 4: do there. I think on a political level, they are
Speaker 4: trying to I think, long term ensure the stability of
Speaker 4: the New Zealand dollar, which is actually I think under
Speaker 4: threat from things like stable coins the US dollar dominance.
Speaker 4: So I think there's a lot of geopolitical considerations, and
Speaker 4: so bitcoin is just another thing nipping at their heels.
Speaker 4: I don't know actually what the long term outlook is
Speaker 4: for the New Zealand dollar, if I'm honest. I think
Speaker 4: the yen as well, where I am in Japan, is
Speaker 4: certainly not doing too well. I think they've got a
Speaker 4: lot of political considerations and bitcoin is just another one
Speaker 4: of those. And so the CBDC I see as a
Speaker 4: kind of a stop gap where they can innovate just
Speaker 4: a little bit more and to ensure the New Zealand
Speaker 4: dollar doesn't die straight away. But if you look over
Speaker 4: the long term, the history of war feat money is
Speaker 4: as they all go to zero. I mean, the New
Speaker 4: Zealand dollar arguably is only since nineteen sixty eight, I
Speaker 4: think when we moved over from the pound, and you know,
Speaker 4: all of these currencies after a few decades they all
Speaker 4: eventually die. So I think we are going to see
Speaker 4: that in slow motion as people lose trust in the state,
Speaker 4: in the government money and who knows, whether it's stable coins,
Speaker 4: bitcoin or you know, hard metals. Maybe there's things people
Speaker 4: move into and they move away from New Zealand's currency, and.
Speaker 2: We're sort of seeing that to some extent. For instance, gold,
Speaker 2: you know, China has been hoarding gold, other countries, the
Speaker 2: bricks nations have been buying up gold deposits. So that's
Speaker 2: one indication of the lack of confidence, for instance, in
Speaker 2: their own currencies. Also the US dollar we've seen l Salvador,
Speaker 2: although they pull back from that in the last couple
Speaker 2: of weeks. Bitcoin as a you know, as a nation
Speaker 2: state sort of currency, a recognized currency there, they are
Speaker 2: still investing in bitcoin. But there have been a few
Speaker 2: experiments like that having there in smaller countries that have
Speaker 2: very little confidence in their currencies, high inflation, high corruption,
Speaker 2: they see that as potentially a way to improve live,
Speaker 2: improve life for their citizens.
Speaker 3: Yeah.
Speaker 4: So, I mean it's classic adage that in times of
Speaker 4: strife you go into gold. I don't know. I mean,
Speaker 4: gold is a bit of fun, but I don't think
Speaker 4: how relevant. I don't think it's that relevant in the
Speaker 4: modern world. It's it's hard to move around. You know,
Speaker 4: you can you can store it, but how are you
Speaker 4: going to liquidate it? I mean, bitcoin innovates on that
Speaker 4: in so many ways, and you can send it anywhere,
Speaker 4: you can take it with the overseas, you know, can't
Speaker 4: you can't take gold on an airplane really without getting detected.
Speaker 4: So there's a whole lot of considerations there. But I
Speaker 4: think when it comes to experiments with us, the world
Speaker 4: is kind of crazy, man, Like, well, you know what's
Speaker 4: going on in times of strife, people are going to
Speaker 4: look for hard assets to park their value, and I
Speaker 4: think bitcoin's doing a really good job of that. You've
Speaker 4: seen starting to see countries experiment You mentioned our Salvador,
Speaker 4: they played around with this legal tender law, which I
Speaker 4: think they've just repealed. I don't quite know the full
Speaker 4: implications that there might have been some political pressure from
Speaker 4: the IMF, but regardless, it was an experiment and it
Speaker 4: was really interesting, and so you've seen all these companies
Speaker 4: now start to move to ourself or you can still
Speaker 4: use it there. It's just I think they've just changed
Speaker 4: the law around the legal tender status, but you can
Speaker 4: still use it. Really exciting stuff. There's a few other
Speaker 4: localities in Switzerland. There's Lugano, which is a city that
Speaker 4: has you can use bitcoin amongst all the merchant There's
Speaker 4: a few places in the Philippines other other kind of
Speaker 4: bitcoin communities where there's this circular economy emerging, and I
Speaker 4: think it would be really awesome actually to see something
Speaker 4: like that in New Zealand. I can also highlight Queenstown
Speaker 4: as a bit of a bitcoin hub. That's where part
Speaker 4: of Lightning Pay is based out of Queenstown and there's
Speaker 4: a few merchants there. So we're going to have actually
Speaker 4: having an event there in March that I'm going to
Speaker 4: attend and we're going to pay on bitcoin, and it's
Speaker 4: going to be kind of cool. So I mean, I'd
Speaker 4: love to see a bitcoin circular economy like that in
Speaker 4: New Zealand, but yeah, sort of early's still early days,
Speaker 4: I think for that that kind of thing.
Speaker 2: Yeah, and look, it's not necessarily bitcoin based, but we're
Speaker 2: always see some really good innovation in New Zealand pockets
Speaker 2: offt it. We don't necessarily have a you know, an
Speaker 2: industry that focuses on this, but you have, for instance, immersive,
Speaker 2: really innovative company Jerome Farre's company that is sort of
Speaker 2: interfacing with master card and and bitcoin, so you can
Speaker 2: very easily use your bitcoin to pay it at master
Speaker 2: card terminals and hundreds of thousands, if not millions of
Speaker 2: them around the world. You've got future Verse, which is
Speaker 2: around non fungible tokens and gaming, and like we've talked
Speaker 2: about Lightning Pay and several others. So do you get
Speaker 2: a sense that, you know, we have a thriving software
Speaker 2: as a service industry in New Zealand. We've exported zero
Speaker 2: software and others vend to the world. When you look
Speaker 2: at the sort of the grassroots stuff that's going on
Speaker 2: and web three and blockchain ventures in New Zealand, are
Speaker 2: you sort of heightened by the activity.
Speaker 4: So I think, again, the bitcoins really were my focus is,
Speaker 4: and I'm a little bit disappointed. I think generally the
Speaker 4: quality of these other systems is pretty low. And again
Speaker 4: they're all hype. They're all hype. They don't really have
Speaker 4: any true value, and they're sort of riding the train.
Speaker 4: And I think we have to unpick the hype from
Speaker 4: the reality. And the same could be said for AI stuff.
Speaker 4: I mean, there's certainly a lot of value there, but
Speaker 4: it's sort of you see it float by on LinkedIn
Speaker 4: and you think, okay, we've hit peak. And so with
Speaker 4: the crypto stuff, I think a lot of that is
Speaker 4: vestile from the last bull run and all of that
Speaker 4: was driven by bitcoin, you know, and so then it
Speaker 4: flowed into these old coins, and so I think, really
Speaker 4: people need to be critical. Again, blockchain doesn't matter unless
Speaker 4: it's decentralized and secured like bitcoin. NFTs are again interesting,
Speaker 4: but they don't if they're not on bitcoin. You might
Speaker 4: as just have it in a database, you know. And
Speaker 4: so I think there's a critique there of what's going
Speaker 4: on in New Zealand. Now that said, with the bitcoin stuff,
Speaker 4: there is a few companies doing some awesome stuff but
Speaker 4: it sits a little bit, just a little bit outside
Speaker 4: of the Overton window of sort of what's acceptable, because again,
Speaker 4: bitcoin is is pretty big as an idea, and it
Speaker 4: is disruptive. You know, we're software and SaaS and that
Speaker 4: all of this stuff is about disruption, and the biggest
Speaker 4: disruption we can make is disrupting the monopoly on nation
Speaker 4: state currency. And I think that's really the big piece,
Speaker 4: and that's maybe just a bridge too far for some
Speaker 4: people who want to play in the fintech sandpit that
Speaker 4: the government has made for them. You know. So I
Speaker 4: guess I have a little bit of an aversion to
Speaker 4: maybe some of those projects that certainly don't plan too
Speaker 4: the bitcoin world. That's sort of maybe a little bit
Speaker 4: of a distraction. Though certainly some of that stuff, if
Speaker 4: it could be positively, if it could be brought over
Speaker 4: into bitcoin, or maybe some of those people can work
Speaker 4: on bitcoin stuff, that could be really awesome. But yeah,
Speaker 4: there's sort of the software landscape generally, though in New
Speaker 4: Zealand I think is pretty strong. I'm a big fan
Speaker 4: of some of the agritech stuff that's happening as well
Speaker 4: and New Zealand, I mean that's where we need to
Speaker 4: be going is exporting software instead of milk.
Speaker 2: You know, I guess the two remaining issues that are
Speaker 2: barriers to bitcoin adoption and the hyper bitcoinization of the
Speaker 2: world really is lingering perceptions of trust. And this isn't
Speaker 2: anything integral to bitcoin. This is about the actors who
Speaker 2: work around that network. We've seen exchanges like Dasset Cryptopia
Speaker 2: here in New Zealand collapse owing a lot of money.
Speaker 2: FTX was a big moment for the industry Binance. The
Speaker 2: CEO went to jail, huge finds there, So I guess
Speaker 2: we've got to work through that. And the other thing
Speaker 2: is the volatility. So interested just finally to wrap up
Speaker 2: really what your thought is on those two things. Are
Speaker 2: we going to see and with Trump throwing his own
Speaker 2: mean coins out there and sort of polluting the pond
Speaker 2: to some extent, are you just going to see more
Speaker 2: bad activity that's going to sort of taint this whole area,
Speaker 2: particularly bitcoin, And as it matures and it's more uptake
Speaker 2: and interest in bitcoin, either peaks and troughs are going
Speaker 2: to flatten out a little bit or is it always
Speaker 2: going to be a boom bust sort of deal holding
Speaker 2: and investing in bitcoin?
Speaker 4: Yeah, so I have a lot of sympathy for people
Speaker 4: who have maybe had issues with a bitcoin of lost
Speaker 4: bitcoin through exchange hacks and things like this. You know,
Speaker 4: there's certainly maybe people who are not so tech savvy
Speaker 4: and they don't know that there's other ways of holding bitcoin.
Speaker 4: I certainly have sympathy that for their loss. And unfortunately,
Speaker 4: in some of these situations there is a regulator who
Speaker 4: can come in and make things right. But ultimately, I
Speaker 4: think bitcoin is a profounding new idea in the sense
Speaker 4: that you can self custody your funds. And this is
Speaker 4: not possible currently unless you're holding cash, physical cash in
Speaker 4: your house or physical gold that you can't self custody
Speaker 4: or money all of it lives in bank databases, and
Speaker 4: bitcoin is totally opposite. You can hold this, you can
Speaker 4: hold it in your own wallet, and it's out there
Speaker 4: on the blockchain. Your wallet sort of unlocks those funds.
Speaker 4: No one own says access to it. So that's a
Speaker 4: very new and kind of radical concept of ownership. And
Speaker 4: so it's naturally it's going to be quite quite hard
Speaker 4: for some people to get their heads around that. And
Speaker 4: so if you have your money with a custodian, the
Speaker 4: custodian is now the risk point, and so I think
Speaker 4: I would encourage people to learn about the nature of
Speaker 4: self custody and what's involved. And it really is as
Speaker 4: simple as twelve words that you get from your wallet
Speaker 4: that you can write down and secure your bitcoin with that.
Speaker 4: There is maybe a little bit more nuance about exactly
Speaker 4: how you do that, but it's it's a process that
Speaker 4: people need to go through. And if you can, if
Speaker 4: you can drive a car, you know, if you can
Speaker 4: use a computer, you can, you can use bitcoin in
Speaker 4: a self custod of your way. In terms of these
Speaker 4: bad actors, again, I think we are going to see
Speaker 4: this probably for the for the foreseeable future. There's going
Speaker 4: to be a number of these sorts of exchanges and
Speaker 4: businesses that come out that are actually not holding the
Speaker 4: bitcoin they say they are. They've got paper bitcoin for example,
Speaker 4: that they're selling to people, but it's not actually a
Speaker 4: real bitcoin, and so there's going to be risk and
Speaker 4: we saw that with ftx and other exchanges in the past.
Speaker 4: But again, doing a due diligence, doing a bit of
Speaker 4: research and understand exactly what you need to do to
Speaker 4: get bitcoin into your self custody is really important. And
Speaker 4: then I think also the lens or the I guess
Speaker 4: you could say the mantra of bitcoin not crypto is
Speaker 4: really important here because if you brought into the trump coin,
Speaker 4: for example, you got rugged. You know, you lost all
Speaker 4: your money. If you've brought into any of the other
Speaker 4: thousands of cryptos that have come over the years, you're
Speaker 4: going to lose money. Whereas bitcoin, you hold it, and
Speaker 4: generally speaking, over a three or four year period, it's
Speaker 4: always going to increase in purchasing power. There are ups
Speaker 4: and downs, and there is volatility, and man, that is
Speaker 4: the rollercoaster ride. You know, when you and I last spoke,
Speaker 4: I can' quite remember what the bitcoin price was and
Speaker 4: New Zealand dollars, but it was certainly a lot cheaper
Speaker 4: than it is today. And you know, I had to
Speaker 4: ride through all of that, but I understood the network.
Speaker 4: And so I think education is really the big piece here.
Speaker 4: And so if people, if they can, I would suggest
Speaker 4: reading some books about bitcoin. I can recommend the Bitcoin
Speaker 4: Standard is a really good place to start. There's some
Speaker 4: really awesome meetups happening in New Zealand as well. We
Speaker 4: can talk to real people, genuine people and kind of
Speaker 4: learn about how bitcoin works. So I can sumably call
Speaker 4: out the bit key we meet ups. There's a place
Speaker 4: people can go to learn about bitcoin, and I kind
Speaker 4: of ask the questions that are burning. But really education
Speaker 4: is the key piece. And once you begin that and
Speaker 4: you sort of see how it unfolds, you've begun down
Speaker 4: that rabbit hole. There's no I don't think there's any
Speaker 4: coming back to the old way. So yeah, that's all
Speaker 4: I would say. Education is important.
Speaker 2: Well, it's a great podcast, The Transformation of Value. You
Speaker 2: got some great guests on there, and I highly recommend
Speaker 2: it as someone who has been educating myself on this
Speaker 2: has been really valuable and for answering some of the
Speaker 2: bigger philosophical questions about you know, financial freedom and what
Speaker 2: this is all about, what bitcoin represents. So thanks so much.
Speaker 2: We'll put links to that in that book you mentioned
Speaker 2: in the show notes. And thanks so much for being
Speaker 2: on the Business of Tech, Cody, and look forward to
Speaker 2: catching up with you again and seeing what potentially crazy
Speaker 2: stuff happens in the world in twenty twenty five and
Speaker 2: what it means for bitcoin.
Speaker 4: Yeah, thank you very much, Peter.
Speaker 5: So being and you into.
Speaker 3: Bitcoin, No, no, I did dabble. I wish I had
Speaker 3: kept my money in there, but you know, I think
Speaker 3: it was around the fifty sixty thousand, but I only
Speaker 3: had like one hundred bucks in anyway, just just just
Speaker 3: to try it out. But I do kind of have
Speaker 3: an understanding of what he's saying. It's like cryptocurrencies are
Speaker 3: out of the bag now the box is open, and
Speaker 3: if we want one that is going to be the
Speaker 3: you know, dominant useful crypto, it really kind of makes
Speaker 3: sense for it to be Bitcoin in many ways.
Speaker 2: So there's there's that, there's and that's what I'm really
Speaker 2: interested in. I've bought some in the hope, you know,
Speaker 2: several years ago, I bought this in the hope that,
Speaker 2: you know, I can start using this and educate myself
Speaker 2: on it and start transacting with it. I haven't touched
Speaker 2: it since then. I haven't used it to make a transaction.
Speaker 2: Cody a few years ago took me through that whole process,
Speaker 2: so I know it's possible, but I just don't see
Speaker 2: the compelling proposition to do it. But it's not just
Speaker 2: about convenience or even lower fees. I think for people
Speaker 2: like Cody, it's a fundamental transformation of the financial system
Speaker 2: and what they see as freedom from an oppressive controlling system,
Speaker 2: including the government with the Reserve Bank and the banks
Speaker 2: around it. And it's really quite remarkable when you start
Speaker 2: listening to his podcast. You know, a lot of these
Speaker 2: people really see that the currencies are collapsing, inflation is
Speaker 2: killing spending power. The only way really to counter that
Speaker 2: is backing bitcoin, which, as he says, you know, is volatile,
Speaker 2: but has been increasing in value on a trend line
Speaker 2: over the last fifteen years.
Speaker 3: Yeah. Yeah, I think there is a bit of a
Speaker 3: logical jump from there we're having a crisis of currency
Speaker 3: and economic inflation to straight to bitcoin is the only option.
Speaker 3: I mean, listening to him speak, I thought he made
Speaker 3: some really excellent points, and I really liked a lot
Speaker 3: of what he was saying, But they were few kind
Speaker 3: of alarm bells that rang for me, and I think
Speaker 3: one of them is what you've alluded to just now,
Speaker 3: which is the number of times that he repeated just
Speaker 3: hold it and it will grow, and it's like, actually,
Speaker 3: that's not really how things work. The reason, one of
Speaker 3: the reasons that we're facing this massive economic issue at
Speaker 3: the moment is because of the growth at all costs mindset, Like,
Speaker 3: I don't think having a different currency that grows faster
Speaker 3: is the answer because they can't just do it forever.
Speaker 5: No, it can't.
Speaker 2: But I guess he's looking at the fundamentals off a
Speaker 2: limited supply and a truly limited supply, they'll only ever
Speaker 2: make so many bitcoins.
Speaker 5: It's getting harder and harder to.
Speaker 2: Make that, and that's other issues we've talked about around
Speaker 2: the energy required to do those transactions or those calculations
Speaker 2: to put blocks on the chain. But then there's the
Speaker 2: issue off volatility. So I think Cody basically has all
Speaker 2: you know, transacts everything in booitcoin, which is fine if
Speaker 2: you truly believe in that upward trajectory which is holding
Speaker 2: true over time.
Speaker 5: But it's those big dips.
Speaker 2: So if you're trying to buy a big ticket item
Speaker 2: in your car, is something like that, and unfortunately you
Speaker 2: hit the dip.
Speaker 5: That's the thing. I think most.
Speaker 2: Consumers don't want to bar for it at the moment
Speaker 2: just because of that volatility.
Speaker 3: And it's fine if you have a lot of money.
Speaker 3: You can do that. If you're independently wealthy, or if
Speaker 3: you have a lot of assets and you don't have
Speaker 3: any concerns. But if you're somebody living day to day
Speaker 3: who just wants to be able to get by, buy groceries,
Speaker 3: buy a car or a house eventually, and knowing how
Speaker 3: much your income is is really important. The reality is
Speaker 3: is that currency based on something that is fluctuating constantly,
Speaker 3: it will just cause so many issues for so many people,
Speaker 3: those people who are just scraping by, those people who
Speaker 3: are even just like lower middle class, that's just not
Speaker 3: going to just won't work, just w and then is
Speaker 3: the other issue of self custody of your bitcoin, which
Speaker 3: is the only way really to keep it safe. And
Speaker 3: I just think there's you know, it's improved the ability
Speaker 3: to do that, but it's still just something that the
Speaker 3: average consumer won't touch with a barge pole. So there's
Speaker 3: still a number of fundamental barriers to get over with bitcoin.
Speaker 3: But what I fundamentally love is just the efficiency of
Speaker 3: making transactions, so payments to the obvious place where this
Speaker 3: can save us money, do things quickly with those Layer
Speaker 3: two applications on bitcoin, even with Ethereum and others as well,
Speaker 3: smart contract tracts. Those are the things that really my
Speaker 3: eyes light up really about these technologies. A more efficient
Speaker 3: way to do things with money in the digital world,
Speaker 3: and I'd like to see innovation, and there is some
Speaker 3: great innovation happening even here in New Zealand. A handful
Speaker 3: of companies are doing really cool things. They're still quite niche,
Speaker 3: but definitely, I think what Trump is doing and changes
Speaker 3: at the SEC and the financial sector's embrace off exchange
Speaker 3: traded funds, it's just going to make all of that
Speaker 3: innovation more likely to happen. Ultimately, I think his messages
Speaker 3: are good, one which is, go out and educate yourself.
Speaker 3: If you feel uncomfortable about the extent to which your
Speaker 3: reliance on big finance essentially and you're seeing what that
Speaker 3: does to your life, there may be an alternative. Go
Speaker 3: and educate yourself on it. Don't take my word for it.
Speaker 3: Go and have a look at the stuff. Play around
Speaker 3: with bitcoin, see what you can do with it, transfer
Speaker 3: it to other people. You can now pay for things
Speaker 3: with bitcoin if you want to do that. Just don't
Speaker 3: trust anyone.
Speaker 2: Just just don't trust anyone, and definitely don't trust the
Speaker 2: Trump mean coin or encodes you any the other cryptocurrencies.
Speaker 2: And I think he's probably got a point there.
Speaker 3: I'm currently considering a campaign to change the term to scamcoin.
Speaker 3: I think we should. I think that's what we should do.
Speaker 3: I think calling it memecoin is far too kind.
Speaker 5: Yeah, fair enough.
Speaker 2: Thanks to Cody Ellingham for coming on check out his
Speaker 2: own podcast, with weekly episodes on bitcoin and freedom tech.
Speaker 2: You can find it at the Transformation of Value dot com.
Speaker 3: Show notes and this week's reading list are in the
Speaker 3: podcast section at Business Desk dot co dot NZAD.
Speaker 2: Where you can stream the podcast on iHeartRadio. It's also
Speaker 2: available on your podcast platform of choice.
Speaker 3: Get in touch with your feedback and topic suggestions were
Speaker 3: on LinkedIn and blue Sky.
Speaker 2: Next week, we look at China's designs on the Pacific
Speaker 2: and tap a local expert on his views about whether
Speaker 2: we should get involved in the Orcust defense tech arrangement
Speaker 2: with Australia, the UK, and the US.
Speaker 3: Tune in next Thursday for that.
Speaker 5: In the meantime, have a great week.